After a protracted civil war that devastated the country, the Government of Sierra Leone has made significant progress in consolidating social and economic security for its people.  The country has now embarked on a transition from post-conflict recovery to broad-based growth and poverty reduction.  GDP grew by 6.4 per cent in 2007. However, inflation continued to rise from 8.3 per cent in December 2006 and 13.8 percent in December 2007 to 15.75 per cent in September 2008.

However, physical infrastructure, including roads, remains devastated and weak. The increase in drug trafficking along the West African coast poses a serious threat to security and could critically undermine the political gains achieved so far.

To address the issue of weak domestic revenues, Sierra Leone’s National Revenue Authority is being strengthened with  measures that should enable it mobilize additional revenues by undertaking field audits, strengthening of tax enforcement, intensification of arrears collection and the stepping up of anti-smuggling activities. Efforts are also being made to introduce a value-added tax and to significantly narrow the scope of import duty and sales tax exemptions.

The Sierra Leonean government  expressed the need for greater flexibility and harmonization of policies and procedures in Bank operations, especially in cases where the Bank co-financed particular operations with other donors.

Bank Group Programme

In the last quarter of 2008, the Bank Group’s portfolio in Sierra Leone comprised 14 ongoing interventions with total commitments amounting to UA 103.8 million. Of the amount UA 31.0 million had been disbursed, creating a disbursement rate of 29.9 per cent. The portfolio was in diverse sectors and include projects and studies in agriculture, transport, fisheries, and water and sanitation. It also had social, financial and multi-sector projects.

The  Sierra Leonean government was, by mid-2008, still completing a Poverty Reduction Strategy Paper (PRSP II) for the period 2008-2010. The main priorities outlined in the paper were sustaining economic stability and avoiding collapses in economic growth, closing infrastructure gaps, enabling private sector growth, the management of natural resources, and human development and service delivery.

The new government has made the energy sector its number one priority. DfID as well as the Italian and Sierra Leonean governments had provided EUR 7 million, EUR 12 million and EUR 5 million respectively towards the EUR30 million required for the completion of the Bumbuna Hydroelectric Project. The AfDB in 2008 approved UA 10.3 million supplemental loan  for the project.

The African Development Fund (ADF-XI) allocation to Sierra Leone for the period 2008-2010 is UA 72.47 million. UA 29.71 million of the amount  will be from the ADF while UA42.76 million will be under the Bank’s Fragile States Facility. Operations to be financed during 2008-2010 period include Bumbuna Hydroelectric Project earmarked for a supplemental loan (2008, UA 10.3 million), Lungi-Port Loko Road (2009, UA 25.26 million), Budget Support (ERRP IV 2009, UA 10 million), and the Water Supply and Sanitation Project (2010, UA 26.91 million.) The early disbursement of budget support was seen as critical to sustaining the gains made by the government in the implementation of its poverty reduction agenda.

With the opening of a country office in Sierra Leone, the implementation of Bank-funded projects and programmes has improved. Procurement and disbursement problems are being resolved at a faster rate than before. Disbursement continues to rise although their remains much scope for improvement. Country policy dialogue, coordination and cooperation with other development partners, especially the EU, DFID and the World Bank, have also improved.