March 17, 2021
By: James Kamara-Manneh
The Executive Board of the International Monetary Fund (IMF) has on the 15th March, 2021 approved the disbursement of SDR 35.26 million (US$50.37 million or 17 percent of quota) to the President Bio SLPP government. The money is meant to address the continuing impact of the Covid 19 pandemic under the Rapid Credit Facility (RCF).
Finance Minister Jacob Jusu Saffa had intoned that their sound economic performance is a winner of international goodwill and a testament to the confidence reposed in the Bio government by international development partners.
Like previous disbursement from the IMF, this money will help the government and people of Sierra Leone to meet the urgent balance of payments and fiscal needs stemming from the deep and persistent impact of the pandemic.
IMF continues to applaud the Government’s quick and decisive actions to contain COVID-19 by preventing a larger outbreak that has saved lives. Also, IMF recognizes the economic cost and negative effects of the virus that has disrupted the transportation of goods within the country, weakened exports and the knock on effect on the service providing sector.
The IMF release announcing this disbursement notes that the governance fiscal performance in the area where 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.
It adds: “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 release also notes 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.
In an interview with 98.1 radio democracy, the Financial Secretary from the Ministry of Finance, Sahr Jusu expressed his appreciation on behalf of the Government of Sierra Leone for such support from IMF. He disclosed that the money has been paid directly into the Bank of Sierra Leone. When asked whether the money donated will only be used towards Covid-19 fight, he said it will not go specifically into the Covid fund because the government has lots of other programs to respond to.
He mentioned about the quick economic response program of the government which is geared towards seeing government articulated programs, such as the ones at the health sectors, agricultural, electricity projects, among other things.
“All of these need financing, therefore the funds will be used judiciously for the benefits of the nation, Sahr Jusu said.
Mr. Jusu said this fund will be part of government budgeted activities to actualize their developmental aim for its citizen, and will also prioritize the fight against Covid-19. He said this support from IMF means a lot for the country and that are happy for such recognition.
“This is the first time the IMF board has commended the government of Sierra Leone, as all 24 members of the board were unanimous in this decision. This shows that the government is on track despite the challenges in economic management,” the Finance Secretary said.
He said the government is been admired by world leaders and other organizations around and the country is among those that have performED exceptionally well in all areas of development and that foreigners do come around to observe the government on different disciplines.
He said in 2020, the government spent over four hundred billion Leones on Covid as it was not budgeted for 2020-21. The government continues to finance the flagship program on Free and Quality Education and about fifty-one billion Leones was paid into all schools account.
Mr. Jusu said as a novelty in Sierra Leone the government was able to provide health Insurance scheme to all health workers and increment on their salaries. He called on all to support the government in their developmental strides.
Mr. Tao Zhang, IMF Deputy Managing Director and Acting Chair, acknowledged that 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.
He added that: 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.”
IMF Director is convinced that: “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.”