Identifier
Created
Classification
Origin
09FREETOWN136
2009-04-14 15:43:00
CONFIDENTIAL
Embassy Freetown
Cable title:  

IMF REPS CONCERNED BUT PATIENT REGARDING SIERRA

Tags:  ECON EAID EFIN SL 
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VZCZCXRO9498
RR RUEHPA
DE RUEHFN #0136 1041543
ZNY CCCCC ZZH
R 141543Z APR 09
FM AMEMBASSY FREETOWN
TO RUEHC/SECSTATE WASHDC 2579
INFO RUEHZK/ECOWAS COLLECTIVE
C O N F I D E N T I A L FREETOWN 000136 

SIPDIS

DEPARTMENT FOR AF/W (JHUNTER/ESPRUILL)

E.O. 12958: DECL: 04/14/2019
TAGS: ECON EAID EFIN SL
SUBJECT: IMF REPS CONCERNED BUT PATIENT REGARDING SIERRA
LEONE ECONOMY

REF: FREETOWN 79

Classified By: Ambassador June Carter Perry for reasons 1.4 (b/d)

C O N F I D E N T I A L FREETOWN 000136

SIPDIS

DEPARTMENT FOR AF/W (JHUNTER/ESPRUILL)

E.O. 12958: DECL: 04/14/2019
TAGS: ECON EAID EFIN SL
SUBJECT: IMF REPS CONCERNED BUT PATIENT REGARDING SIERRA
LEONE ECONOMY

REF: FREETOWN 79

Classified By: Ambassador June Carter Perry for reasons 1.4 (b/d)


1. (C) Summary: On April 6, Ambassador met with IMF
representatives to discuss their private views on GoSL
performance since December 2008. Resident Representative
Alvin Hilaire, Chief of Mission Norbert Toe and incoming
Chief of Mission Jan Mikkelsen, discussed their
disappointment that promises made during the December review,
including the implementation of a Goods and Services Tax
(GST),have not been kept. They also discussed the new
Poverty Reduction Strategy Paper (PRSP),set for presentation
by President Koroma on April 22. Despite their concerns,
including how Sierra Leone will absorb the impact of the
global economic crisis, all stated that, as a fragile state,
the country deserves patience and leeway from international
financial institutions as it implements policy
recommendations. End Summary.


2. (C) The purpose of the April 6 meeting was to introduce
the Ambassador to Jan Mikkelsen. Norbert Toe and Alvin
Hilaire are both out-going, moving to Namibia and Washington
respectively. The group spent a week conducting a review on
progress made since their last substantive visit in December
2008, in which an additional USD 15 million was added to the
agreement to help them reach their goals and address the food
and fuel crisis in the country at that time. The team stated
their disappointment regarding the lack of progress,
indicating that government revenues fell short of targets,
and that donors also did not provide promised funds in a
timely way.


3. (C) The contingent particularly focused on the GoSL's
failure to implement the promised GST. In December, the
government was given until April to put the necessary systems
in place, but they discovered on this trip that the bill to
create the GST has yet to even be tabled in Parliament. They
noted that while inertia is unsurprising in a fragile state
like Sierra Leone, the lack of progress is still frustrating.
On the positive side, however, they noted the cabinet
reshuffle (reftel) as hope for the future. They are
particularly pleased with the changes in the Ministries of
Finance and Mineral Resources (Note: Ambassador has a meeting
scheduled with the new Minister of Finance on April 15. End
note.).


4. (C) The team informed Ambassador that the new PRSP will be
presented on April 22 by the President. Its completion is a
positive, if delayed, development though the team said that
the draft they saw was concerningly vague. It touches on the
key themes and areas of interest, but does not identify what
they want to achieve or how they plan to achieve it.
Ambassador said that this is consistent with our own
bilateral discussions on the MCC - priorities, such as
curbing corruption and boosting social indicators are
acknowledged, but the GoSL seems very uncertain about
concrete steps that can be taken to meet objectives.


5. (C) The team stated that a Consultative Group for the PRSP
will likely be held in London in October. The current
financing gap for the play is USD 850 million over 3 years,
but this figure could increase due to the global financial
crisis.


6. (C) Comment: Though disappointed by the seemingly limited
commitment on the part of the GoSL to keep promises and make
necessary policy changes, the completion of the PRSP and
changing of the guard at the Ministry of Finance is cause for
some optimism. Still, the IMF approach to Sierra Leone will
likely continue to be one of watchful caution until the
Koroma administration goes further to prove that it can
implement systemic changes and account effectively for donor
funds. End Comment.
PERRY