IMF Staff Completes 2019 Article IV and Second ECF Review Mission to Sierra Leone
November 14, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
- The Sierra Leone authorities and IMF mission concluded discussions, reaching staff-level agreement on economic policies to pave the way for the IMF Executive Board to consider the second review under the ECF‑supported program.
- While the economy is continuing to recover, the outlook remains challenging and improving the well-being of Sierra Leoneans is an ambitious endeavor.
- The 2020 budget strikes a balance between meeting the country’s large development needs and navigating the tight financing situation.
An International Monetary Fund (IMF) mission, led by Karen Ongley, visited
Freetown during October 30-November 13, 2019 to conduct the 2019 Article IV
consultation and the second review of the IMF arrangement under the
Extended Credit Facility (ECF), approved by the Executive Board on November
At the end of the visit, Ms. Ongley issued the following statement:
“The economy is continuing to recover, with economic growth set to pick up
in 2019 to 5.1 percent, up from 3.5 percent in 2018, buoyed by improved
activity in agriculture, mining, and construction. While external accounts
have improved, the current account deficit is expected to narrow to 14.1
percent of GDP from 18.7 percent, and exchange rate pressures remain, in
particular during the lean season in the third quarter of the year.
Overcoming the legacy of prolonged economic instability and numerous
shocks, and improving the wellbeing of Sierra Leoneans remains challenging.
“In this regard, the Government’s National Development Plan (NDP)
promises to put the country on a sustainable development path. It aspires
to develop human and physical capital, while strengthening governance and
accountability to build an economy that is macro-economically sound,
inclusive and resilient to shocks. However, the authorities are pursuing
this plan against a tight financing situation. Pursuing these important
goals—boosting education, health, agriculture, and infrastructure—will
require carefully calibrated policies.
“Progress under the ECF-supported program has helped stabilize the
macroeconomy—vital as a launchpad for the NDP’s goals. The Government met
all of the end-June 2019 quantitative performance criteria and indicative
targets—net credit to the government and net domestic assets of BSL by
large margins. They also met the indicative targets on domestic government
revenue, poverty-related spending, and the domestic primary balance. The
authorities made headway on structural reforms, such as by submitting draft
amendments to the National Revenue Authority Act for IMF staff review,
finalizing the stocktaking of domestic arrears in September, and publishing
the forensic audit report in June. Steps toward developing a remedial
action plan to address the findings of the forensic audit are advancing
“We appreciate the open dialogue on the 2020 budget, which strikes a
balance between meeting priority spending needs and navigating the tight
financing situation. To this end, the Government’s efforts to mobilize
domestic revenue are advancing well, thanks to significant tax
administration measures, such as operationalizing the Integrated Tax
Administration System (ITAS). Looking ahead, continuing to generate strong
revenues to finance Sierra Leone’s large priority spending needs requires a
mix of both tax policy and administration reforms. The IMF team welcomes
the Government’s committed efforts to promote more efficient spending and
improve public finance management. Planning arrears clearance—most of which
originated in 2016/17—in a manner that is transparent, equitable, fiscally
sustainable, and limits the risks to financial stability is an important
step in this direction.
“Ongoing efforts to bolster the independence and effectiveness of monetary
policy will support the Bank of Sierra Leone’s (BSL) objective to bring
inflation down to single-digits in the medium term. Limiting recourse to
domestic bank financing of the budget will reinforce efforts to achieving
this goal. Maintaining a flexible exchange rate system and continuing to
build foreign exchange reserves will boost resilience to economic shocks,
while the impact of recent foreign exchange directives should be closely
“The Government and the IMF team reached preliminary agreement on
macroeconomic and financial policies that could pave the way for the IMF’s
Executive Board to consider the second ECF review, scheduled for January
2020. Completion of the review would make available SDR 15.56 million
(US$20.0 million), bringing total disbursements under the program to about
SDR 46.56 million (US$62.2 million).
“The IMF team met with a range of government representatives—including
President Bio, Minister of Finance Saffa, Minister of Planning and Economic
Development Kai-kai, Bank of Sierra Leone Governor Kallon, Auditor General
Taylor‑Pearce, Minister of Youth Affairs Bangura—as well as representatives
from private and financial sectors, civil society organizations, and
development partners. We thank all our partners for their warm hospitality,
and constructive and rich discussions.”
IMF Communications Department
PRESS OFFICER: Meera Louis
Phone: +1 202 623-7100Email: MEDIA@IMF.org