By Modupe Gbadeyanka
The Executive Board of the International Monetary Fund (IMF) has completed the sixth review of Sierra Leone’s performance under the economic program supported by an Extended Credit Facility (ECF) arrangement and has approved the disbursement of $33.23 million for the country, bringing total disbursements under the arrangement to $253.81 million.
Also, in completing the review, the Executive Board approved a request for waiver for the non-observance of the continuous performance criterion on the net present value of the external debt and the non-introduction of multiple currency practices given corrective measures taken by the authorities.
Sierra Leone’s ECF arrangement was approved by the Executive Board for $86.86 million on October 21, 2013 and was augmented twice. It was subsequently extended until end-December 2016.
The government’s economic reform program supported by the ECF has achieved its key objectives despite the exogenous shocks of the Ebola epidemic and the collapse of iron ore prices and associated loss of production in 2014-2015.
It aims at ensuring stronger and more inclusive growth and plays a catalytic role for bilateral and multilateral assistance.
The economy proved resilient, supported by sound macroeconomic policies, together with generous support from development partners that helped ensure fiscal and external sustainability, while providing resources to begin implementing the post-Ebola Recovery Strategy. However, the authorities need more resources to mitigate the long – lasting impact of Ebola and commodities prices shocks.
Despite this improvement, challenges persist. Looking ahead, policy should focus on continuing to anchor economic stability through sound fiscal, monetary, and debt policies while making faster progress on structural reforms.
Diversifying growth, making it more inclusive and distributing its benefits more widely should be the overriding focus of economic policy.
The ECF is a lending arrangement that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems. The Executive Board also takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.
Adedapo Adesanya