World Bank Board Approves New Grant to Strengthen Sierra Leone’s Reform Agenda on Governance and Economic Growth

WASHINGTON, December 14, 2006 – The Board of Directors of the World Bank has today approved an International Development Association (IDA) grant called the ‘Programmatic Governance Reform and Growth Grant’ of about US$10 million for Sierra Leone. The grant is designed to provide quick disbursing support to the Government’s 2006 budget in a single tranche.

This programmatic approach to aid dispensation is the first in a series that supports the Sierra Leone Poverty Reduction Strategy, following four Economic Rehabilitation and Recovery projects in the country. The grant complements similar support provided by the African Development Bank (AfDB), the UK Department for International Development (DfID) and the European Commission (EC).

The proposed Grant will provide critical resources to support elements of the Government Poverty Reduction Strategy in a manner that consolidates and deepens the agenda set by the Economic Rehabilitation and Recovery series including progress made in governance, decentralization of government, management of public resources and private sector-led economic growth.

The grant will contribute to economic recovery and growth by: (1) providing foreign exchange resources for imports of essential commodities, (2) providing financial resources to the Government budget to finance priority public expenditures, (3) supporting reforms to attract private investment and (4) contributing to maintaining macroeconomic stability and low inflation, thus helping to close the financing gap in 2006.

The policy areas to be supported by the proposed Grant include the maintenance of a conducive macroeconomic framework, deepening of Government fiduciary and financial regulations, procurement reform, improved budget execution, public service reform, decentralization, private sector regulation, trade reform, financial sector regulation, public enterprise reform, mining services and the fiscal regime for mining.

The choice of policy areas and the proposed triggers were informed by a series of consultations with stakeholder ministries and agencies as well as the other budget support donors. These consultations were arranged through the Ministry of Finance during the pre-appraisal and appraisal stages of the grant preparation.

PROJECT DESCRIPTION: The grant will provide critical resources to support elements of the Government’s Poverty Reduction Strategy in a manner that consolidates and deepens the agenda set by the Economic Rehabilitation and Recovery series including progress made in governance, decentralization of government, management of public resources and private sector-led economic growth. The grant will contribute to economic recovery and growth by providing foreign exchange resources for imports of essential commodities, by providing financial resources to the Government budget to finance priority public expenditures and by supporting reforms to attract private investment.

Link to Sierra Leone - Sierra Leone: Programmatic Governance Reform and Growth Grant