The World Bank Group Board of Executive Directors on Tuesday 5 December approved the Second Inclusive and Sustainable Growth Development Policy Financing (DPF) – a $100 million grant.
According to the Bank, this grant will support the Government of Sierra Leone to improve natural resource governance, enhance inclusiveness, and strengthen accountability and transparency in public finance.
That the DPF is the second in a series of three operations and that it builds on a programmatic reform plan to support sustainable, robust, and inclusive growth in the country.
“Sierra Leone’s capabilities to eradicate extreme poverty and boost shared prosperity rest on sustained macroeconomic stability, robust growth, and a solid enabling environment for leveraging its abundant natural resources. This financing will help address immediate fiscal challenges, while improving overall governance to build resilience and enhance the delivery of services to the people of Sierra Leone,” said Abdu Muwonge, World Bank Country Manager for Sierra Leone.
The Bank noted that Sustainable and inclusive growth has been constrained by the country’s exposure to multi-dimensional exogenous shocks (economic, epidemic, climactic), pervasive governance weaknesses, and limited fiscal space and fiscal risks, which inhibit the ability to promote pro-poor growth through public investment.
They pointed out that Sierra Leone’s economy has been affected by back-to-back crises, which have aggravated inflationary and fiscal pressures, and increased the risks to debt sustainability, expressing hope that the reforms supported by this operation will help address several critical developmental challenges while also helping to meet increased financing needs of the Government.
“Ongoing structural reforms, including those supported by this operation in input markets such as land, labor, and natural resource management will support sustainability and resilience in the economy. The World Bank will continue to support the Government’s commitment to tackle crucial structural reforms to promote inclusive growth,” said Smriti Seth, World Bank Senior Economist and Task Team Leader.
They revealed that the DPF is aligned with the Government’s Medium-Term National Development Plan (MTNDP 2019-2023).
They highlighted that mining reforms supported by the operation will help improve revenue collection, while reforms in auditing and state-owned enterprises’ governance will help control expenditures, easing fiscal pressures and creating space for growth-promoting investment.
This program builds on the strong foundation established by the first operation in this series, which initiated landmark legislative reforms, including promoting decentralized and inclusive land management, strengthening governance and licensing practices in the mining sector, and promoting gender inclusivity in education and employment.