Sierra Leone: IMF approves USS46.14m disbursement

By 10:08 Thu, 26 Nov 2015 Comments

Executive Board of the International Monetary

Fund (IMF) has approved US$64.59 million

(equivalent of SDR 46.665 million of the local

country’s currency) to be distributed in three

tranches to Sierra Leone.

The augmentation of access was approved after the

Executive Board completed the third and fourth

review of Sierra Leone’s performance under a

three-year arrangement by the Extended Credit

Facility (ECF).

IMF said: “The completion of the third and fourth

review enables the immediate disbursement of US

$46.I4 million (SDR 33.335 million). This amount

includes the first tranche of the augmentation in an

amount of about US$2 l .53 million (SDR 15.555


The Executive Board also approved the authorities’

request for the re-phasing of the fifth and sixth

disbursements under the arrangement.

In completing the review, the Executive Board

additionally approved the authorities’ request for

waivers of non-observance of the end December

2014 performance criteria on the ceiling on Net

Domestic Bank Credit to Government.

“The ECF arrangement for SDR 62.22 million (about

US$95.9 miIIion) was approved in October and was

augmented twice,” the Fund said.

Following the Executive Board’s discussion on

Sierra Leone, Min Zhu, Deputy Managing Director

and Acting Chair, said: “With the World Health

Organization declaring Sierra Leone Ebola free on

November 7, the country now faces the difficult

challenge of economic recovery.

“Complicating that task, the decline in iron ore

prices has led to the shutdown of the main iron ore

mines, with consequent sharp declines in GDP and

exports, and reduced fiscal revenues.”

He said; “As a result, the fiscal challenges in 2016

will be substantial. It will be critical for the

authorities to ensure sufficient revenues and

financing to priority spending, especially for the

post Ebola Economic Recovery Strategy (ERS).

“This will require strong moves on tax policies and

continued efforts on tax administration.

“The Bank of Sierra Leone should continue

targeting price stability in support of economic


“With depreciation pressures stemming the lost

iron ore exports, BSL should enhance monetary

policy instruments and liquidity forecasting to

increase its ability to respond to any second round

inflationary pressures.

“BSL should also enhance supervision of the

financial sector, understand and resolve any

underlying stress through a timely diagnostic of

key troubled bank.

“The updated debt sustainability analysis shows

that while Sierra Leone’s risk of debt distress is

moderate, the economy is increasingly vulnerable

to further shocks. Thus, borrowing policies should

remain prudent in view of the narrow export base

and fragile fiscal position.

“Financing needs, particularly for investment

projects should continue to be covered mostly with

grant and concessional loans.”



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