The executive board of the International Monetary Fund (IMF) on Tuesday approved a new disbursement of $44.2 million to Sierra Leone to support “the government’s policy and reform efforts aimed at reinforcing the country’s recovery from the pandemic, preserving macroeconomic stability, and sustaining inclusive long-term growth.”
According to the IMF, early signs suggest that Sierra Leone’s economy is recovering, however, the West African nation continues to face COVID risks, and a tight financing situation amidst substantial development and priority expenditure needs.
The latest disbursement was approved after the IMF board completed the third and fourth reviews of Sierra Leone’s performance under the program supported by an Extended Credit Facility (ECF).
IMF said the completion of the third and fourth reviews under the Extended Credit Facility “underscores the government’s ongoing commitment to critical reforms and safeguarding macroeconomic stability.”
The IMF Executive board also approved the rephasing and extension of the ECF arrangement by 12 months.
On November 30, 2018, the IMF board approved Sierra Leone’s 43-month ECF arrangement for about $172.1 million.
IMF said the government’s reform agenda, supported by the ECF, continues to aim at creating fiscal space for development by strengthening revenue mobilization, containing current spending and improving the efficiency of public investment.
It projected that growth would recover to pre-COVID-19 levels in the medium term, but there are considerable risks to the outlook.
“Over the medium term, non-mining growth is projected to average around 4.5 percent. The external position would remain vulnerable as international reserve coverage is expected to decline. Risks to the outlook are significant and include, for instance, unexpected global shifts in the COVID-19 pandemic or an intensification of the third wave, uncertainties in the mining sector, lower-than-expected support from development partners or slower-than-expected reform implementation,” IMF said.