By Kemo Cham
While Sierra Leone’s economy continues to recover, its outlook remains challenging, an International Monetary Fund (IMF) review mission has found.
The mission which concluded its review on Wednesday November 13, hailed the government's development programme and noted that its focus on improving its citizens' well-being is an ambitious endeavor. But it also had pointers for the government in its effort to meet its commitment in line with agreements with the Fund.
The team, which visited Freetown from October 30, was in the country to conduct the review under the 2019 Article IV consultation and the second review of the IMF arrangement under the Extended Credit Facility (ECF) as approved by the Executive Board on November 30, 2018.
The team, headed by Karen Ongley, met with several government officials, including President Julius Maada Bio, Minister of Finance Jacob Jusu Saffa, Minister of Planning and Economic Development Francis Mustapha Kaikai, and Governor of the Bank of Sierra Leone, Kelfala Kallon. They also met with the Auditor General, Laura Taylor Pearce, Minister of Youth Affairs Mohamed Bangura, as well as representatives from the private and financial sectors, civil society organizations, and other development partners.
“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,” the mission said in its preliminary report published on Thursday, November 14.
It added: “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.”
While praising the government’s National Development Plan (NDP) for its promises to put the country on a sustainable development path, among others, the IMF mission said pursuing the “important goals” contained in the document would require “carefully calibrated policies.”
The preliminary findings of the team, as contained in its statement, credited progress under the ECF-supported program as having helped stabilize the macroeconomy. The Government was hailed for meeting all of the end-June 2019 quantitative performance criteria and indicative targets—net credit to the government and net domestic assets of the Bank of Sierra Leone by large margins. Sierra Leone also met the indicative targets on domestic government revenue, poverty-related spending, and the domestic primary balance, according to the report.
The country also 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 were also advancing well, the report said.
The next review for Sierra Leone is scheduled for January 2020. But to pave way for this, the Government and the Fund reached preliminary agreement on macroeconomic and financial policies that must be attained.
Completion of the review would make available US$20 million for Sierra Leone, bringing its total disbursements under the program to about US$62.2 million.
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