Press Release No. 12/128

Press Release No. 12/128
April 11, 2012

An International Monetary Fund (IMF) mission visited Sierra Leone during March 28-April 11, 2012 to conduct discussions for the fourth review of the program supported under the Extended Credit Facility (ECF) that was approved by the IMF Executive Board in June 2010. The mission met with His Excellency, President Ernest Bai Koroma; Minister of Finance and Economic Development, Dr. Samura Kamara; the Governor of the Bank of Sierra Leone, Mr. Sheku Sesay; other senior officials of the government and the central bank; representatives of the business community and CSOs; and development partners.

The following statement was issued today in Freetown by Malangu Kabedi-Mbuyi, IMF Mission Chief for Sierra Leone:

“Sierra Leone’s economy continued to expand in 2011 on the back of agriculture, construction, and services, supported by increased energy supply and infrastructure investments. Real gross domestic product (GDP) growth in 2011 is estimated at 6 percent. Price pressures have receded somewhat since mid-2011 and consumer price inflation eased to 16.9 percent (year-on-year) at end-2011, as food price increases subsided and tight monetary policy helped contain non-food inflation. Gross international reserves remain at a comfortable level; and the leone has been relatively stable, depreciating by 4 percent (against the dollar) over the course of the year.

“The authorities agreed with the mission on the need to enhance fiscal consolidation efforts, while also addressing Sierra Leone’s large infrastructure and social service needs. In this respect, the mission stressed that it was important to constrain non-priority expenditure in the remainder of 2012, and to enhance expenditure and treasury cash flow management. It encouraged the authorities to take appropriate measures in anticipation of challenges that would arise from the expected surge in resource revenue in the coming years, notably for fiscal and monetary policies.

“The mission concurs with the Bank of Sierra Leone’s monetary policy stance and encourages it to use its policy instruments proactively to strengthen liquidity management and support price stability.

“Performance under the program at end-December 2011 was mixed. With the exception of the continuous zero-ceiling on contracting of nonconcessional external debt, all quantitative criteria for end-December 2011 were met. However, slippages in budget execution translated into a higher-than-anticipated overall deficit financed through accumulation of unpaid bills. Regarding structural reforms, implementation of some of the measures planned for end-December were delayed. Discussions with the authorities will continue in the coming weeks, with a view to paving the way for consideration of the review by the IMF’s Executive Board in June.

“The mission would like to thank the authorities for their continued excellent cooperation.”