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Tuesday October 22, 2013 MYT 8:02:32 AM
Tuesday October 22, 2013 MYT 8:03:34 AM
The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013. REUTERS/Yuri Gripas
WASHINGTON (Reuters) - The International Monetary Fund said on Monday it had approved Sierra Leone for a $96 million (59.5 million pounds), three-year enhanced credit facility to support economic development and poverty reduction in the West African nation.
"Sierra Leone has achieved strong macroeconomic gains," said IMF Deputy Managing Director Min Zhu, citing robust growth, higher iron production, plus falling inflation thanks to tight monetary policy, a stable exchange rate and lower food prices.
"The medium-term outlook is favourable, with policy focused on achieving strong broad-based growth, further disinflation, and an improved external position," he said.
Approval by the IMF executive board enables the immediate disbursement of around $13.7 million under the facility.
Sierra Leone, which was torn apart by a 1991-2002 war, reported real growth of 15.2 percent last year as iron ore production jumped to 6.6 million tons, up from 137,000 tons in 2011. Growth excluding iron production was estimated at 5.3 percent versus 5.8 percent in 2011.
While praising the progress so far, the IMF noted that the country of roughly six million people faced challenges, and urged the government to step up efforts to strengthen public financial management and to boost tax collection.
"Poverty and unemployment are still high, and access to public and social services is limited. In addition, growth prospects are hindered by numerous obstacles, including insufficient power supply and road networks, and limited access to financial services," the IMF said in a statement. "Sierra Leone needs more durable poverty reduction and growth efforts."
The country aims to raise non-iron ore growth to 7 percent by 2017, lower inflation to 5.4 percent in 2017 from 12 percent in 2012, and lift foreign exchange reserves to four months' worth of non-iron ore related imports.
(Reporting by Alister Bull and Paul Simao)
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