World Bank to Sierra Leone government rescue again with another $75 million for economic reform

Sierra Leone Telegraph: 17 December 2021:

The World Bank Board has approved an International Development Association (IDA) grant of $75 million to improve natural resources governance, enhance inclusiveness and promote sustainability of development financing in Sierra Leone.

According to the World Bank, this Development Policy Operation (DPO) is the first in a series of three operations focusing on Inclusive and Sustainable Growth Financing, aimed at supporting the government’s efforts to build the foundations for a robust, inclusive, and sustainable economic recovery from the pandemic.

Since the start of the pandemic, the World Bank has provided over $100 million to the government of Sierra Leone to help cope with the impact of the Covid pandemic. Just last week, the World Bank approved another $60 million to support Sierra Leone’s crumbling health sector.

But with growing poverty across the country and this week’s publication of the country’s Auditor General Report for the 2020 Financial Year showing grotesque misappropriation and misuse of public funds, questions must be asked as to the effectiveness and impact of donor funds in Sierra Leone. Where is all the money gone?

“The World Bank continues to be an active partner in supporting Sierra Leone’s recovery from severe shocks in the aftermath of the Ebola Virus Disease, and the current COVID-19 pandemic,” said Abdu Muwonge, World Bank Country Manager for Sierra Leone.

“We stand ready to further support the Government of Sierra Leone to transform the economy, make it resilient to shocks while improving the well-being of the Sierra Leonean people.”

Sierra Leone faces major economic and social challenges, including substantial gender gaps, that lead to low human development outcomes say the World Bank.

The country’s growth potential it says, has been constrained by limited spill overs from the mining sector, and poor access by the population to financial services, natural resources (such as, land and minerals), and high-quality education.

According to a statement issued by the World Bank, the reforms supported by this DPO address some of the most critical structural impediments to raising potential output and improving resource allocation in key sectors of the economy and are well-anchored in Sierra Leone’s Medium-term National Development Plan (MTNDP, 2018–2023).

This DPO supports the Government’s efforts to build the foundations for a robust and inclusive economic recovery from the pandemic and promote sustainable development financing of the Budget. In the short term, the operation will help the government close the country’s large financing gap, as it emerges from the pandemic. It supports policy reforms under three pillars: improving natural resources governance through land and mining reforms; enhancing inclusion through reforms to support women’s economic participation, access to quality education and financial inclusion; and ensures sustainable development financing through measures to improve fiscal sustainability and debt transparency and management.

This DPO will address poor governance of the mining and land sectors, limited access to financial services, limited job creation, and the quality of education. As the COVID-19 shock has eroded the country’s fiscal position, this DPO proposes reforms that will help minimize the immediate trade-off between supporting the economy and maintaining fiscal sustainability. It aims to improve fiscal and debt sustainability and address weaknesses in the public procurement process.

By addressing regulatory issues in the land and mining sectors, this DPO is expected to help mitigate climate risks through progressive afforestation of mining sites, protection of forest reserves, improved environmental standards and community involvement in managing the environment.

“This Operation builds on previous development policy engagement in Sierra Leone, while also introducing new elements. It has a direct connection with the previous DPO series (“Productivity and Transparency Support Grant” over the period 2017-2020) and continues two policy reforms –the mineral and mines and lands reforms – whose implementation was delayed by the COVID-19 pandemic,” said Kemoh Mansaray, Senior Economist and Task Team Leader. The financing by this DPO closes a critical fiscal gap essential for maintaining macroeconomic stability during the pandemic.

The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa.

Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.

 

3 Comments

  1. This latest world bank rescue package is a kick in the teeth for all Sierra Leoneans that are concerned about the level of corruption within the one directionless Bio government. This is a Christmas present to Bio and some of his corrupt handpicked government ministers, that will now use this $75 million dollars rescue package to enrich themselves even further . The people of Sierra Leone will in the long run have to pay this debts back .Of course with interest. So our country will always be tied in a mountain of debts. Which will hamper any future developments goals. Because the next government, will come with the best of intentions, only to find out, they can implement any policies that will help our peoples, because they have to service the existing debt from the international financial institutions.

    And if they default on those loans, from the World Bank and other international financial institutions, chances are our country ‘s credit rating will be downgraded further, which will make it harder for a new government to negotiate a financial rescue packages. Suffice to say none of the struggling sectors identified by the World Bank, that is in desperate need of help, due to the effects of Covid19, both mentally, socially and economically, will see any funding going there way. Coming in the wake of the recent suppressed audit report, which was damming and shined a torch in the dark alleys of some of the corrupt practices that Bio and his henchmen are engaged in, this goes to show the World Bank, IMF and other international development partners are helping propagate more corruption in the country.We don’t need any foreign assistance.

    The World Bank and other international financial institutions, cannot continue to throw good money after bad money,with the misguided hope that this Bio government have got the message. The World Bank is now in a unique position to demand transparency and accountability from Bio. The people of Sierra Leone are suffering. The recent Tanker accident in Wellington, is significant, because it tells us one or two things, people are desperate and are ready to risk their lives to make a living. And the lack of opportunities for the people, especially the youths, is so entrenched, they don’t see any way out of the misery Bio and his government have placed them.

  2. Personally. I always compare the World Bank to Credit Bureaus like Equifax or Transunion that determines your credit worthiness. The past APC government misused ( through Massive Corruption) the opportunities of the World Bank and other financial institutions which resulted in the implementation of Austerity Measures. Thankfully the New Direction government seems to be abiding by the conditions of this institution since they returned in 2018.

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