Sierra Leone: Sixth and Seventh Reviews Under the Extended Credit Facility, Requests for Waivers of Nonobservance of Performance Criteria, Extension of the Arrangement, Rephasing of Disbursements, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Sierra Leone
IMF Staff Country Reports, June 21, 2023
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- Sierra Leone: Sixth and Seventh Reviews Under the Extended Credit Facility, Requests for Waivers of Nonobservance of Performance Criteria, Extension of the Arrangement, Rephasing of Disbursements, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Sierra Leone
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Bibliographic details
- Published: June 21, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400245367.002
Overview
- This content unit is a staff country report (IMF Staff Country Reports) dated June 21, 2023, with Series: Country Report No. 2023/214 and Issue: 214.
- The summary provided focuses on a technical note discussing Botswana’s stress testing and systemic risk analysis for insurers and retirement funds.
- Subjects listed: Arrears, Debt sustainability, External debt, International organization, Monetary policy, Public debt, Revenue administration.
- Keywords listed: Arrears, Debt sustainability, expenditure transparency, FX intervention, Global, government paper, inflation-depreciation spiral, Policy implementation risk, Sierra Leonean authorities.
Key Findings on Insurers and Systemic Risk
- Insurers are resilient in the adverse scenario.
- Vulnerabilities exist with regard to concentrated exposures to domestic banks.
Impact on Retirement Funds
- Retirement funds in Botswana are designed as defined contribution schemes, thereby effectively passing on investment risks to scheme members.
- The adverse scenario has a sizable impact on members with only few years to retirement, reducing future pension values by more than 15 percent compared to the baseline.
- The new Retirement Fund Act, adopted in 2022, is very likely to influence the liquidity of retirement funds, calling for a robust liquidity management.
Regulatory, Supervisory, and Data Recommendations
- The risk analysis highlights the need for Non-Bank Financial Institutions Regulatory Authority to substantially improve its data analytics and resources.
- The Financial Sector Assessment Program recommends:
- A review of supervisory reporting templates.
- More robust processes to ensure complete and consistent reporting.
- Implementation of a data management system that allows for horizontal and financial stability analysis.
- Further recommended actions for authorities:
- Conduct regular stress tests of large insurers and retirement funds.
- Analyze risks stemming from concentrated bank exposures.
Content in this bundle
- 1sleea2023001