The World Bank has approved an $80 million financing package to assist Sierra Leone in restoring macro-fiscal stability and enhancing economic resilience. This financial support consists of a $60 million International Development Association (IDA) grant for budgetary purposes and an additional $20 million for a Catastrophe Deferred Drawdown Option (Cat DDO), which will be accessible to the government if a natural disaster occurs.
Over the past decade, Sierra Leone has encountered significant economic and climate challenges, including the Ebola crisis, natural disasters, and the COVID-19 pandemic. These events, combined with policy missteps, have hindered growth and intensified macroeconomic imbalances. The newly approved financing seeks to tackle these issues through a comprehensive reform program.
“The approval of this financing package is a testament to the strong partnership between the World Bank and the Government of Sierra Leone. We are committed to supporting Sierra Leone in its journey towards economic stability and resilience, and this operation will help the country implement critical reforms to improve fiscal management, enhance access to finance and reliable energy, and boost climate and disaster resilience,” said Abdu Muwonge, World Bank Country Manager for Sierra Leone. “By addressing these key areas, the World Bank aims to support the Government in achieving sustainable growth and reducing poverty.”
This initiative is part of a series titled "Sierra Leone Macro Stability and Resilience Development Policy Operation with a Catastrophe Deferred Drawdown Option." It represents the first step in a three-part program designed to aid Sierra Leone's government in restoring macroeconomic stability while establishing foundations for sustainable economic growth. The operation supports reforms aimed at improving domestic revenue mobilization, enforcing spending discipline, safeguarding financial sector stability for private sector access to finance, enhancing private sector participation in energy markets for better performance by Electricity Distribution and Supply Authority (EDSA), as well as building climate change adaptation measures.
“The reforms supported by this operation are crucial for restoring macroeconomic stability and building resilience against future shocks. We look forward to working closely with the Government to ensure successful implementation of these reforms,” stated Smriti Seth (Senior Economist) along with Francis Samson Nkoka (Senior Disaster Risk Management Specialist), Co-Task Team Leaders.
This operation aligns closely with priorities outlined in Sierra Leone’s Medium-term National Development Plan (MTNDP 2024-2030) while building on previous efforts from Inclusive Sustainable Growth Development Policy Financing series.