IMF approves $50 million for Sierra Leone to manage impact of the COVID-19 pandemic

Sierra Leone Telegraph: 16 March 2021:

The IMF Executive Board yesterday announced that is has approved a US$50.37 million disbursement under the Rapid Credit Facility “to help meet the authorities’ urgent financing needs and support their continued response to the pandemic”, and address “the urgent balance of payments and fiscal needs stemming from the deep and persistent impact of the pandemic”.

According to the IMF statement; “The Government’s quick and decisive actions to contain COVID-19 prevented a larger outbreak and saved lives, yet they also came at an economic cost. Containment measures disrupted the transport of goods within the country, with a heavy impact on the services sector. At the same time, exports weakened significantly in 2020 due to weaker mining production and lower global demand.”

“The authorities’ policy response has focused on saving lives and protecting livelihoods. The Bank of Sierra Leone (BSL) swiftly introduced a special facility for importers to help prevent disruptions to the supply of food and essential goods.

“Benefiting from the lessons of the Ebola health crisis, the authorities effectively deployed resources to support both health and containment efforts. Their Quick Action Economic Response Programme addressed the broader economic and social response, via support to farmers, direct cash transfers to vulnerable households, and labor-intensive public works.

“The economic costs of the crisis—including setbacks to the Government’s revenue mobilization goals—together with the necessary crisis response have exacerbated the already-tight fiscal financing and strained debt position. Continued support from development partners will be vital to recapture pre-crisis momentum and ensure a sustainable, inclusive recovery,” the IMF statement reads.

At the conclusion of the IMF Board discussion, Mr. Tao Zhang, Deputy Managing Director and Acting Chair, said:

“Sierra Leone is grappling with serious and persistent effects of the COVID-19 pandemic. While the immediate health risks appear contained, 2021 will be another challenging year. The economic and social impact is likely to be protracted, exacerbating longstanding development challenges and the strained financing situation.

“The authorities have responded promptly to the crisis. In 2020, they scaled up health and other priority spending, consistent with their Quick Action Economic Recovery Programme. The Bank of Sierra Leone’s special credit facility helped ensure that food supplies were not disrupted. The 2021 budget continues to prioritize COVID-19 and recovery-related spending within a tight budget envelope.

“Emergency financing from the IMF under the Rapid Credit Facility will help meet urgent external and fiscal financing needs in 2021, and ensure that the authorities can maintain their response and recovery efforts.

“In line with their National Development Plan priorities, they continue to strengthen governance, including transparently reporting on their COVID-19 response, and publishing details of large emergency‑related procurement contracts.

“Looking ahead, the authorities remain committed to maintaining macroeconomic and fiscal stability, in line with their medium-term reform program supported by the Extended Credit Facility. They are taking steps to address vulnerabilities to debt sustainability, with IMF technical assistance.

“Nevertheless, Sierra Leone’s large development needs and tight financing situation will require concessional support, ideally grants, from the international community in the coming years.”

Yesterday marked the start of the rolling-out of the country’s Covid vaccination programme, with senior politicians across the political divide, including the president and ministers taking the vaccine. (Photo: President Bio receiving the covid vaccine).

Sierra Leone has fared much favourably than most African countries with 3,932 positive cases of the Coronavirus reported so far; 1,639 of that number are women, representing 41.6%, while 2,293 are male, representing 58.4% of the total number of cases. Western Area Urban remains the epicentre for infection in the country with 2,244 cases.

But it is the economy that has taken a direct hit from the pandemic, after decades of poor economic performance, rising public debt and massive unemployment.

Since the start of the Covid pandemic in March 2020, Sierra Leone has received over $300 million in international support to pay for much needed social and economic programmes.

2 Comments

  1. CORRUPT CASH TRANSFER OOOOO. The promised cash transfer is 79% fake. I was given a check in 2020 for the cash transfer and since then…..

  2. The looming Socio-economic crisis facing Sierra Leone, post the COVID19 pandemic, and our country’s economic prospect to bunce back, once we head into the recovery fast lane, will all depend on the type of policies that the government pursues in terms of supporting small businesses, by extending credit to small and medium sized businesses, which in turn will boost much needed employment, and digital training for the Youths, if we are to stand any chance of seeing the green shoots of economic recovery. And one area that needs urgent attention is the agricultural sector. So far the IMF has shown a degree of patience and understanding. Despite all the avalanche of corruption cases hitting the headlines every day in Sierra leone. Investing in infrastructure projects like roads, and supply of power will address some of the core issues that have held us back, for a long time.

    The problem with our country, is our dependency on foreign assistance, instead of developing economic policies that look for long term economic growth, instead of looking at the clock of the elections cycle. If we move away from such short term goals mentally to please voters, it will make our country more resilient against any unpredictable future shocks like the COVID19 pandemic. The lock down restriction, which help to slow trade between countries exacerbated existing problems. One of the sectors that was hit hard, and was in the eye of the COVID19 storm is the tourism sector. Then when you think our country is dealing with endemic corruption, and the failure of the Bio government to get its priorities right, increased our country’s vulnerability to external shocks. Our government needs to invest for the long term. Short term goals are short sighted.

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