Russia/Ukraine War Adversely Affects Sierra Leone’s Economy – IMF

As the International Monetary Fund (IMF) Staff Completes its Mission to the Republic of Sierra Leone, the team has faulted the country’s weakened economic outlook on the war between Russia and Ukraine and correlated sanctions.

According to the team, the above-mentioned factor has triggered a negative multiplier effect on the country’s macroeconomic outlook.

At the end of the mission, Mr Christian Saborowski the team lead issued the following statement:

“During this mission, the IMF team and the authorities discussed macroeconomic developments, against a challenging global backdrop.

Sierra Leone’s macroeconomic outlook has weakened since the completion of the 5th ECF review in July. Russia’s war in Ukraine and related sanctions have contributed to exchange rate depreciation, rising inflation, and expenditure pressures.

A larger-than-expected terms-of-trade decline and rising prices have weighed on demand. Food insecurity has also intensified”.

It should be noted that the International Monetary Fund (IMF) mission, led by Mr Christian Saborowski, visited Freetown from November 30 to December 9, 2022, for the sixth review of Sierra Leone’s financial and economic program supported by the Extended Credit Facility (ECF).

The ECF arrangement for Sierra Leone was approved on November 30, 2018.

The authorities and the IMF team also discussed the authorities’ progress on the structural reform agenda, as well as measures to contain budgetary pressures, maintain debt sustainability, mobilize domestic revenues, strengthen public financial management, address inflationary pressures, and foster financial stability. Discussions, including on overall progress in the context of the 6th review of the ECF arrangement, will continue over the coming weeks.

The mission met with Minister of Finance Dennis K. Vandi, Deputy Ministers Sheku A. F. Bangura and Bockarie Kalokoh, Deputy Governors Ibrahim L. Stevens and Sheikh A. Y. Sesay, senior government officials, members of the private sector, civil society organizations, and development partners.

The mission wishes to thank the Sierra Leonean authorities for the warm welcome, constructive discussions, and positive spirit of cooperation.

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The Extended Credit Facility (ECF) is the IMF’s main tool for medium-term financial support to low-income countries. It provides for a higher level of access to financing, more concessional terms, enhanced flexibility in program design, and more focused, streamlined conditionality. Financing under ECF currently carries a zero-interest rate, with a grace period of 52 years, and a final maturity of 10 years.


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