WASHINGTON, January 26, 2011 – The Board of Executive Directors of the World Bank has today approved the fifth Governance Reform and Growth Credit (GRGC) for Sierra Leone of US$ 24 million as a one-tranche budget support disbursement. This will support the Government of Sierra Leone’s overall reform program towards economic growth and structural reforms, which is being supported under the Multi-Donor Budget Support (MDBS) arrangement.
This round of budget support from the World Bank is specifically meant to help sustain the gains made by the Government in preserving and expanding budget allocations for poverty reduction; steps taken to improve the efficiency of such spending; strengthening of domestic revenue mobilization measures; and supporting reforms in the energy sector.
“A significant highlight of this year’s support is the major policy steps taken to reform the important energy sector, for which I commend the government”, said World Bank Country Manager for Sierra Leone, Vijay Pillai. “This lays the foundation for building a vibrant energy sector, which is so crucial for growth and poverty reduction in Sierra Leone. I would strongly encourage the government to see through the full implementation of these reforms”.
The fifth Governance Reform and Growth Credit (GRGC) is meant for the fiscal years of 2011 and 2012. In this way, the World Bank has taken a significant step forward in improving the predictability of budget support by moving it to the start of the fiscal year. Support under the MDBS arrangement is provided on the basis of the government maintaining macroeconomic stability, fiscal and fiduciary discipline, and continuing to undertake reforms which would lead to growth and poverty reduction.
The Bank support recognizes the need for government to continue prudent economic management by managing the likely wage pressures and continued due diligence in the implementation of infrastructure projects – more so at a time when Sierra Leone could be adversely affected by the impacts of a potential global economic downturn.