IMF Executive Board Concludes 2019 Article IV Consultation with Sierra Leone
IMF News, April 6, 2020
Source details
- Canonical URL
- IMF Executive Board Concludes 2019 Article IV Consultation with Sierra Leone
Other formats
Bibliographic details
- Published: April 6, 2020
Overview
- The Executive Board completed the 2019 Article IV consultation with Sierra Leone on April 3, 2020.
- The Board also completed the second review of Sierra Leone’s performance under their ECF arrangement; a separate press release covers the ECF review.
- Since early 2018 the Government implemented key reforms and launched a new National Development Plan emphasizing education, infrastructure, and governance.
Macroeconomic developments and outlook
- Growth:
- Growth stabilized at 3.5 percent in 2018.
- Estimated growth of 5.1percent in 2019.
- Based on programmed policies, growth was projected to average around 4½percent over the medium term.
- Inflation:
- Inflation moderated to under 14percent by end-2019.
- Consumer prices (end-of-period): 15.3 (2017), 14.2 (2018), 14.0 (2019), 13.9 (2020), 12.0 (2021), 13.0 (2022), 11.0 (2023), 9.6 (2024), 8.8 (2025), 8.0 (2026), 7.5 (2027).
- Consumer prices (average): 18.2 (2017), 16.0 (2018), 15.7 (2019), 14.8 (2020), 13.4 (2021), 10.3 (2022), 9.2 (2023), 8.4 (2024), 7.8 (2025).
- Recent performance:
- The economy began to cement its recovery with a broad‑based recovery of economic activity in 2019.
- The current account deficit narrowed substantially, though pressure on the exchange rate persists.
- COVID‑19 risk:
- The immediate outlook is overshadowed by the rapidly unfolding global COVID‑19 pandemic.
- Prospects for the remainder of 2020 are subject to considerable uncertainty.
- The magnitude of the impact will depend heavily on the extent of prevention and containment measures and associated economic spillovers.
- The COVID‑19 shock compounds development challenges following recovery from the Ebola health crisis and past lax macroeconomic policies.
- Avoiding long‑lasting scarring will require significant support from development partners.
Fiscal policy, financing, and debt
- Overall budget deficit (percent of non‑iron ore GDP):
- Declined from 11.3percent in 2017 to 7.7 percent in 2018 and an estimated 6.3 percent in 2019.
- Central government (percent of non-iron ore GDP):
- Domestic primary balance 2/: -4.5 (2017), -0.5 (2018), -0.7 (2019), -0.6 (2020), 0.3 (2021), 1.0 (2022), 1.5 (2023), 1.4 (2024).
- Overall balance: -8.8 (2017), -5.6 (2018), -3.6 (2019), -2.9 (2020), -3.3 (2021), -3.4 (2022), -2.6 (2023), -2.4 (2024), -2.3 (2025).
- Overall balance (excluding grants): -7.7 (2017), -7.4 (2018), -6.3 (2019), -6.7 (2020), -5.8 (2021), -4.9 (2022).
- Revenue (excluding grants): 12.3 (2017), 13.7 (2018), 16.3 (2019), 16.8 (2020), 17.1 (2021).
- Grants: 2.1 (2017), 2.4 (2018).
- Total expenditure and net lending: 23.5 (2017), 21.4 (2018), 21.5 (2019), 20.6 (2020), 22.2 (2021), 21.2 (2022), 20.8 (2023), 21.1 (2024), 21.3 (2025).
- Public debt (percent of non-iron ore GDP):
- 69.4 (2017), 68.7 (2018), 62.6 (2019), 67.4 (2020), 63.9 (2021), 66.6 (2022), 65.6 (2023), 63.1 (2024), 60.0 (2025), 56.9 (2026), 53.8 (2027).
- Domestic: 28.0 (2017), 27.9 (2018), 23.4 (2019), 24.7 (2020), 24.4 (2021), 19.4 (2022), 17.8 (2023), 12.7 (2024).
- External public debt (including IMF): 41.4 (2017), 40.8 (2018), 39.3 (2019), 42.6 (2020), 39.6 (2021), 47.2 (2022), 47.8 (2023), 45.8 (2024), 44.2 (2025), 42.4 (2026).
External sector and reserves
- Current account balance (percent of non-iron ore GDP, including official grants):
- -21.1 (2017), -18.7 (2018), -11.7 (2019), -14.1 (2020), -10.2 (2021), -11.3 (2022), -11.4 (2023), -10.9 (2024), -10.8 (2025), -10.4 (2026), -9.5 (2027).
- Current account balance (excluding official grants): -22.5 (2017), -19.7 (2018), -15.2 (2019), -17.4 (2020), -12.9 (2021), -14.2 (2022), -13.7 (2023), -13.5 (2024), -12.0 (2025).
- Gross international reserves (excluding swaps, in US$ millions): 501 (2017), 487 (2018), 500 (2019), 506 (2020), 551 (2021), 572 (2022), 577 (2023), 586 (2024), 592 (2025), 616 (2026), 651 (2027).
- Net international reserves (excluding swaps, in US$ millions): 128 (2017), 107 (2018), 75 (2019), 125 (2020), 113 (2021), 154 (2022), 158 (2023), 204 (2024), 270 (2025), 360 (2026), 452 (2027).
- Gross international reserves (excluding swaps), months of imports: 3.7 (most recent available).
Monetary, financial sector, and structural issues
- Money and credit:
- Domestic credit to the private sector: 4.9 (2017), 30.6 (2018), 24.9 (2019), 22.9 (2020), 9.3 (2021), 20.2 (2022), 2.5 (2023).
- Domestic credit to the private sector in percent of non-iron GDP: 5.2 (2017), 5.6 (2018), … (2019), 6.0 (2020), 5.7 (2021), 5.8 (2022), 5.3 (2023), 4.8 (2024).
- Base money: 9.0 (2017), 6.5 (2018), 25.2 (2019), 12.4 (2020), 16.6 (2021), 26.3 (2022), 15.5 (2023), 14.1 (2024), 13.3 (2025), 12.5 (2026).
- M3: 7.0 (2017), 14.5 (2018), 18.4 (2019), 14.3 (2020), 17.4 (2021).
- Financial sector stability:
- Directors welcomed efforts to strengthen financial sector stability through improved guidelines and oversight, and to promote financial inclusion, including leveraging the Financial Sector Stability Review.
- Exchange rate and foreign exchange markets:
- Directors highlighted that deepening foreign exchange markets could help level the playing field for businesses.
- National currency per US dollar (average): 7,366 (2017), 7,938 (2018), 9,076 (2019).
- National currency per US dollar (EOP): 7,537 (2017), 8,396 (2018), 9,756 (2019).
Executive Board assessment and policy recommendations
- Directors agreed with the thrust of the staff appraisal and welcomed progress in stabilizing the economy under the authorities’ reform program.
- In light of the serious risk from COVID‑19, Directors welcomed decisive health and economic actions and called for contingency planning and continued external support given the country’s high debt burden and capacity constraints.
- Priorities and recommendations:
- Continue ensuring fiscal sustainability and create fiscal space to meet development needs over the medium term.
- Mobilize domestic revenues.
- Strengthen public and debt management and improve management of fiscal risks, particularly from state entities and the financing of large public investments.
- Implement the new Medium‑Term Debt Management Strategy and develop a transparent and sustainable plan for arrears clearance.
- Bring down inflation and enhance the central bank’s operational independence.
- Improve liquidity management to better align the policy rate with money market rates.
- Deepen foreign exchange markets.
- Strengthen financial sector oversight and promote financial inclusion.
- Improve the business climate to facilitate private sector‑led growth.
- Directors took note of the authorities’ corrective actions addressing the misreporting incident related to the inadvertent omission of securities issued to the non‑bank sector.
Selected economic indicators (highlights)
- GDP at constant prices (annual percent change): 3.8 (2017), 3.5 (2018), 5.1 (2019), 4.7 (2020), 4.2 (2021), 4.6 (2022), 4.5 (2023).
- GDP excluding Iron ore (annual percent change): 3.6 (2017), 5.4 (2018), 4.4 (2019).
- Exports of goods (annual percent change): -0.3 (2017), -2.0 (2018), 38.7 (2019), 11.4 (2020), 21.6 (2021), 28.1 (2022), 10.9 (2023), 6.3 (2024), 7.3 (2025).
- Imports of goods (annual percent change): 23.7 (2017), 0.6 (2018), 5.9 (2019), 4.0 (2020), 3.9 (2021), 3.4 (2022).
- Gross capital formation (percent of non-iron ore GDP): 19.2 (2017), 16.9 (2018), 17.9 (2019), 17.6 (2020), 18.7 (2021), 19.0 (2022), 19.3 (2023).
- National savings (percent of non-iron ore GDP): -1.9 (2017), -1.8 (2018), 1.9 (2019), 7.7 (2020), 5.5 (2021), 7.9 (2022), 9.8 (2023).
- GDP at market prices (billions of Leone): 27,465 (2017), 32,402 (2018), 38,015 (2019), 37,911 (2020), 44,631 (2021), 43,846 (2022), 50,908 (2023), 58,305 (2024), 66,268 (2025), 74,859 (2026), 84,287 (2027).
- Excluding iron ore in millions of US$: 3,700 (2017), 4,082 (2018), 4,190 (2019), 4,142 (2020), 4,354 (2021), 4,149 (2022), 4,213 (2023), 4,300 (2024), 4,426 (2025), 4,588 (2026), 4,802 (2027).
- Per capita GDP (US$): 498 (2017), 534 (2018), 548 (2019), 535 (2020), 559 (2021), 523 (2022), 521 (2023), 522 (2024), 527 (2025), 537 (2026), 553 (2027).
IMF Communications Department — Press Release No. 20/134
