June 13, 2018
An IMF mission led by Mr. Brian Aitken visited Freetown during June 4-12, 2018 to assess economic conditions and lay the basis for a follow-up mission, currently planned for late summer, that would aim to agree on a revised program arrangement.
The mission met with H. E President Julius Maada Bio, Minister and Deputy Minister of Finance, Financial Secretary, Governor and Deputy Governor of Bank of Sierra Leone and senior government officials.
At the end of the mission, Ms. Iyabo Masha, IMF Resident Representative for Sierra Leone issued the following press release.
“Economic growth slowed down to 3.5 percent in 2017, from 6.3 percent in 2016, mainly due to decline in iron ore mining as well as reduced activities in the non-mining sector. Inflation, which peaked at 20 percent in March 2017, fell to 15 percent in April 2018, partly reflecting the moderation in exchange rate depreciation. The outlook for 2018 is mixed. Following a slow start due to uncertainties about the general elections, economic activity has picked up somewhat in the second quarter. However, the economy will continue to face headwinds from the closure of the main iron ore mine early in the year, with annual growth currently projected at 3.7 percent,’ she said.
She noted that the current macro-financial environment was challenging.
‘Inadequate budget revenue and weak spending discipline have led to a sizeable increase in the stock of budget arrears over the last year, representing the main threat to near-term macroeconomic stability. To address this threat, the government has taken a number of steps to shore up public sector finances, including the roll out of the Treasury Single Account, a reduction in duty waivers and exemptions, stronger oversight over ministries, departments and agencies, and expenditure restraint.’
She observed that those steps have in recent weeks helped ease somewhat the short-run pressures on the budget’s borrowing need, but additional steps to boost revenue and control expenditure will be needed to ensure that public finances can be put on a sustainable basis going forward.
She said the process toward reaching agreement on a revised IMF-supported program continues to move forward.
‘During this mission, the IMF team and Sierra Leone authorities reached a common understanding on the key areas where additional progress will be needed. Some of these areas include a plan for financing the 2018-2019 budget; increasing accountability, transparency and oversight of ministries, departments and agencies; and advancing the legislative reform agenda in the areas of banking, public financial management, and revenue administration. If progress in these areas continues in the coming weeks as anticipated, a mission would return to Freetown in September with the goal of finalizing agreement on a new program arrangement.’