Bloomberg News

Sierra Leone’s Economy May Grow 50% in 2012 as Deficit Slows

November 25, 2011

(Updates with budget deficit in fourth paragraph.)

Nov. 25 (Bloomberg) -- Sierra Leone may reduce its budget deficit next year as the start of iron-ore production propels its economic growth rate to one of the fastest in the world, said Finance Minister Samura Kamara.

Growth is seen at 50 percent next year and 10 percent in 2013 and 2014, he told lawmakers in Freetown, the capital, today. Excluding iron ore, the expansion may be 6 percent each year, Kamara said.

The West African nation has been luring foreign investment to rebuild its economy that was left devastated by 11 years of civil war that ended in 2002. African Minerals Ltd. started shipments from its Tonkolili iron-ore mine Nov. 4 and London Mining Plc, is set to start exports next month.

The budget deficit excluding grants will narrow to 10.4 percent of gross domestic product in 2012 from 11.8 percent this year. Including grants, the 2011 gap is forecast for 3.9 percent, Kamara said, without giving a figure for 2012.

Revenue from mining licenses and royalties will increase by 30 percent to 242.3 billion leones ($55 million) in 2012 as the higher exports help narrow the country’s current-account deficit to 11.2 percent in 2012 and 10.8 percent in 2013, he said.

Inflation next year is may slow to 11 percent and be in “single digits” in 2013 and 2014, Kamara said. Last month, Sierra Leone’s central bank cut 300 basis points off its key lending rate, lowering it to 20 percent after inflation slowed to 15.7 percent in September.

The country will spend 395 billion leones on road construction, 206.3 billion leones on energy and water and 6.3 billion for the rehabilitation of the main airport at Lungi, outside Freetown, Kamara said, with part of the money coming from donors.

--Editors: Emily Bowers, Karl Maier

To contact the reporter on this story: Silas Gbandia in Freetown via Accra at ebowers1@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus