The International Monetary Fund (IMF) has approved a US$172.1mn extended credit facility for Sierra Leone
This credit facility aims to support the country’s economic and financial reforms with an immediate disbursement of US$21.5mn.
The remaining amount will be phased over the duration of the programme, subject to semi-annual reviews, IMF stated in a press release.
The authorities’ Extended Credit Facility (ECF)-supported programme aims at tackling new challenges that have arisen since June 2017 while at the same time, improving the prospects for long-term growth. In particular, addressing the fiscal slippages, revenue mobilisation and expenditure control to achieve fiscal sustainability and medium-term growth objectives.
The deputy managing director of IMF, Tao Zhang, said, “The goals of the new programme remain focused on reducing inflation, mobilising revenue to allow for necessary spending consistent with debt sustainability, safeguarding financial stability, and maintaining external resilience to shocks. These are critical for strong, sustained growth.”
“Revenue mobilisation is central to the success of the programme. In the near term, maintaining the improved revenue performance of the last several months is essential for preventing a reemergence of budget arrears and establishing budget credibility,” he added.
“The government’s recent reform to operationalise the Treasury Single Account is a welcome step, as are policies to ensure that spending commitments are in line with the available financing envelope. More broadly, these efforts will lead to better governance, helping promote macroeconomic stability and inclusive growth,” he explained.
“The program aims to reduce the country’s debt burden over the longer term. Infrastructure spending remains essential to improving growth prospects, but the country’s high debt means that priority should be given to projects with high economic returns. External borrowing will be anchored by the objective of reducing the risk of debt distress,” Zhang concluded.
