IMF国际货币组织全球-Sierra-Leone_First-Review-Under-the-Extended-Credit-Facility-Arrangement-Request-for-Waiver-for-Nonobservance-of-Performance-Criterion-and-Financing-Assurances-Review_74页_1mb

IMF Country Report No. 19/217: Sierra Leone

Core Content Summary

This document outlines the IMF's First Review Under the Extended Credit Facility (ECF) Arrangement for Sierra Leone, which was approved on November 30, 2018, for an amount of SDR 124.44 million (about US$172.1 million). The review, conducted on June 28, 2019, led to the disbursement of SDR 15.555 million (about US$21.62 million), bringing total disbursements under the ECF to SDR 31.11 million (about US$43.25 million). The authorities requested a waiver for non-observance of the performance criterion on net domestic assets (NDA) of the central bank, which was approved.

The ECF-supported program is aligned with the National Development Plan (NDP), which aims to reduce poverty, build a competitive and diversified economy, and improve governance and accountability. The program's goals include fiscal sustainability, priority spending, and inclusive growth. The Staff Report highlights that while the overall growth remained subdued, inflation has been declining, and fiscal performance has been on track, with lower-than-programmed fiscal deficits due to healthy revenues and significant underspending.

Main Views and Key Information

1. Economic Performance

• Real GDP growth slowed to 3.5% in 2018 from 3.8% in 2017.
• Inflation peaked at 19.3% in September 2018 and declined to 17.5% in March 2019.
• Fiscal deficit was lower than programmed due to revenue exceeding targets and under-spending.
• Domestic primary deficit narrowed to 0.5% of GDP in 2018H2.
• Current account deficit decreased from 14.5% of GDP in 2017 to 13.8% in 2018.
• Gross international reserves fell to US$483 million (3.6 months of imports) at the end of 2018.

2. Program Implementation

• The ECF-supported program is on track, with satisfactory implementation despite challenging economic conditions.
• The government's reform agenda is focused on revenue mobilization, expenditure control, and public investment efficiency.
• Structural reforms include tax policy improvements, public financial management reforms, and debt management strategies.

3. Monetary Policy

• Monetary policy is aimed at reducing inflation to single digits.
• The Bank of Sierra Leone (BSL) has enhanced governance and supervision, contributing to financial sector stability.
• Exchange rate flexibility and reserve buffers are emphasized to enhance economic resilience.

4. Fiscal and Debt Management

• The government is committed to fiscal sustainability and debt management.
• Reforms include clearing domestic arrears and reorienting spending toward social and infrastructure priorities.
• The BSL's bridge loan contributed to higher-than-programmed NDA, but partial repayment would have avoided the breach.

5. Risks and Outlook

• The economic outlook is cautiously promising, with real GDP growth projected to rebound to 5.1% in 2019 and stabilize around 4.75% in the medium term.
• Key risks include:
  • Global financial conditions tightening and energy price volatility.
  • Political resistance to reforms and donor financing shortfalls.
  • Reoccurrence of loss-making lending in state-owned banks.
• Mitigation strategies include:
  • Enhancing exchange rate flexibility.
  • Strengthening revenue mobilization and budget execution.
  • Maintaining fiscal discipline and ensuring transparency.

6. Structural Reforms

• Structural reforms are a central component of the program.
• The NDP and ECF are aligned, but the NDP has more ambitious revenue targets.
• Tax reforms, public financial management improvements, and debt management strategies are essential to sustain fiscal performance.

Key Documents and Attachments

• Letter of Intent and Memorandum of Economic and Financial Policies were submitted by the authorities.
• Technical Memorandum of Understanding was also included.
• Boxes and Tables provide detailed insights into fiscal operations, monetary developments, and risk assessment.

Conclusion

The IMF Executive Board has approved the disbursement and waiver request, recognizing the government's progress in reform implementation and fiscal management. The program remains on track, and continued reforms are essential to secure long-term sustainability and economic resilience. The NDP provides a strategic framework for inclusive growth and poverty reduction, supported by IMF financing and technical assistance.