Press Release No. 12/381

Press Release No. 12/381
October 4, 2012

An International Monetary Fund (IMF) mission led by Ms. Malangu Kabedi-Mbuyi visited Freetown during September 20–October 3 to carry out discussions for the 2012 Article IV consultation and the fifth review of Sierra Leone’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF). The mission met with His Excellency, President Ernest Bai Koroma; and held discussions with Minister of Finance and Economic Development, Samura Kamara; Minister of Trade and Industry, Richard Konteh; Central Bank Governor, Sheku Sesay; representatives of the business community; development partners; and other senior officials from the Government and the Central Bank.

At the end of the mission, Ms. Kabedi-Mbuyi issued the following statement in Freetown:

“Sierra Leone’s economic growth has strengthened in recent years, driven by expansion in agriculture, services and construction activities. Real gross domestic product (GDP) growth increased from 3.2 percent in 2009 to 6 percent in 2011. The coming on stream of iron ore production in late 2011 is expected to boost growth and exports significantly in 2012 and beyond. Inflationary pressures have trended downwards since mid-2011, aided by a sharp fall in non-food inflation, a tight monetary policy stance, and stability in the exchange rate. The external position is set to benefit from increased mining exports and reduced iron ore-related imports.

“Policy discussions focused on the need to continue fiscal consolidation efforts in 2012-13 by maintaining expenditure restraint, enhancing non-mineral revenue mobilization, and advancing public financial management reforms. The mission stressed that economic policies should continue to support macroeconomic stability, and long-term debt sustainability.

“The medium-term prospects are favorable. However, they are subject to downside risks related to the uncertain global economic outlook and potential adverse movements in commodity prices for Sierra Leone. To support broad-based growth and reduce the economy’s vulnerability to exogenous shocks, the authorities would need to sustain efforts to improve the business environment and address impediments to growth. Key among these are continued investment in infrastructure to support productivity gains in the private sector, increased economic diversification, and broader access to financial services, particularly for small- and medium-sized enterprises to create employment opportunities. The mission welcomed progress in the preparation of the authorities’ new poverty reduction and growth strategy, the Agenda for Prosperity, which outlines policies and reforms to address Sierra Leone’s developmental challenges.

“Regarding program performance at end-June, the mission found that all quantitative performance criteria and indicative targets were met, and that progress was being made in implementing the government’s privatization agenda. With support from the IMF and other development partners, the authorities prepared legislation outlining fiscal regimes for natural resources.

“The Executive Board of the IMF is expected to consider the fifth review under the ECF arrangement and the 2012 Article IV consultation after the November presidential and parliamentary elections, once the IMF staff has reached understandings with the new Government on a policy framework for 2013 that could form the basis for completion of the review.

“The mission wishes to thank the Sierra Leone authorities for candid and constructive discussions.”