IMF Executive Board Approves US$50 million Disbursement to Sierra Leone to Address the Continuing Impact of the COVID 19 Pandemic
IMF News, March 15, 2021
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Bibliographic details
- Published: March 15, 2021
Key decision
- Executive Board approved a disbursement of SDR 35.26 million (US$50.37 million or 17 percent of quota) under the Rapid Credit Facility (RCF).
- Approval date: March 15, 2021.
- Press Release No. 21/69.
Rationale and immediate purpose
- Purpose: to help meet urgent balance of payments and fiscal needs stemming from the deep and persistent impact of the COVID-19 pandemic.
- The disbursement is intended to help the authorities maintain their response and recovery efforts in 2021.
Economic and social impact of COVID-19 in Sierra Leone
- The authorities’ quick and decisive actions mitigated the impact of the COVID-19 pandemic, helping prevent a larger loss of life and even deeper economic costs.
- The pandemic will have long-lasting economic and social effects, with concerns about shrinking incomes, rising poverty, inequality, and food insecurity.
- Containment measures disrupted the transport of goods within the country, with a heavy impact on the services sector.
- Exports weakened significantly in 2020 due to weaker mining production and lower global demand.
- The crisis exacerbated setbacks to the Government’s revenue mobilization goals and strained fiscal financing and debt position.
Authorities’ policy response and programs
- Health and containment:
- Scaled up health and other priority spending in 2020, consistent with the Quick Action Economic Recovery Programme.
- Effective deployment of resources benefiting from lessons of the Ebola health crisis.
- Measures to preserve supply and livelihoods:
- Bank of Sierra Leone (BSL) introduced a special facility for importers to help prevent disruptions to the supply of food and essential goods.
- Quick Action Economic Response Programme included support to farmers, direct cash transfers to vulnerable households, and labor-intensive public works.
- 2021 budget: continues to prioritize COVID-19 and recovery-related spending within a tight budget envelope.
IMF assessment and messages from management
- Statement by Mr. Tao Zhang, Deputy Managing Director and Acting Chair:
- Sierra Leone is grappling with serious and persistent effects of the COVID-19 pandemic; while immediate health risks appear contained, 2021 will be another challenging year.
- Emergency financing under the RCF will help meet urgent external and fiscal financing needs in 2021.
- Authorities continue to strengthen governance, including transparently reporting on their COVID-19 response and publishing details of large emergency‑related procurement contracts.
- Authorities remain committed to maintaining macroeconomic and fiscal stability in line with their medium-term reform program supported by the Extended Credit Facility.
- Steps are being taken to address vulnerabilities to debt sustainability, with IMF technical assistance.
- Sierra Leone’s large development needs and tight financing situation will require concessional support, ideally grants, from the international community in the coming years.
Risks and financing needs
- Continued support from development partners is described as vital to recapture pre-crisis momentum and ensure a sustainable, inclusive recovery.
- The economic and social impact is likely to be protracted, exacerbating longstanding development challenges and the strained financing situation.
Contact for media
- IMF Communications Department, MEDIA RELATIONS
- PRESS OFFICER: Meera Louis
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- @IMFSpokesperson
IMF press release: March 15, 2021 — Press Release No. 21/69