Sierra Leone: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review—Informational Annex

First Review Under the Extended Credit Facility Arrangement

Abstract

First Review Under the Extended Credit Facility Arrangement

Relations with the Fund

(As of April 30, 2014)

Membership Status: Joined 9/10/62; Article VIII

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Latest Financial Arrangements:

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Projected Payments to Fund2

(SDR million; based on current use of resources and present holdings of SDRs):

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Implementation of HIPC Initiative:

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Safeguards Assessment:

The 2014 safeguards assessment of the Bank of Sierra Leone found that it continues to improve certain elements of the safeguards framework, namely the legal framework and the internal audit function, and financial statements continue to be prepared and audited in accordance with international standards and were published in a timely manner on the BSL website. Continuance in oversight was a concern however, with the Deputy Governor position remaining vacant for an extended period and the expiration of a majority of Board members non-renewable terms in 2014. External audit oversight also needed strengthening and there were delays in the expected recapitalization of the BSL.

Exchange Rate Arrangement:

For customs valuation purposes and for official transactions, the Bank of Sierra Leone (BSL) calculates an official exchange rate every Friday morning as the weighted average of the auction rate, the commercial bank mid-rate, and the bureau mid-rate in the previous week. Commercial banks may buy foreign exchange from and sell it to individual customers and may trade among themselves or with the BSL on a freely negotiable basis. As of May 29, 2014, the BSL mid rate was Le 4,366.87=US$1.

Sierra Leone’s de jure exchange rate regime is classified as floating, with the value of the leone determined by the market. Furthermore, effective November 1, 2008, the de facto exchange rate arrangement has been reclassified to ‘floating’ from a ‘stabilized arrangement’.

With effect December 14, 1995, Sierra Leone has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions. Sierra Leone maintains one multiple currency practice subject to Fund jurisdiction arising from the applied multiple-price Dutch auction system, as there is no formal mechanism in place to prevent spreads of effective rates between winning bids from exceeding 2 percent.

Article IV Consultation:

The Executive Board concluded the 2013 Article IV consultation on October 21, 2013. The next Article IV consultation will be held in accordance with the 2010 decision on consultation cycles.

Technical Assistance:

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Resident Representative:

Mr. Francis Kumah assumed responsibility for the Fund office in Freetown in November 2010.

Joint World Bank-IMF Work Program, 2014–15

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Statistical Issues

As of May 1, 2014

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Sierra Leone: Table of Common Indicators Required for Surveillance May 2014

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Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

1

Formerly PRGF.

2

When a member has overdue financial obligations outstanding for more than three months, the amount will be shown in this section.

3

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

4

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim.

5

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of 2004 that remains outstanding at the time the member qualifies for debt relief.