As Sierra Leone Host Second Creditor Outreach in Africa, Government Commits to Debt Transparency and Management

The Government of Sierra Leone, in collaboration with the International Development Association (IDA) of the World Bank, has held the second Creators Outreach Conference in Africa in Freetown, Sierra Leone on Tuesday, 6th December 2022.

The conference aims to strengthen partnerships among Sierra Leone’s creditors, facilitate information sharing, and understand the country’s developmental goals and the need to address debt-related risks.

In his statement, the Director for Resource Mobilisation of the International Development Association (IDA), Dirk Reinermann, stated that they were able to replenish the IDA20 fund with $ 93 billion. Noting that this fund will allow them to partner with low-income countries like Sierra Leone to invest in Human Capital Development Programmes, Food Security and Climate Change.

Dirk Reinermann Furthered that the Creditor Outreach conference is to discuss sustainable debt financing for countries with the risk of high debt distress like Sierra Leone. He noted that most low-income countries are either in debt distress or at risk of debt distress because of the global economic situation of Covid 19, the war in Ukraine and rising prices of food and energy.

Reinermann also stated that the IDA20 allocations are grant resources that are distributed to IDA countries through the government commitments to implement reforms relating to poverty reduction and improving the overall governance of its citizens. Additionally, he stated that Sierra Leone’s allocation in IDA20 is $400m, with a window for additional private sector resources.

In his opening remarks, Minister of Finance Dennis Vandi stated that the government recognise the challenges faced by less resilient economies in dealing with the aftermath of the Covid-19 pandemic and now the Russia-Ukraine War.

Noting that the impact of these multiple crises has led to sovereigns accumulating unprecedented debt levels which have threatened macroeconomic stability and crowded out the required fiscal space to address poverty and augment social spending for the less privileged and vulnerable groups in our societies.

Notwithstanding this, the Minister informed his audience that Sierra Leone is committed to the Sustainable Development Finance Policy (SDFP) and that in compliance with required Policy Performance Actions (PPAs) under the SDFP, the government will continue to; uphold the zero non-concessional borrowings, published the liabilities of the ten largest SOEs and any guarantees issued by Government on behalf of these SOEs.

“We have also developed a duty waiver and tax policy which we intend to transform into a law to complement existing efforts on domestic revenue mobilization” he added.

In dealing with debt vulnerabilities, Minister Vandi stated that government will continue to conduct annual national Debt Sustainability Analysis, review Medium-Term Debt Strategy (MTDS) as required to address debt portfolio risks and continue to regularly publish and report on debt statistics to deepen debt transparency and accountability.

Financial Secretary, Sahr Lahai Jusu in his presentation stated that as part of the government’s commitment to leverage increased concessional resources from the World Bank and other sources while at the same time improving on our policy and institutional reform capacity, the government has set up an inter-ministerial and technical committee to identify gaps and prescribe concrete actions and policy measures that would significantly boost the country’s CPIA ratings.

“As we are all aware, improving your CPIA correlates with mobilizing increased resources from the World Bank and our development partners to support our recovery efforts and cushion the impact of the impact of multiple crises on the most vulnerable and also support the Government in transforming the human capital landscape in Sierra Leone” he noted.

He expressed appreciation, on behalf of the Government and people of Sierra Leone for the support provided by the Bank towards the socio-economic development of Sierra Leone.

“We remain committed to implementing good economic policies including prudent debt management as well as governance reforms. Our government is committed to free, fair and transparent elections which is the mainstay for peace consolidation, national cohesion, and continued stability” he ended.

This conference attracts development partner organisations, government agencies, Civil Society Organisations and members from the Private sector players.