The Executive Board of the International Monetary Fund (IMF) today approved the disbursement of SDR 103.7 million (US$143 million or 50 percent of quota) under the Rapid Credit Facility (RCF) to Sierra Leone to help meet the urgent balance of payments and fiscal needs stemming from the COVID‑19 pandemic.
The COVID-19 pandemic is severely impacting Sierra Leone’s economy. A sharp contraction in external demand, and vital steps to contain the spread of the virus, are disrupting domestic activity and important mineral exports.
The authorities have taken swift action to combat the effects of the crisis, increasing health spending and social protection for the most vulnerable, as well as steps to support the private sector and secure critical supplies to address food insecurity. These substantial needs, together with the already tight financing situation, underline the importance of Fund support, and additional support from the international community.
In the context of their broader commitment to strengthen governance, the authorities are taking steps to ensure transparency and accountability in executing pandemic-related measures.
IMF staff are working closely with the authorities to provide technical and policy advice to help Sierra Leone as it battles the pandemic.
At the conclusion of the Board discussion, Mr. Tao Zhang, Deputy Managing Director and Acting Chair, made the following statement:
“The COVID‑19 pandemic puts Sierra Leone’s population at risk and is a serious blow to the economy, which has just started to recover. The number of COVID-19 cases is increasing rapidly, threatening the fragile health system. The drop in external demand and essential measures to contain the spread of the virus are sharply curtailing economic activity.
“The authorities are taking decisive actions to mitigate the health and socio-economic impact of the pandemic. In collaboration with development partners, they are scaling up urgent health spending and introducing measures, including boosting social safety nets and ensuring access to credit for affected businesses.
“Beyond the crisis, the authorities remain committed to their National Development Plan and their reform program supported under the Extended Credit Facility. They are taking steps to maintain macroeconomic stability during the crisis and are continuing to strengthen governance, including by seeking IMF technical assistance to implement accountability structures for emergency spending. Once the crisis abates, resuming fiscal consolidation and accelerating structural reform will be important. The IMF stands ready to assist Sierra Leone as it fights the pandemic and to support its economic reforms going forward.
“The shock has generated a large balance of payments need. Emergency financing under the Rapid Credit Facility will help meet this financing gap and create room for pandemic-related spending. With significant downside risks and a tight financing situation threatening to reverse Sierra Leone’s progress toward the Sustainable Development Goals, additional grant support from the international community is urgently needed.”