The International Monetary Fund (IMF) team welcomes the authorities’ efforts to further mobilize domestic revenue, improve expenditure management and control, address the outstanding stock of budget arrears, stabilize public debt and reduce it to sustainable levels, and prioritize public investment aimed at reducing social and infrastructure gaps.
An International Monetary Fund (IMF) team led by Brian Aitken visited Freetown from September 18-October 2, 2018, to initiate discussions on a possible Extended Credit Facility arrangement that could be supported by the IMF.
At the end of the visit, Mr. Aitken issued the following statement:
The economic environment remains challenging, with output growth still recovering from the recent loss in iron ore mining and reduced activity in the non-mining sectors
“The economic environment remains challenging, with output growth still recovering from the recent loss in iron ore mining and reduced activity in the non-mining sectors. Output growth is likely to remain below 4 percent this year, and inflation remains elevated at 18 percent, reflecting a combination of factors including food and fuel price developments and pass-through from modest exchange rate depreciation. At the same time, the corrective actions the authorities have taken in recent months to shore up public finances in response to the cash shortfall have led to an increase in revenue and helped arrest the rise in public spending arrears. This is expected to result in some improvement in the 2018 budget performance this year.“Against this backdrop, the authorities’ policy focus is to safeguard macroeconomic stability and institute a package of structural reforms that place the country on a sustained path toward economic diversification and growth, employment creation, and improved social conditions, consistent with the objectives of the government’s medium-term plan, Education for Development.
“The IMF team welcomes the authorities’ efforts to further mobilize domestic revenue, improve expenditure management and control, address the outstanding stock of budget arrears, stabilize public debt and reduce it to sustainable levels, and prioritize public investment aimed at reducing social and infrastructure gaps. The Bank of Sierra Leone’s (BSL) objectives of bringing inflation to single digits, increasing foreign exchange reserves to boost resilience to economic shocks, and maintaining financial stability through enhanced bank regulation and supervision are essential for sustainable growth. We support efforts to increase the efficiency, effectiveness, transparency and accountability in the use of public resources, while strengthening social protection for the most vulnerable.
“Reflecting the progress in this week’s discussions, the authorities and the mission reached a broad understanding on economic policies and reforms that could be supported by the IMF in the context of a new ECF arrangement. Discussions will continue in the coming weeks with a view to presenting the program request to the IMF Executive Board before the end of this year.”
The team met with Vice President Jalloh, Finance Minister Jacob Saffa, Deputy Finance Minister Patricia Lavaley; BSL Deputy Governor Dr. Ibrahim Stevens, senior government and BSL officials, and development partners.
 The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems. The arrangement for Sierra Leone was approved by the IMF Executive Board in October 2013 (see Press Release No. 13/410).