IMF Reaches Staff-Level Agreement on a New 38-Month Extended Credit Facility Arrangement with Sierra Leone and Completes 2024 Article IV Mission

IMF News, September 20, 2024

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Canonical URL: IMF Reaches Staff-Level Agreement on a New 38-Month Extended Credit Facility Arrangement with Sierra Leone and Completes 2024 Article IV Mission

IMF staff and the Sierra Leonean authorities have reached a staff-level agreement on economic policies and reforms that could be supported by a new 38-month Extended Credit Facility (ECF) arrangement.
Requested access: SDR 187 million (about US$253 million).
The staff-level agreement is subject to approval by the IMF’s Management and Executive Board.
IMF mission conducted the 2024 Article IV consultation and program discussions during a visit from September 4 to 13, 2024.
Statement delivered by Mr. Christian Saborowski, mission chief.

Domestic primary deficit reduced by 2.8 percent of GDP in 2023 and on track toward reducing it by another 2.1 percent in 2024.
Year-on-year base money growth reduced from a peak of 63.4 percent in June 2023 to 8.8 percent in June 2024.
Policy rate increased by 7.25 percentage points since end-2022.
Inflation declined to 25 percent in August 2024, down from a peak of 55 percent in October 2023.
T-bill rates remain stubbornly high at over 40 percent.
International reserves have fallen to less than two months of imports.
Economic growth reached more than 5 percent in 2022 and 2023, buoyed by strong mining activity.
Public debt assessed as sustainable but at high risk of distress.
External position in 2023 assessed as broadly in line with the level implied by fundamentals and desirable policies.
Operational losses at the electricity distribution company (EDSA) continue, resulting in significant fiscal pressures.

Restore stability by:
- Bolstering debt sustainability.
- Addressing fiscal dominance.
- Bringing down inflation.
- Rebuilding reserves.
Support inclusive growth and poverty reduction through:
- Structural reforms, including to narrow gender gaps.
- Targeted social spending.
Revitalize the reform agenda to:
- Confront corruption.
- Strengthen governance, institutions, and the rule of law.
Advance the poverty reduction and growth aspirations outlined in Sierra Leone’s Medium Term National Development Plan (MTNDP) 2024-30.

Continue ambitious macroeconomic adjustment over the program period.
Enhance revenue mobilization.
Boost spending efficiency.
Manage fiscal risks to create room for priority social spending and investment.
Strengthen the monetary policy framework and maintain appropriately tight monetary conditions to safeguard internal and external stability.
Commit to reforms and sustained political and social consensus to make durable progress in fighting poverty and raising standards of living.
Promote gender equality and increase women’s economic participation to boost growth potential.
Improve the business environment by:
- Enhancing EDSA’s operational and technical efficiency.
- Strengthening customs administration and transparency.
- Addressing climate change risks.

The IMF staff team met with President Bio; Finance Minister Bangura; Deputy Finance Ministers Alie and Kalokoh; Financial Secretary Dingie; Bank of Sierra Leone Governor Stevens; Deputy Governors Tucker and Sesay; Commissioner General Bangura of the National Revenue Authority; senior government and BSL officials; representatives from the private sector; and development partners.

IMF Communications Department — Press Release No. 24/388, September 20, 2024