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afrol News, 20 March - The International Monetary Fund (IMF) has promised US$ 950 million (€ 1,150 million) in debt relief for Sierra Leone. This represents 80 percent of Sierra Leone's total outstanding debt, and debt relief was to be provided immediately. The bulk of assistance from other creditors under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative was to be delivered when Sierra Leone "completes a number of agreed measures, paving the way for reaching a completion point in a few years' time," the IMF said in a statement. The government of Sierra Leone had developed a detailed plan for the use of funds made available through debt relief under the enhanced HIPC Initiative, and for "their transparent and accountable expenditure," the IMF said. Further, the government had adapted its existing accounting framework to identify budget expenditures which are poverty-related, and that sub-component which is financed by HIPC relief. HIPC relief was to be directed primarily at increased expenditures on education, health, and rural development. The promised funds however depend on whether the Sierra Leonean government complies with the complex financial and economic prescriptions of the IMF. "It is not secured only promised," Sierra Leone's Finance Minister Peter Kuyembeh thus today told the BBC. "Under HIPC your activities are very carefully watched. You have to conform to budgetary controls and prudent financial husbandry," he added. The IMF confirms that its full assistance will only be delivered to Sierra Leone when several conditions have been met. These conditions include "continued commitment by Sierra Leone" to the IMF's financial and economic programmes; completion of a poverty reduction strategy paper endorsed by the IMF; and implementation a set of measures in areas of governance, decentralisation, structural reforms, education and health. Last week, the IMF announced that it had unblocked its aid for Sierra Leone saying the country had made "remarkable progress" in advancing the peace process last year. Real GDP was estimated to have risen by 5.4% in 2001 "reflecting a broad-based recovery in many sectors" due to the improved security situation. The aid was made available as part of an IMF poverty reduction programme aimed at boosting economic growth. With a per capita GDP of about US$ 134 in 2000, Sierra Leone's income level is well below the average for sub-Saharan African countries. Even taking into account projected growth rates, and an expected improvement in its terms of trade, Sierra Leone is expected to remain a deeply impoverished country for the foreseeable future. - Sierra Leone has made substantial progress in implementing economic reforms in recent years despite recurrent disruptions caused by the civil war that lasted until mid-1999, the IMF however noted in its assessment. Following a peace agreement reached in mid 1999, the government had adopted "a strong economic rehabilitation and recovery program aimed at sustaining the peace through disarmament, demobilisation, and reintegration programs, promoting macroeconomic stability, and implementing key structural reforms." Against a backdrop of sustained peace, the economic situation had "improved significantly" since mid-1999 as the disarmament and reintegration of ex-combatants had gained momentum and private sector confidence had revived. Economic performance in 2000 had been excellent with real GDP recovering to 3.8 percent growth in 2000 from -8.1 percent in 1999, and price inflation declining sharply to -0.9 percent from 34.1 percent in 1999. The momentum of economic recovery continued in 2001, according to the IMF. Real GDP growth was estimated at 5.4 percent in 2001 slightly above-programmed, and inflation averaged 3 percent compared with the program target of 8 percent. Sierra Leone had also made strong structural reforms in recent years, including tax policy and administration reforms that supported private sector redevelopment and fiscal stability, improved public expenditure management and control, exchange and trade liberalisation to strengthen competitiveness, financial sector modernisation and regulatory reforms, improvements in governance, and more effective delivery of social services.
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