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The International Monetary Fund (IMF) Team that visited Sierra Leone for the sixth review of the country’s financial and economic program, has revealed in their statement that Sierra Leone’s macroeconomic outlook has weakened.
This statement was made after their visit in Freetown, from November 30 to December 9, 2022, for the above-mentioned program supported by the Extended Credit Facility (ECF). The ECF arrangement for Sierra Leone was approved on November 30, 2018.
The International Monetary Fund (IMF) mission was led by Mr. Christian Saborowsk who at the end of the mission issued statements.
In his statement he said during the mission, the IMF team and the authorities discussed macroeconomic developments, against a challenging global backdrop. He stated that Sierra Leone’s macroeconomic outlook has weakened since the completion of 5 th ECF review in July, adding that Russia’s war in Ukraine and related sanctions have contributed to exchange rate depreciation, rising inflation, and expenditure pressures.
He added that a larger-than-expected terms-of-trade decline and rising prices have weighed on demand and that Food insecurity has intensified.
In another statement, he stated that 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.
He mentioned some senior government officials, members of the private sector, civil society organizations, and development partners the mission met with. Amongst were: 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.
He concluded that the mission wishes to thank the Sierra Leonean authorities for the warm welcome, constructive discussions, and the positive spirit of cooperation, stating that discussions, including on overall progress in the context of the 6th review of the ECF arrangement, will continue over the coming weeks.
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 5½ years, and a final maturity of 10 years.
