Sierra Leone - Fifth Governance Reform and Growth Credit

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The objectives of the Fifth Governance Reform and Growth Credit Program for Sierra Leone are to (i) improve the allocation and efficiency of public spending to support poverty reduction; (ii) strengthen domestic resource mobilization and management; and (iii) increase provision of electricity. This program document a second Poverty Reduction Support Operation (PRSO) in a series of three, the Fifth Governance Reform and Growth Credit (GRGC-5) in the amount of SDR 15.5 million (US$24 million equivalent) to the Republic of Sierra Leone. The amount of the credit is larger than originally envisaged. This is partly to help offset increased costs to the budget on account of rising international fuel prices which have increased the fuel subsidy and also because the Bank is planning to shift its disbursement point through this operation to early in the Sierra Leone financial year. The GRGC-5 builds on a series of three previous Governance Reform and Growth (GRG) operations and its predecessor, the GRGC-4 which also provided support to PRSP-1 and PRSP-2. PRSP-2 identifies four key priorities: (a) provision of a reliable power supply to the country through extensive reforms and investments in the energy sector; (b) increase productivity and output in agriculture and fisheries through an array of policies including provision of research, extension, marketing and technical services to promote diversification and private sector participation; (c) develop a national transportation network to promote investment and support higher economic growth; and (d) increase provision of social services to improve human development and accelerate poverty reduction. Achievement of the strategic priorities in PRSP-2 is to be through efforts directed to four core areas or principles. These are a commitment to promoting peace, the rule of law, and good governance particularly through improving national security, reforming the public sector, enforcing the National Anti-Corruption Strategy and improving access to justice while protecting human rights; the second area is ensuring macroeconomic stability through a focus on increased domestic resource mobilization, enhanced budget and public expenditure management and fiscal decentralization; financial sector and private sector development through strengthening of the respective legal and regulatory regimes, removal of barriers to investment, promotion of business support services and improving access to finance are identified as critical in this regard; and finally improved natural resource management with an emphasize on mining, tourism and land management in order to ensure that the benefits of such natural resources are widely and equitably shared for the benefit of the population.