Sierra Leone: Selected Issues

International Monetary Fund

No 2024/322, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper highlights mobilizing mining revenue in Sierra Leone. Sierra Leone is a resource-rich economy, and its mining sector can generate revenue to finance its development goals and ensure debt sustainability. It previously incorporated its mining fiscal regime for industrial miners into mineral license agreements that are difficult to modify. Negotiated tax concessions, combined with acute capacity challenges in revenue administration, are hindering revenue performances and have led to an elevated reliance on fees and trade taxes which increase investor costs, hindering competitiveness. Sierra Leone legislated a new fiscal regime—the Extractive Industries Revenue Act (EIRA)—in 2018 for new investments. Applying the EIRA could significantly boost revenue performance, whilst also ensuring taxes are responsive to changes in economic conditions. Stronger revenue performance will require a stronger revenue administration. Efforts to improve mineral royalty compliance are starting to pay dividends but NRA will need to bolster its resources and widen its skill sets.

Keywords: trade cost; programs in Sierra Leone; spending program; policy option; Policy recommendation; inflation surge; Climate change; Women; Inflation; Food security; Trade facilitation; Sub-Saharan Africa; Global (search for similar items in EconPapers)
Pages: 98
Date: 2024-11-22
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