Document of The World Bank

Report No: ICR00004121

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-D0260IDA-D0270 TF-15359)

ON A

DEVELOPMENT POLICY GRANT IN THE AMOUNT OF SDR 20.6 MILLION (US$30 MILLION EQUIVALENT) INCLUDING SDR 6.9 MILLION (US$10 MILLION

EQUIVALENT) IN CRISIS RESPONSE WINDOW RESOURCES

AND

SUPPLEMENTAL FINANCING IN THE AMOUNT OF SDR 21.5 MILLION (US$30 MILLION EQUIVALENT)

TO

THE REPUBLIC OF SIERRA LEONE

FOR

THE EMERGENCY ECONOMIC AND FISCAL SUPPORT OPERATION

June 26, 2017

Macroeconomics and Fiscal Management Global Practice AFCW1 Country Department Africa Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective May 31, 2017)

Currency Unit = Leone

Le 1.00 = US$ 0.000133 US$ 1.00 = Le 7,520.5

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AfDB African Development Bank BDO Binder Dijker Otte-Fiduciary Agent BSL Bank of Sierra Leone CPI Consumer Price Index CRW Crisis Response Window DPF Development Policy Financing DPO Development Policy Operation DSA Debt Sustainability Assessment ECF Extended Credit Facility EEFSO Emergency Economic and Fiscal Support Operation EU European Union EVD Ebola virus disease GDP Gross Domestic Product HSDSSP Health Services Delivery and System Support Project IHPAU Integrated Health Project Administrative Unit IDA International Development Association IMF International Monetary Fund KPMG Klynveld Peat Marwick Goerdeler-Accounting firm MDAs Ministries, Departments and Agencies MDBS Multi-Donor Budget Support MoFED Ministry of Finance and Economic Development MoH Ministry of Health NERC National Ebola Response Center ONS Office of National Security PAF Program Assessment Framework PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PRSP Poverty Reduction Strategy Paper RCB Rokel Commercial Bank (Sierra Leone) Limited RCH Reproductive and Child Health Project SDR Special Drawing Rights SLCB Sierra Leone Commercial Bank Limited TA Technical Assistance TSA Treasury Single Account UNDP United Nations Development Program

UNFPA United Nations Food and Population Agency USAID United States Agency for International Development WFP World Food Program WHO World Health Organization

Vice President: Makhtar Diop

Country Director: Henry Kerali

Senior Global Practice Director: C. Felipe Jaramillo

Practice Manager: Seynabou Sakho

Program Team Leader: Cyrus Talati

ICR Team Leader: Mamadou Ndione

ICR Primary Author: Richard Carroll

REPUBLIC OF SIERRA LEONE

Emergency Economic and Fiscal Support Operation (EEFSO)-P146726 and Supplemental Financing for EEFSO-P157333

CONTENTS

Data Sheet A. Basic Information ........................................................................................................... ii B. Key Dates – P146726 ..................................................................................................... ii C . Ratings Summary ......................................................................................................... iii D.Sector and Theme Codes................................................................................................ iii E. Bank Staff ...................................................................................................................... iv F. Results Framework Analysis .......................................................................................... v G. Ratings of Program Performance in ISRs .................................................................... vii H. Restructuring (if any) ................................................................................................... vii 1. Program Context, Development Objectives and Design 1 

2. Key Factors Affecting Implementation and Outcomes 8 

3. Assessment of Outcomes 15 

4. Assessment of Risk to Development Outcome 20 

5. Assessment of Bank and Borrower Performance 20 

6. Lessons Learned 23 

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners 24 

Annex 1 Bank Lending and Implementation Support/Supervision Processes 25 

Annex 2. Beneficiary Survey Results 27 

Annex 3. Stakeholder Workshop Report and Results 28 

Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR 29 

Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders 35 

Annex 6. List of Supporting Documents 36 

Annex 7: Additional Details of the Ebola Crisis Response 38 

Annex 8: Letter from President of Sierra Leone to World Bank President Jim Kim 43 

Annex 9: Sierra Leone: Selected Economic indicators 44 

MAP 46 

A. Basic Information

Country: Sierra Leone Program Name:

Sierra Leone - Emergency Economic and Fiscal Support Operation

Program ID: P146726 L/C/TF Number(s): IDA-D0260, IDA-D0270, TF-15359

ICR Date: 06/26/2017 ICR Type: Core ICR

Lending Instrument: DPL Borrower: GOVERNMENT OF SIERRA LEONE

Original Total Commitment:

USD 30.00M (SDR20.6M)

Disbursed Amount: USD 29.70M (SDR20.6M)

Revised Amount: NA

Implementing Agencies: Ministry of Finance and Economic Development (MoFED)

Cofinanciers and Other External Partners: N.A.

Country: Sierra Leone Program Name:

Sierra Leone - Emergency Economic and Fiscal Support Operation-Supplemental Financing

Program ID: P157333 L/C/TF Number(s): IDA-D1000

ICR Date: 06/26/2017 ICR Type: Core ICR

Lending Instrument: DPL Borrower: GOVERNMENT OF SIERRA LEONE

Original Total Commitment:

USD 30.00M (SDR21.5)

Disbursed Amount: USD 30.00M (SDR21.5M)

Revised Amount: NA

Implementing Agencies: Ministry of Finance and Economic Development (MoFED)

Cofinanciers and Other External Partners: N.A. B. Key Dates – P146726

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: Not applicable Effectiveness: 12/18/2014

Appraisal: 11/25/2014 Restructuring(s):

Approval: 12/17/2014 Mid-term Review:

Closing: 12/31/2015 06/30/2016

B. Key Dates – P157333 (Supplemental)

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: NA Effectiveness: 12/17/2015

Appraisal: NA Restructuring(s):

Approval: 12/08/2015 Mid-term Review:

Closing: 06/30/2016 06/30/2016 C . Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Significant

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies:

Moderately Satisfactory

Overall Bank Performance:

Moderately Satisfactory Overall Borrower Performance:

Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments (if

any) Rating:

Potential Problem Program at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Program at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D.Sector and Theme Codes Original Actual

Major Sector/Sector

Public Administration

Central Government (Central Agencies) 14 14

Financial Sector

Banking Institutions 29 29

Health

Health 7 21

Energy and Extractives

Mining 29 21

Social Protection

Social Protection 21 15

Major Theme/Theme/Sub Theme

Economic Policy

Fiscal Policy 17 17

Fiscal sustainability 17 17

Public Expenditure Policy 2 2

Tax policy 2 2

Macro-financial policies 2 2

External Finance 2 2

Macroeconomic Resilience 2 2

Monetary and Credit Policies 2 2

Public Sector Management

Public Administration 29 29

Transparency, Accountability and Good Governance 29 29

Public Finance Management 15 15

Debt Management 15 15

Public Expenditure Management 15 15

Social Development and Protection

Social Protection 14 14

Social Safety Nets 14 14

E. Bank Staff Positions At ICR At Approval

Vice President: Makhtar Diop Makhtar Diop

Country Director: Henry Kerali Yusupha Crookes

Senior Global Practice Director

Carlos Felipe Jaramillo John Panzer

Practice Manager/Manager: Seynabou Sakho Mark Roland Thomas

Program Team Leader: Mamadou Ndione Cyrus Talati

ICR Team Leader: Mamadou Ndione

ICR Primary Author: Richard Carroll F. Results Framework Analysis Program Development Objectives (from Program Document) To ensure that the Government’s Ebola Response Plan can be executed through adequate budgeting and transparent use of resources, consistent with strengthening longer-term fiscal management and transparency. Revised Program Development Objectives Not Applicable (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at Completion or Target Years

Indicator 1: Clinical and non-clinical workers paid through the formal hazard payment system, disaggregated by gender (%)

Value (quantitative or Qualitative)

0% 80% 100%

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Target achieved and exceeded. All payments were made electronically either by mobile phone or to bank accounts. (MoFED)

Indicator 2: Audits of hazard payments by the Internal Audit Department of MOFED (Number) Value (quantitative or Qualitative)

0 Quarterly audits One quarterly and one annual

audit completed

Date achieved 11/2014 12/31/2015 06/30/2016

Comments (incl. % achievement)

Target mostly achieved. The internal audit department (IAD) carried out two annual audits covering the period from September 2014 to December 2014 and December 2014 to December 2015. The department also carried out a separate audit of ineligible workers claiming hazard pay (April 2016). (IAD of MoFED). The Auditor General carried out two audits that are posted to the Audit Service’s website.

Indicator 3: Aggregate report from banks including opening and closing balances and summary of receipts and payments (Monthly)

Value (quantitative or Qualitative)

0

Regular bi-annual reports logged by the Accountant General (AG)

AG is producing quarterly reports.

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Target achieved. This indicator is linked to the effort to institute a Treasury Single Account. (AG). As of December 2016, several MDAs still hold non-transparent and inaccessible bank accounts with potential idle funds (IMF).

Indicator 4: Estimate of fiscal contingent liability (Yes /No) Value (quantitative or Qualitative)

No Yes Yes

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Target achieved. A diagnostic of the two banks in question (Rokel Commercial Bank) and Sierra Leone Commercial Bank) has been done. The report shows that NPLs have increased significantly, exceeding 75% for both banks

Indicator 5: Supplementary Budget for 2014 sanctioned by Legislature Value (quantitative or Qualitative)

No Yes Yes

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Target achieved. The supplementary budget for 2014 (to deal with the Ebola crisis) was sanctioned by the Legislature. (MoFED)

Indicator 6: Budget execution rate (% of appropriation) Value (quantitative or Qualitative)

75.4% 90% 111.1%

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Not possible to determine whether target achieved. The actual budget expenditure for 2014 was a little higher than the 10 percent margin. The reported baseline does not reflect the chronic practice of budget over-execution.

Indicator 7: Mineral Lease Agreements published on the internet or otherwise (Percentage of total Lease Agreements on record)

Value (quantitative or Qualitative)

0% 90% 100%

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. % achievement)

Target achieved through 2012. The 2014 Performance Assessment Framework (PAF) reported this target achieved (for 2013). It was reported during the ICR mission that there have been no new mining leases signed since 2012. (Ministry of Mines)

Indicator 8: Coverage of 2013 revenues from extractive industries publicly reported (%) Value (quantitative or Qualitative)

0% 90% 100%

Date achieved 11/2014 12/31/2015 06/30/2016 Comments (incl. %

Target achieved. The 2014 PAF reported this target achieved for 2014. (MoFED)

achievement)

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

G. Ratings of Program Performance in ISRs

No. Date ISR Archived

DO IP Actual Disbursements

(USD millions) 1 07/08/2016 Satisfactory Satisfactory 29.93

H. Restructuring (if any) Not Applicable

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1. Program Context, Development Objectives and Design 1. This Implementation Completion and Results Report (ICRR) assesses the results of the stand-alone Emergency Economic and Fiscal Support Operation (EEFSO) Development Policy Financing and its supplemental operation to the Republic of Sierra Leone. The EEFSO of US$30 million was disbursed on December 18, 2014. A supplemental operation was prepared to address a financing gap owing to the 2014-15 Ebola crisis and the decline in the price of iron ore, the country’s main export commodity and was disbursed on December 17, 2015. A standard programmatic policy-based budget support operation was initially planned, as had been customary in recent years. However, in the midst of preparation of the program, an outbreak of the deadly Ebola Virus Disease (EVD) required that the operation be adapted also to help in the national campaign against Ebola, and it became a standalone Development Policy Operation (DPO).

1.1 Context at Appraisal 2. Sierra Leone is a relatively poor west African country with weak social indicators. According to the 2015 census, the population of Sierra Leone is approximately 7.1 million, with an average annual increase of 3.3 percent between 2004 and 2015, higher than the 1.8 percent growth rate observed between 1985 and 2004, though this period included the civil war (1991–2002). Currently, 45.8 percent of the population is under the age of 15 and near 75 percent below the age of 35. The 2013 Demographic and Health Survey (DHS) recorded an average of 4.9 births per woman, though for the poorest women, the numbers were substantially higher with 6.1 births per woman for those in the lowest wealth quintile. Pre-Ebola Context

3. Sierra Leone enjoyed a steady increase in income per capita from 2002 to 2014, its longest period since independence in 1961. Per capita GDP went from stagnating in the period from independence to the civil war and contracting by 3.4 percent on average per year between 1991 and 2001 (civil war) to increasing by 5.9 percent on average per year from 2002 to 2014. In nominal terms, income per capita quintupled in about a decade and half, rising from US$157 in 2000 to US$794 in 2014. As a result, the national poverty rate declined to 53 percent in 2011, from 66 percent in 2003. Inequality was reduced over the period as poorer districts experienced relatively higher growth rates.

4. Positive developments in the mineral, mainly in the iron ore sector, generated high expectations about economic opportunities. The national development plan was the Agenda for Prosperity 2013-18, which was the third Poverty Reduction Strategy Paper (PRSP 3). PRSP 3 set out a bold vision for Sierra Leone to be an inclusive, green, middle-income country by 2035. Implementation of this strategy depended on addressing several key challenges, including the improved management of wealth that the extractives sector development could generate, beginning with transparency regarding revenues (which the EEFSO targeted). This transparency became especially important with production and export of iron ore (along with large inflows of Foreign Direct Investment) contributing to GDP growth rates averaging in double digits during 2010-2013. Preparation was consistent with the World Bank’s commitment to annual budget support.

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5. Despite the good overall progress, Sierra Leone’s economic and social systems remained very weak and highly vulnerable to exogenous shocks. Because of high population growth, the number of poor remained steady keeping more than half of the population below the national poverty line. Public service delivery remained weak overall, particularly for rural inhabitants. National health data place Sierra Leone’s health care system near the bottom of global rankings.1 The civil war (1991-2002) interrupted education for many, leading to some of the highest percentages of the working age population with no education in sub-Saharan Africa—56 percent of adults over the age of 15 years, reported that they had never attended school.

Ebola crisis 6. The progress on poverty reduction was suddenly reversed in 2014 with the advent of the Ebola epidemic and the sharp decline in iron ore prices. In May 2014, the West Africa,2 EVD epidemic reached Sierra Leone. The virus3 had spread from neighboring Guinea into the district of Kailahun, then to Kenema district, and eventually to all 13 districts and the capital by the peak of the crisis. Quarantines were imposed to stem the spread of the Ebola virus in these districts and subsequently three other productive agricultural districts which led to widespread disruption of agriculture. The full effect on agricultural production was evident in 2015. Closure of markets led to sporadic localized food shortages and price spikes. The World Food Program (WFP), continuously active in Sierra Leone (mainly because of the fact that 2.5 million persons annually faced the risk of insufficient food) carried out an expanded program of food delivery in response to the Ebola epidemic. By the time the Ebola crisis was declared over, of the 14,089 Ebola cases in Sierra Leone, 3,955 people had died (World Health Organization-WHO). 7. The Government’s National Ebola Response Plan was revised in early October 2014, with the goal to address and reverse the spread of the disease within a ninety-day period. The plan had four specific strategic objectives: (a) achieve isolation of at least 40 percent of infected people in a period of 30 days, from the existing rates of 17-25 percent; (b) increase isolation of infected persons to 75 percent of cases and achieve 75 percent safe burial within a period of 60 days; (c) achieve 100 percent isolation of both cases of infected persons and safe burial within 90 days; and (d) achieve areas clear of Ebola, including the capital Freetown and a declining case rate within 90 days. The plan included Ebola case management, surveillance, social mobilization, child protection, communications and public relations, operational and logistical support for field teams and accountability, gender, and psychosocial support.

1 In 2013, Maternal mortality (modeled) was 1,100 per 100,000 births; and Under-5 mortality was 60.6 per 1,000. World Development Indicators accessed on October 30, 2014, http://databank.worldbank.org/Data/Views/reports/tableview.aspx 2 The Ebola virus disease epidemic covered three neighboring countries in West Africa, Guinea, Liberia and Sierra Leone. A small number of cases were also reported and treated in other neighboring countries and internationally, borne by infected travelers from the three countries. 3 Ebola is a rare but deadly virus that causes bleeding inside and outside the body. It spreads to people by contact with the skin or bodily fluids of an infected human or animal (such has a monkey or a fruit bat). Those who care for a sick person or bury someone who has died from the disease often contract the disease. As the virus spreads through the body, it damages the immune system and organs. Ultimately, it causes levels of blood-clotting cells to drop. This leads to severe, uncontrollable bleeding. Left untreated, the disease can kill up to 90 percent of people who are infected.

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Figure1: Number of New Ebola Infections and deaths

Source: World Health Organization Ebola Situation Reports.

8. The health care system was poorly prepared and the infrastructure inadequate to respond to an epidemic of this magnitude. Sierra Leone’s health care system was extremely weak to begin with and the Ebola crisis posed enormous additional challenges. Special facilities were needed to isolate people to avoid the spread of infection. Ambulances were also required to transport infected people to treatment facilities with trained personnel. An Ebola epidemic is not like cholera where conventional vehicles could be used to transport sick people because, in the latter case, there was not the high risk of contagion. It also took the international community time to respond during which the disease got a foothold and the epidemic spread. The Ministry of Health (MoH) took the lead from the beginning using its own resources for additional emergency workers. The World Bank had an ongoing health sector project (Reproductive and Child Health Project) which was quickly restructured to make resources immediately available to the government. The roughly US$6 million went to emergency procurement of the first shipment of drugs and other medical supplies including protective gear for health care personnel. In a July 2014 Aide-Memoire for preparation of a regular development policy operation as part of a programmatic series of three, the Ebola outbreak was recognized, but the full magnitude was not yet appreciated. 9. The EEFSO was a hybrid of fiscal transparency reforms and support to the campaign to fight the Ebola epidemic. The original set of reforms measures focused on fiscal management and transparency as well as banking sector reforms. These measures were aligned with the pillars of the Agenda for Prosperity most relevant to the program (Governance and Public Sector Reform). This program was modified when the Ebola crisis hit and measures to support the response to the Ebola outbreak were added to the program. The program maintained a consistent theme by focusing on the financial management aspects of the Ebola response. 10. The US$30 million EEFSO, which disbursed in 2014, included US$10 million from the IDA Crisis Response Window (CRW) and was followed in 2015 with US$30 million of

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supplemental financing, with each reflecting a tripling of the originally planned amounts. The additional resources aimed at increasing the fiscal space available to government to implement its national Ebola response plan. The operation emphasized budget management, reduction of fiscal risks and transparency and accountability for public resources. These risks increased as a result of the Ebola epidemic. The World Bank front-loaded its 2015-17 program in support of the economic recovery and to continue to mitigate the social and economic consequences of the epidemic. 11. The EEFSO was implemented in the context of a broader World Bank response to the expanding Ebola crisis in 2014 through a US$390 million regional Ebola Emergency Response Project (EERP). Through the EERP Guinea received US$97 million, Liberia US$167 million, and Sierra Leone US$126 million, all as grants. The EERP provided the bulk of the support to the international response to the crisis including support to responding international medical teams, and for protective gear, essential medicines, logistics equipment and food items. This operation was instrumental in the initial intensive responses to the epidemic. The World Bank was the largest source of government administered funds for the crisis. Macro and sector context 12. Economic growth was rapid prior to appraisal of the operation (because of the commodity boom), inflation fell to single digits from a relatively high level and the debt to GDP ratio fell to a low of 32.2 percent (table 1). The current account balance also steadily improved. Moreover, adherence to sound fiscal and monetary policies to support macroeconomic stability was an important PRSP-3 priority. 13. The macroeconomic indicators at the time of appraisal of the original operation in late-2014 suggested an adequate macroeconomic framework, but the considerable uncertainty surrounding the economic impact of Ebola prevented the usual three years of macro-fiscal projections as required for DPOs. Real GDP of 4.6 percent in 2014 masked sharply divergent underlying trends. Economic growth over the first half year was robust at 11.3 percent annualized, fueled largely by a newly established iron ore sector. As the epidemic took hold, it led to an economic contraction over the second half that averaged -1.3 percent. The uncertainty was compounded by the ensuing international isolation as all airlines suspended flights into Sierra Leone and the near siege-situation that prevailed domestically as the population struggled to cope with quarantines, several national shutdowns and personal tragedy on an unprecedented scale.

14. The effects of the Ebola epidemic were compounded by the collapse in the iron ore prices. The price of iron ore fell by 68 percent from US$128 per metric ton in January 2014 to US$41 per metric ton in December 2015 and has remained below US$60 throughout 2016. This resulted in the shut-down of two major iron ore companies and the wiping out more than one-fifth (21.5 percent) of the country’s GDP. Exports of goods and services declined by more than half, standing at US$586 million in 2015, down from US$1,304 million in 2014. Iron ore exports, which represented 69 percent of Sierra Leone’s exports in 2013, amounting to US$1.1 billion, collapsed to $23 million in 2015. The increasing trend in diamond exports, the second largest export product, was also reversed in 2015.

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15. As a result, the balance of payments deteriorated. The current account deficit also increased to US$911 million, far higher than projected and would have deteriorated further had it not been for the US$536 million increase in mostly Ebola-related aid transfers. In 2015, with the closure of the two large iron ore mines for nearly the full year, lower non-iron ore mineral production and further reductions in commodity prices and exports, the trade deficit deteriorated to US$724 million. However, the current account deficit narrowed to 18.5 percent of GDP from 38.1 percent in 2014, because the declines in exports were more than offset by lower imports, services and income outflows, as well as higher than initially projected official transfers, including from the Supplemental financing for the EEFSO. Consequently, the foreign reserves increased from 3.4 percent in 2013 to 4.8 months of imports in 2015. 16. The EEFSO aimed to reduce the threat to macroeconomic stability by supporting government efforts to halt the spread of Ebola through: (i) strengthening public financial management to ensure scarce resources are used as efficiently as possible; and (ii) enhancing transparency and accountability. See Annex 9 for additional macroeconomic indicators. The World Bank conducted a debt sustainability analysis jointly with the IMF in October 2013 (updated in September 2014) concluding that Sierra Leone’s risk of debt distress remained moderate. The macroeconomic policy framework overall was considered adequate for the EEFSO. The cost of the Ebola response was assessed and a financing plan agreed, including the EEFSO and an augmented Extended Credit Facility. The IMF’s review under the ECF arrangement in June 2014 noted general compliance with all performance criteria, but one indicative target was missed. .

Table 1: Macroeconomic Indicators Leading up to Appraisal Indicator 2011 2012 2013 2014 2015-est.

Real GDP 6.3 15.2 20.7 4.6 -21.1 Inflation 16.2 12.9 9.8 8.3 9.0 Total Public Debt/GDP 44.0 37.2 32.2 34.5 40.6 BoP-Curr. Acct. balance (excl. transfers)-% of GDP

-22.8 -48.1 -38.1 -18.5 -20.9

Rationale for Bank Involvement 17. The rationale for World Bank involvement derives from the Bank’s comparative advantage in public financial management (PFM) reforms, and its critical role in providing emergency financing to support the broader effort to contain the Ebola epidemic. The World Bank has been a member of the multi-donor budget support (MDBS) group that worked together on the Performance Assessment Framework (PAF). The PAF helped coordinate the pursuit of a number of key fiscal management and transparency reforms. The World Bank was also able to provide critical funding for the emergency response.

1.2 Original Program Development Objectives (PDO) and Key Indicators 18. The program development objective was: to ensure that the Government’s Ebola Response Plan can be executed through adequate budgeting and transparent use of resources, consistent with strengthening longer-term fiscal management and transparency. With the large

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volume of development support pouring in to combat the Ebola crisis, this operation was intended to ensure that there was control over how key resources were monitored and used. Table 2 provides the key indicators for the program and their results. Indicators 7. and 8. were also from the 2014 PAF.

Table 2: Key Indicators for the EEFSO Indicator Baseline Target Result

Pillar 1: Strengthen budget management and reduce fiscal risks heightened by Ebola 1. Clinical and non-clinical workers paid through the formal hazard payment system, disaggregated by gender (%).

0% 80% 100%

2. Audits of hazard payments by the Internal Audit Department of MOFED (number).

0 Quarterly audits

Quarterly audits /a

3. Aggregate report from banks including opening and closing balances and summary of receipts and payments (monthly).

No Yes Yes

4. Estimate of fiscal contingent liability (yes/no). No Yes Yes Pillar 2: Improve transparency and accountability for public resources

5. Supplementary Budget for 2014 sanctioned by Legislature (yes/no).

No Yes Yes

6. Budget execution rate (% of appropriation) 75.4% 90.0% 111.1% 7. Mineral Lease Agreements published on the internet or otherwise (% of total Lease Agreements on record).

0% 90.0% 100%

8. Coverage of 2013 revenues from extractive industries publicly reported (%).

0% 90.0% 93.3%

/a There was also an external audit. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification 19. Not Applicable 1.4 Original Policy Areas Supported by the Program Pillar 1: Strengthen budget management and reduce fiscal risks heightened by Ebola 20. This pillar aimed primarily at improving accountability for funds and ensuring that funds were used for their intended purposes, namely hazard pay for emergency workers who were in a high-risk environment during the Ebola crisis. These workers ranged from doctors and nurses, laboratory technicians to contact tracers, cleaning crews and burial teams. The World Bank together with the African Development Bank financed hazard pay through the Ebola Emergency Response project and the proposed Additional Financing for the same, noted above. Payments to regular and non-regular (volunteer) workers were problematic, in large part because of the ad-hoc nature of their employment and so these payments were initially made in cash and distributed to District Officers in each district. Government recognized that such an ad-hoc system was not consistent with good principles of financial management and could also invite abuse and result in wasted resources. MOFED therefore pledged to establish a system to ensure that all eligible clinical and non-clinical staff receive hazard pay through a formal payments system such as a bank account or a mobile payment system, with respect to their responsibilities in responding

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to the Ebola Virus Disease crisis. The EEFSO also provides for this payment system to be audited on a regular basis. The non-Ebola part of this pillar has two main actions:

Phase 1 of a Treasury Single Account (TSA) has the expected result to secure a much higher level of budgetary control, execution and accountability and thus enhance the predictability of resource flows to service delivery agencies. The first phase includes completing an inventory of government bank accounts and the signing of a Loans and Fiscal Agency Agreement between the MOFED and the Bank of Sierra Leone (BSL) governing the TSA.

Audited financial reports for the Sierra Leone Commercial Bank and Rokel Commercial Bank for the 2013 financial year has the expected result to progressively identify and manage fiscal risks. These two institutions are a source of significant fiscal risk to the Government (Le 155 billion in bad debt provisions—end June 2014), and resolution of these banks’ status required an understanding of their underlying financial situation that would emerge from audited financial statements (for the 2013 financial year).

Pillar 2: Improve transparency and accountability for public resources

21. Pillar 2 pursued a number of fiscal transparency reforms, including reforms in the mining sector to require that companies publicly report mining leasing agreements and account for at least 90 percent of revenues to the government from mining activities. This Pillar also covered approval of the Supplementary budget for 2014. 22. The submission of a Supplementary Budget to Parliament for extra-budgetary expenditure in 2014 is necessary because over-expenditure needs to be sanctioned by the appropriate legislative body or oversight entity in order to ensure appropriate accountability. This measure is important in Sierra Leone with its cash accounting system as over-spending in one year that leads to a fiscal overhang in the following year, needs to be adequately accounted for and accommodated. 23. Revenue transparency in the minerals sector through the publication of mining leasing agreements and the annual disclosure and disseminating of detailed information on revenues from the sector to the public. Compliance had been difficult due to fragmentation of the required data across agencies and recording systems, but, in the interim Government committed to disclose publicly in 2014, a statement of the revenue collected in 2013 from the top extractive industries covering at least 90 percent of the total collection.

1.5 Revised Policy Areas 24. Not Applicable

1.6 Other significant changes 25. The impact of the Ebola crisis on government spending was greater than expected, and in the face of substantially lower than anticipated iron ore revenue in 2015, this led to an urgent need for additional financing. The Ebola crisis had a significant impact on domestic

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revenue in 2015, which was some 27 percent lower than the pre-Ebola level. Around two-thirds of the decline in domestic revenue in 2015 could be attributed to Ebola, with one-third attributed to the fall in commodity prices. Under the circumstances, expenditure compression was undertaken, but could was inadequate to take the full brunt of the required adjustment as there were a number of unavoidable spending needs—both related to the Ebola epidemic which continued until late 2015 and for post-Ebola recovery, including for example preparing for the reopening of schools and increased social protection costs for a subset of survivors. Thus, GoSL was in urgent need of additional budget support funding. The World Bank prepared and approved supplemental financing (P157333) of an additional US$30 million (standard IDA grant terms) to the program which became effective on December 8, 2015. 26. The ICRR adjusted the program’s sector codes because the original codes overemphasized mining prior actions and general social protection over health. Thus, the health sector code was increased from 7 to 21 percent, while mining was reduced from 29 to 21 percent and social protection from 21 percent to 15 percent.

2. Key Factors Affecting Implementation and Outcomes 27. The EEFSO and its supplemental provided total financing of US$60 million. Table 3 provides key milestones for the stand-alone operation and its supplemental. All prior actions were completed before the EEFSO’s approval. Annex 10 provides a timeline of EEFSO-related events.

Table 3: Basic Data for the EEFSO

Operation Approval Date

Effectiveness Date

Disbursed Amount (million US$)

Closing Date

EEFSO-P146726 12/17/2014 12/18/2014 29.70 06/30/2016 Supplemental-P157333 12/08/2015 12/17/2015 30.00 06/30/2016

2.1 Program Performance 28. The program had three purposes: (i) provide budget support at a time when fiscal revenues were reduced because of the Ebola crisis and the decline of mining revenue; (ii) strengthen the management of funds intended to compensate Ebola workers; and (iii) improve the transparency and functioning of the broader public expenditure framework. Although the prior actions were completed (Table 4), few results had been measured by program closing (the Implementation Status and Results Report-ISRR did not update results). The ICR, however, reports the actuals for all of the results indicators (Table 2).

Table 4: Summary Status of Prior Actions Prior Action Status

Pillar I: Strengthen Budget Management and Reduce Fiscal Risks Heightened by Ebola 1. The Recipient’s Ministry of Finance and Economic Development has established a formal hazard payment system for clinical and non-clinical workers responding to the Ebola crisis.

Formal hazard payment system was established and implemented through mobile phone payments and electronic payments to bank accounts. Recipients were required to have photo identification which was also

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issued under this initiative and possess a valid contract. With the end of the Ebola epidemic, this system was no longer required.

2. The Recipient’s Ministry of Finance and Economic Development has appointed a fiduciary agent to ensure that the clinical and non-clinical workers receiving hazard payments are entitled to receive said hazard payments and are providing appropriate services.

Fiduciary agent was appointed, with contract renewed through two cycles. Fiduciary agent worked closely with the National Ebola Response Center (NERC) and performed its duties in a satisfactory manner.

3. The Recipient’s Ministry of Finance and Economic Development has executed a Loans and Fiscal Agency Agreement with the Bank of Sierra Leone as part of the implementation of phase one of the Treasury Single Account.

The effort to implement the TSA is in its second phase. The number of individual accounts of MDAs has fallen dramatically and a contractor is currently developing the model for the TSA. Technical specifications are being reviewed at the time of this ICR.

4. The Recipient’s Ministry of Finance and Economic Development has received audited financial statements for year ended 2013 for Sierra Leone Commercial Bank Limited and Rokel Commercial Bank (Sierra Leone) Limited, respectively, with a view to assessing the contingent liability implications for said Sierra Leone Commercial Bank Limited and Rokel Commercial Bank (Sierra Leone) Limited.

Work to adequately assess the contingent liability implications requires additional and more up to date information, so 2014 audited financial statements have been prepared and received and a diagnostic review of the banks has been completed with the support of the IMF and the World Bank.

Pillar II: Improve Transparency and Accountability for Public Resources 5. The Recipient’s Ministry of Finance and Economic Development has submitted a Supplementary Budget for extra-budgetary expenditure in Fiscal Year 2014 to Parliament.

This action was undertaken and valid for 2014, no further action was indicated.

6. The Recipient’s Ministry of Mines and Minerals has published all signed Mineral Lease Agreements, with a view to increasing transparency and accountability in the mineral sector.

Disclosure about signed Mineral Lease Agreements remains valid and up to date. No new mineral leases have been signed since 2012.

7. The Recipient’s Ministry of Finance and Economic Development has published in Fiscal Year 2014, data on revenue collected in Fiscal Year 2013 from top extractive industries consistent with §159 of the Mines and Minerals Act.

Disclosure about extractives revenue in 2013 has been complemented by disclosure of 2014 revenues. Data is also available for 2015 and 2016.

Details of the Program’s support to the Campaign against Ebola 29. The EEFSO supported the establishment of a formal (non-cash) payment system for a large number of geographically dispersed workers who were receiving hazard payments and played an essential role in the successful Ebola response. Hazard workers included existing health care professionals, as well as a vast army of volunteers. There were approximately 40,000 volunteers at the height of the epidemic. Note that these emergency workers were volunteers in the sense that they stepped forward to help in various roles, not that they were working for free. Hazard pay workers received a graduated rate of compensation, depending on the risk category assigned to their role. Without these volunteers incentivized with hazard pay, it is difficult to see how the epidemic could have been brought under control.

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30. This payment system was innovative, and helped gain control of payments to hazard workers and ensure that funds actually got to the health workers who risked their lives. The payment system went through three phases: (i) cash-based with poor verification; (ii) improved cash system with photos and verified lists of workers; and (iii) full automated system with biometric identification. As the program was under preparation in October 2014, the payment system was entirely cash based with poor record keeping and concerns about governance. Bundles of cash would be brought to the Ebola afflicted areas and distributed to persons claiming to be clinical and non-clinical workers. Fraud was believed to be pervasive as there was no reliable system to vet those who lined up for payment. Government funds to pay legitimate hazard workers were also running out and payments were at times sporadic. This culminated in a strike by the workers at the peak of the epidemic. The World Bank mobilized to support the Government in its efforts to establish a more formal, electronic payment system with a much greater degree of accountability. Cash payments were maintained in the transition to the progressively implemented new system albeit with more controls in place, which is believed to have dramatically reduced the number of false claims. Many individuals returned money once they were identified by audits of having falsely claimed for payments. 31. Subsequently, the program improved the payment system through beneficiary identification and though a more efficient, non-cash based payment mechanism. Clinical and non-clinical workers were identified through a biometric system set up with the support of the United Nations Development Program (UNDP), a key partner in the program. This greatly improved the accuracy of identifying actual workers. The payments were made electronically through bank accounts and where banking services did not exist, through mobile phones, which were issued to the workers who did not have one. The beneficiary would receive a code and then provide that code to merchants who sold phone cards (Africell). The merchants would pay the hazard worker in cash and receive a small commission for the transaction. The UNDP also supported the Information Technology (IT) system for this mechanism. This system worked well in an environment that largely lacked formal banking services. Some areas continued to use the mobile phone mechanism throughout the program, others were able to use formal bank accounts. This system is clearly suited for crisis situations and, should the need arise again, remobilization would likely be achieved more quickly on a large scale. Supplemental Grant 32. The supplemental grant4 addressed the unanticipated financing gap in the budget that was mainly the result of the drop in domestic revenues caused by the Ebola crisis. Domestic revenues declined from 12.6 percent of non-iron ore GDP in 2013 to 11.0 percent in 2014, reflecting lower levels of economic activity, and lower tax compliance. Domestic revenues declined further to 10.5 percent of GDP in 2015, but were above the projection of 9.8 percent of GDP as tax collection efforts increased over the first half of the year. These efforts included income tax back payments for 2014 prior to the closure of the iron ore mines and from departing suppliers to the mines as they wound-up operations. Revenues were lower in the second half as royalty

4 There was not a Concept stage document for the original EEFSO, because, in view of the emergency situation, it was agreed between regional management and Operations Policy and Country Services that there would be a single corporate review. Consistent with Bank procedures, the supplemental also did not require a concept stage review.

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payments and payroll taxes fell dramatically, because other mining enterprises were also experiencing financial distress resulting from Ebola’s effects on mining activity (availability of workers), and from lower world commodity prices. The Bank team chose the supplemental financing option because of the urgency of the need for funding. Taking the additional time required to process another DPO could have increased macroeconomic risks. 33. Spending needs of the Ebola crisis extended to the full range of public services required to support the Ebola response and in 2015 included critical support for the economic recovery. Ebola related spending in 2015 was much higher than originally projected, as the achievement of zero incidence did not take place by the end of the first quarter of 2015, as originally anticipated. Spending priorities had to be addressed as they arose, including for social protection and support for the vulnerable and sick, for survivors, among them more than 8,000 orphans, for costs of re-opening schools, and for other needs related to the crisis. Thus, the Supplemental Grant was urgently needed.5

2.2 Major Factors Affecting Implementation Government Commitment 34. Government commitment was generally strong in the overall effort to defeat Ebola, but there were some soft spots, both in the Ebola effort and in the broader EEFSO. The GoSL was desperate to halt the Ebola outbreak and worked tirelessly with the development partners to coordinate and implement the effort. Moreover, the MoFED showed its commitment to solve an implementation shortcoming. Some district offices of the MoH refused to provide an official list of hazard workers to the fiduciary agents that were verifying the payments. This issue became sufficiently acute to cause the first fiduciary agent, Klynveld Peat Marwick Goerdeler (KPMG), to pull out of contract negotiations. This problem was solved when the World Bank and the Minister of Finance pressured the district offices to release accurate lists of health workers. Soon after the issue was resolved, another firm, Binder Dijker Otte (BDO) was selected and carried out its role as fiduciary agent. 35. In the area of fiscal management and governance, the government demonstrated commitment by carrying out the requirements of the program, but will need to do better follow up work to sustain the progress in some areas. For example, the ICR mission found that there was some difficulty in measuring and improving budget execution rates. The MoFED website, which is the vehicle for budget transparency, contained only older budget statistics (several years old). The effort to establish a treasury single account (TSA) is a more positive story of commitment with the number of government agency accounts falling significantly and software development for the TSA underway. The audits of the two commercial banks have been carried out, but the disposition of these banks is not yet clear, despite the fact that the audits were completed two years ago.

5 Through-the-year financing of the larger than expected budget gap was achieved through the government's overdraft facility with the central bank, which needed to be repaid/cleared by year-end, in order to be compliant with the law, and more importantly to ensure continued macro stability. So the effectiveness date of the Supplemental relative to the announced end of the epidemic is not relevant.

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Soundness of background analysis 36. There was significant analytical work, particularly in the PFM area, and the World Bank was able to exploit its institutional knowledge in a number of areas to help design a relevant program. For example, the World Bank had experience in other countries with making payments through mobile phones which proved important in establishing the hazard payments system. Mobile money was a good substitute for the cash-based system and where formal banking did not exist. The World Bank and the GoSL worked well together in establishing hazard pay guidelines, and they did a good job of keeping donors informed as the guidelines were developed. The World Bank’s PFM and financial sector experience was also important to identifying some big-ticket issues that needed to be addressed, such as conducting diagnostics of two key commercial banks, moving toward a TSA and improved transparency related to mining. World Bank President Support 37. Because of the urgency of the crisis and the potential for exponential expansion of the Ebola cases, the World Bank accelerated program processing, with support from the highest level of the institution. In this regard, World Bank management agreed to a single combined corporate review rather than the two normally required. The normal period of circulation to the Board before its consideration of the proposed operation was also shortened. As a result, the time from the concept stage to Board approval and effectiveness, was relatively fast (November 7 – December 17, 2014). The president of the World Bank was following the Ebola crisis closely and was receiving daily briefings on the crisis. World Bank support was evidenced by the approval of Supplemental Financing and the other investment projects that were helping to address the crisis. The Bank president subsequently received a letter of gratitude from the President of Sierra Leone in which he cited the Bank’s indispensable role in ending the Ebola crisis (Annex 8). Additional details of the broader Ebola response including success factors and lessons are presented in annex 7. Donor Coordination 38. The Ebola crisis required an extraordinary coordinated response from the GoSL and its development partners. The World Bank collaborated closely with the Multi-Donor Budget Support (MDBS)6 partners. There was also a close collaboration on macro-fiscal and financial sector issues and structural reforms with the IMF. The IMF and MDBS partners had provided financial support to Sierra Leone since the end of the civil war in 2002. This collaboration expanded after the start of the Ebola crisis and extended to all the main actors involved in the EVD crisis response, including the U.N. Mission for Ebola Emergency Response, the WHO, WFP, Médecins Sans Frontières and the U.S. Centers for Disease Control. In September 2014, the IMF Board increased access under the ECF for SDR 25.93 million (US$39.8 million equivalent).

6 MDBS includes: African Development Bank, UK Department for International Development, European Union and the World Bank.

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Assessment of operation’s design 39. The formulation of the PDO 7 folds financial transparency and accountability measures into the Government’s Ebola response, even though these measures were not strongly related to the response. The ICR assesses the program with respect to two dimensions: the Ebola response through the hazard payment system for Ebola response workers, and the broader fiscal management and transparency agenda. The design of the operation addressed the unexpected challenge of the Ebola epidemic in the midst of preparation, which led to a scaling down of the program design on the fiscal management side. This adjustment reflected the fact that the GoSL’s limited capacity was engaged mainly in the Ebola crisis. The fiscal management measures and targets were appropriate because they were i) feasible even in a crisis situation, and ii) allowed the GoSL to make some progress toward transparency and accountability. The hazard payment system related actions were appropriate to ensure not only adequate fiduciary controls, but, more importantly, to ensure efficient and timely payments to people who risked their lives in dealing with the crisis and so that the workers would not go on strike. Relevance of risks identified and effectiveness of mitigation measures 40. The three main identified risks, political, governance and fiduciary, were correctly assessed with some qualifications. Political risk was generally low in fighting Ebola as the GoSL was determined to overcome the crisis. Political risk to the rest of the program was higher because achieving greater transparency in government finances was not a given. This risk did not materialize within the narrow scope of the program, but to achieve impact from the prior actions, additional follow up will be required, which will be mainly through the policy dialog in the near term. The governance risks were clear in the payment of hazard workers. The program design dealt with this risk by implementing an automated system and contracting a fiduciary agent. There was the added risk that District offices did not want transparency in identifying emergency health workers, a risk that did materialize. As discussed, this risk was mitigated by the MoFED and World Bank pressure to provide accurate lists of workers. The risk of falling international commodity prices did materialize with the drop in iron ore prices on which Sierra Leone’s budget relied. To deal with this risk, the program generally cited measures to promote economic diversification, but this was not within the scope of the program. The risk of weak institutional and fiduciary capacity was dealt with in the program design by including actions that the MoFED could implement fairly easily and through requiring a fiduciary agent to oversee the hazard payment system.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design 41. The results indicators were relevant to the PDO and the prior actions, but they were mostly indicators of completed actions. Moreover, the Program Document (PD) stated expected results that were, in some instances beyond the scope of the program’s actions. Given the challenging environment created by the Ebola crisis, it is understandable that results

7 To ensure that the Government’s Ebola Response Plan can be executed through adequate budgeting and transparent use of resources, consistent with strengthening longer-term fiscal management and transparency.

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indicators and targets were not overly ambitious. Indicators 2, 3, 4 and 5 (Table 2) were of limited value to the assessment, because they were simply recording completed actions. M&E for indicators 7 and 8 (Table 2-related to transparency in mining) benefited by being part of the PAF, which is a multi-donor matrix of indicators and targets for reforms for MDBS (and were therefore monitored by the group of development partners). In addition to the PDO and the results framework, the PD identified four main expected results. Table 6 presents these results and the degree to which the results indicators captured these results. The ICR views these results expectations as, although consistent with the direction of the program, longer-term in nature and largely beyond EEFSO’s scope, particularly considering the emergency context of the operation.

Table 6: Expected Results of EEFSO and Results Indicators Expected Results (from the PD) Result Indicator(s)/Comments

Result 1 (para 4.6). The expected result of these measures will be to establish a robust and accountable temporary payment system which could be rapidly re-mobilized in the event of future national emergency.

Payment system audits and % covered by the payment system. The results indicators were appropriate, but did not cover the ability to re-mobilize. Measuring the reduction in hazard worker strikes from improved payment would have been a good outcome measure.

Result 2 (para 4.9). The expected result of these measures will be to secure a much higher level of budget control, execution and accountability and thus enhance the predictability of resource flows to service delivery agencies.

Budget execution rate. This result was associated with establishment of the TSA and was a longer-term result than the scope of the program. The indicator was related to the action, but did not have an appropriately specified baseline.

Result 3 (para 4.12). The expected result of these measures will be to progressively identify the contingent liabilities and to manage the fiscal risks therefrom.

Diagnostics of two main commercial banks. This was the first step toward the result, but there was no indicator to measure subsequent action.

Result 4 (para 4.16). The expected result of these measures will be increased budget execution, enhanced transparency and increased accountability in the minerals sector.

Supplementary budget, publish mining revenues and signed mineral lease agreements. These indicators were consistent with the transparency objectives.

Implementation and Utilization 42. The emergency context is also essential in assessing implementation of the program M&E. The overriding priority of the government was the Ebola response, which entailed an “all hands-on deck” effort from government ministries, the army, development partners, NGOs, health sector experts, and volunteers. The logistics of the Ebola response dwarfed that required by a typical budget support program. Tremendous amounts of data on placement of medical resources and Ebola cases had to be processed to ensure an effective response. Although government operations continued, this response absorbed nearly all of the M&E capacity in the country. 43. The MoFED was primarily responsible for the tracking of all of the results indicators. The MoFED did provide necessary data to the ICR mission, but there is little evidence that the program results indicators were monitored during implementation. The indicators did not allow for measuring improved outcomes if the prior actions were sustained. Indicators that measured improvements, such as accuracy of budget execution percentage or what would be the follow up for diagnostic of the commercial banks would have been helpful in assessing program impact.

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The ICRR has partially compensated for this weakness by reporting on achievement of each indicator up to the date of the ICRR. 44. Completion of prior actions was verified, and the data for all indicators has been collected and is available for the years subsequent to the program. An ISRR was done (archived July 8, 2016), though not required for the standalone operation. This ISRR did not contain updated actuals for results indicators. There was also no stocktaking of results indicators in the Supplemental Financing Document (though the status of prior actions was presented). Achievement of targets for the PDO indicators had to be verified at the ICR stage. There were audits and data available from the MoFED to make this verification possible.

2.4 Expected Next Phase/Follow-up Operation (if any): 45. The Productivity and Transparency Support Credit (P156651) that is planned for June 2017 will continue efforts in improvement of transparency in fiscal management. The Public Financial Management Improvement and Consolidation Project (P133424) (although approved before EEFSO) continues through March 31, 2018, and addresses capacity issues in fiscal management and transparency reforms, which are relevant to the EEFSO. This project supports efforts in budget planning and credibility, financial accountability, control and oversight, and PFM reform coordination. In the health sector, there are two projects that will help strengthen capacity, the Regional disease surveillance project (P154807) and the Health Service Delivery & System Support Project (P153064). Regarding the specific preparedness for a possible future Ebola outbreak, the country is better placed to react and mobilize as a result of the experience from the 2014-15 crisis. One improvement is that the Office of National Security (ONS) has been designated as the lead agency for any future epidemic. Additional resources have been allocated to the ONS to ensure capacity is adequate for such an emergency response.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation Overall rating: Substantial Objectives 46. The program objectives were central to the national priority of ending the Ebola crisis and continue to be relevant to the longer-term priority of improving fiscal management and transparency. Although the Ebola crisis is over, there is always the possibility of another crisis and readiness and control of resources continues to be a relevant objective. The program’s PDO to improve longer-term fiscal management and transparency remains highly relevant and is a continued focus of the government development strategy. The Country Assistance Strategy (CAS) at the time of appraisal covered the period 2010-13 and there has not been a new CAS. The multi-donor PAF continues to track much of the PFM reform agenda, and the PAF for 2016 shows that while progress has been made in a number of areas covered by the EEFSO, there is still much work to do as evidenced by the fact that most of the PAF indicator targets have not been met.

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Design 47. It is challenging to assess the relevance of the design of the operation, as it is not clear how ambitious a program should be (in non-crisis areas) in the midst of a nationwide health crisis. Establishing an effective system for hazard payments was important to an effective Ebola response effort and most importantly to avoid strikes by emergency workers. The selection of the fiduciary agent to ensure payments was a critical factor in program success. Thus, the Ebola response part of the program was highly relevant. On the PFM side, it was appropriate to maintain the transparency and accountability reform program. The program design was not overly ambitious, which was reasonable given that GoSL energies were focused on the Ebola epidemic. Still, the program probably could have been more explicit in calling for sustained follow-up, particularly in light of the extension of the program and the provision of supplemental financing. The design of the results framework might have gone beyond recording of completed actions to allow for a more meaningful outcome assessment. Balancing the strengths and weaknesses of design, the rating is substantial. Implementation 48. Implementation of the hazard payment system was critical for mounting an effective response to the spreading Ebola disease and ending the epidemic, and also for improving the transparency of resource use. Effective application of information technology with support from the World Bank and the UNDP helped ensure that the right people were being paid on time throughout the crisis, thus minimizing work stoppages. The need to have a functioning payment system will be relevant in a future crisis. 49. The Supplemental financing was relevant to country priorities, because, although the Ebola crisis had effectively ended, there were large financing needs. As clearly laid out in the program documentation, the sizeable financing gap needed to be closed. There were also longer-term needs of the population in terms of recovering from the epidemic.

3.2 Achievement of Program Development Objectives 50. For the assessment of achievement, this section divides the PDO into two components. The first component of the PDO, the Ebola response, aimed at transparency and providing the basis for adequate budgeting. The second component of the PDO, also aimed at improved transparency, but were early steps in a longer-term reform program. These PDOs are assessed individually and overall. Six of the eight targets in the program results framework were met, one was substantially met, and one did not have reliable information to confirm the target’s achievement.8

8 Note that the PD assigns two indicators, reports on bank balances (TSA-related) and contingent liability estimates of two commercial banks, to the Ebola-related part of the PDO. The ICR takes the position that these indicators are more appropriately applied to the fiscal management and transparency part of the PDO and makes its assessment accordingly.

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PDO 1: To ensure that the Government’s Ebola Response Plan can be executed through adequate budgeting and transparent use of resources. Achievement--Substantial 51. To achieve this objective, the GoSL had to be sure who the frontline health workers were and that they were getting paid on time, which, in turn, would provide a more accurate estimate of the cost of the response. If the Sierra Leonean authorities were not sure whom to pay, or underestimated the number of workers, then budgets could be inadequate, the wrong people might get the allocated resources and the actual emergency workers would strike. Then the fight against the Ebola epidemic would slow down and the crisis would be extended and afflict more people. Although it is not possible to measure, this would certainly have meant more fatalities. Two indicators reflected the results under this component of the PDO: 100 percent of hazard workers were paid through the established system. The resulting accounts were audited, twice during the program and at the end although the target for audits had actually called for quarterly audits. There were fewer than expected audits because of delays in collecting data. Thus, this part of the PDO is substantially achieved. 52. In achieving accurate payments, the GoSL and the fiduciary agent had to also be mindful of a possible trade-off: One is the fiduciary objective to avoid payments to non-eligible workers vs. the second, and far more important, objective to ensure that Ebola emergency workers are paid adequately and in a timely manner. This was crucial to ensuring that these workers stayed on the job to get control of the spread of Ebola, and treat infected people and avoid additional infections. According to the audit reports they were successful at both. One audit report focused on “double-dippers,” who claimed payments that they were not entitled to. As the new payment system was put in place, some “double-dippers” came forward to return money. It was not a large amount compared with expenditures, but it was a signal that people respected the rules. 53. This ICR is not crediting the EEFSO with the defeat of Ebola by itself, because there were other (previously identified) Bank projects and organizations that were directly supporting the campaign against Ebola.9 Still, the EEFSO role in the hazard payment system was critical to the response. PDO 2: …consistent with strengthening longer-term fiscal management and transparency. Achievement—Modest 54. Six indicators reflected progress under this component of the PDO, and the targets were mostly met. The most promising and long term of the indicators is the progress in establishing the TSA. The overall effort is behind schedule, mainly due to the Ebola crisis, but the government has made strong progress in reducing the number of agency accounts from more than 1,500 separate government bank accounts to approximately 300 (as reported to the ICRR mission). According to the IMF, several MDAs still hold non-transparent and inaccessible bank accounts with potential idle funds. The TSA is expected to make transparent these accounts and consolidated them, and make them accessible to the Ministry of Finance to improve cash management, reduce expenditure mismatching and financing costs. As of end June 2017, existing bank accounts are

9 There were two Bank projects that supported the fight against Ebola: 1. The ongoing Reproductive and Child Health (RCH) Project and 2. The Ebola Emergency Response Project.

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linked for consolidation. A software for the TSA is under development. The continued effort is supported by the World Bank, the IMF and the United States Agency for International Development (USAID). 55. The estimate of contingent liabilities of two commercial banks has been carried out, which is a first step. Financial audits of the two state owned banks have been carried out, and audited financial statements are available. The Bank supported a diagnostic study of the two state-owned banks through the Financial Sector Development project. The findings of the study indicate that the financial situation of the two banks deteriorated significantly with the level of Non-Performing Loans exceeding 75% for both. 56. The budget execution rate appears to be in excess of the target. The baseline (2014) quoted in the PD appeared to be a partial year estimate (75.4 percent—actual over budget), which was not useful for comparison. The MoFED reported to the ICR mission) an actual of 111.1 percent for 2016.10 It is important to measure this indicator accurately in order to improve fiscal management by better matching resources with budget plans. The relevance of the was also difficult to assess since budget overrun was current before the program and continued after the program. According to the last PEFA report (2014), the aggregate government expenditure outturn exceeded the original approved budget by 30.7 percent in 2010, 16.3 percent in 2011, and 23.7 percent in 2012, thus reducing tremendously the PEFA indicator PI-1 on the credibility of the budget, which was rated D against a B in the PEFA 2010. In 2016, the aggregate government expenditure outturn exceeded the original approved budget by 15 percent and generating unpaid bills and arrear accumulations. The other program indicator that was related to the budget was that the Supplementary Budget for 2013 was sanctioned by the Legislature. This indicator was met and was important in the context of Sierra Leone that the amount of expenditure exceeding the planned budget is officially recognized. 57. Transparency in the mining sector has improved with leases and revenues publicly available. Mining leases that were signed through 2012 were published. Leases in subsequent years have also been published. In addition, all revenues from mining sources were also publicly reported through 2016. These measures were particularly important to transparency at the outset of the program because revenues were high, until the collapse of iron ore mining. By publishing both leases and revenues, the GoSL is increasing transparency of an important part of the nation’s sources of funding.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory 58. The overall outcome of the program is rated moderately satisfactory. The PDOs were broadly achieved, as were most of the targets (See Table 4). A central plank of the program, the Ebola hazard pay system was successful. However, on the PFM side, while important actions have

10 There is some discrepancy in these numbers however. The PAF Aide-memoire for 2016 showed wider dispersions in the budget execution, “the variance in expenditure composition between actual and originally budgeted primary expenditure was 26.1%, well above the milestone target of 15%.” Note also that the overall PEFA rating is “D”.

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been completed, the results indicators do not provide sufficient evidence of outcomes to warrant higher than a “modest” rating. Budget execution rates are still likely to be outside the target range and the follow up to the two distressed commercial banks is not clear. Finally, the PD stated expected results that were largely beyond the scope of the program (section 2.3) and for which there were insufficient corresponding results indicators. The ICR confines its outcome rating to the assessment of the evidence for the achievement of the PDO, and treats these additional expected results as an overreach that impacts the quality of program design.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 59. One of the main accomplishments of the program was to support a successful fight against a deadly disease that struck mainly poor people. There were 14,089 confirmed cases of Ebola in Sierra Leone, which resulted in 3,955 deaths. These numbers would have been much higher were it not for the financing and support to hazard workers. Given the obvious adverse economic and poverty effects stemming from the Ebola crisis, some positive poverty effects could be attributed to the program’s role in helping to bring about a resolution of the crisis. 60. Large numbers of women were involved in the campaign against Ebola and many benefited from the campaign. Although not officially recorded, it was reported that about half of the frontline emergency workers were women who received hazard payments (as indicated by partial lists of workers in the audit reports for the payments system). Women also bore a higher risk of infection in caring for children and in giving birth. The latter posed a particularly high risk during the epidemic. To the extent that the program was able to keep emergency workers on the job, women are likely to have benefited disproportionately. 61. The improved transparency provides a degree of assurance that less government resources are wasted, presumably leaving more to be used for public services. The program aimed at several significant economic areas, banking and mining, that could have a significant, positive budget impact. It also aimed to improve budget execution, though not successful. Efforts in these areas shine light on where money is going and how much, which is the first step in saving public resources. (b) Institutional Change/Strengthening 62. The Ebola response part of the program had modest aims with respect to institutional strengthening. The program was strong in implementing a successful payment system under emergency circumstances. If a similar emergency should arise in the future, the country is likely better placed to deal with it, though with some reservations (section 4.). One institutional feature that has been introduced is the role of the ONS as the central agency for coordinating an emergency response. This ONS role is for national emergencies that are beyond the capacity of the MoH. 63. On the financial management and transparency side, the government took small steps in the right direction. These were small steps but important ones which declared that the government intended to improve transparency of big players in the economy such as the two biggest commercial banks and mining interests. There seems to be a commitment to go further,

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but improved transparency measures will require sustained efforts to become fully engrained in the government’s way of doing business. (c) Other Unintended Outcomes and Impacts (positive or negative, if any) The large influx of international agencies also appeared to have had a positive effect on institutions in Sierra Leone. The country came to learn that it could be part of a coordinated response and that its key institutions, e.g., the MoH and the MoFED, along with tens of thousands of volunteers could be effective in combating the national emergency.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Not applicable.

4. Assessment of Risk to Development Outcome Rating: Significant 64. The rating is somewhat complicated to assign because a major achievement was to create a mechanism to ensure that emergency workers stayed on the job to overcome the Ebola crisis. That primary goal was achieved, and the country continues to benefit from that outcome. This system has now fulfilled its usefulness and is no longer operational. This part of the risk to development outcome would be considered low. The audit report on the overall management of funds by NERC in addressing the Ebola crisis, does point out some deficiencies that raise questions about how smoothly re-mobilization could occur in a future crisis. There is also risk in the areas of fiscal management and transparency where achievements, in some cases, will require follow up actions to sustain. The risk to this part of the program is significant. Though the TSA is steadily moving forward, there are questions regarding budget execution and in other areas discussed previously. Thus, the risk to the longer-term development outcome is considered to be significant.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 65. The World Bank helped design a credible hazard payment system for the Ebola response, though there were a few shortcomings on the fiscal management and transparency part of the program. As an institution, the World Bank was assisting in the crisis response through the Reproductive and Child Health (RCH) project and later the Ebola Emergency Response Project. It added to its annual budget support two prior actions to improve the Ebola response and, initially US$10 million from the CRW (above the standard DPO envelope of $20 million) plus $30 million in supplemental financing. The World Bank mobilized EEFSO rapidly to address the crisis. and had support from the highest levels of the Bank. The World Bank was

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the main funder of the response, including activities of other U.N. agencies. The Bank team faced some resistance in the Bank to initially maintaining the cash-based program, but explained that there was no viable alternative given the need to keep hazard workers working at the health clinics and that it would take time to establish electronic payments and verify workers’ identities in a systematic way. The contribution of the EEFSO should also be viewed in the context of other World Bank support to deal with the crisis so as not to exaggerate its impact. There were a few shortcomings. There was a lack of outcome oriented results indicators and provision for better follow up on the PFM measures. The PD also specified expected results that were beyond the scope of the program. 66. The Bank made the decision that, apart from the two prior actions that were specific to the Ebola epidemic, the longer-term policy and institutional reform agenda should not be suspended for the (uncertain) duration of the epidemic. Hence there was continued emphasis on public financial management and transparency, both areas of deep deficit. In retrospect, this was the right decision because it did not hamper the Ebola response, and while the achievements were mostly process oriented, nevertheless put the GoSL in a better position to implement and sustain deeper fiscal management reforms in the near future. Areas that originally featured in the program, but were subsequently dropped, included new public financial management legislation, procurement legislation and Public Private Partnerships legislation. The Bank maintained support to these areas through in, but not within EEFSO. (b) Quality of Supervision Rating: Moderately Satisfactory 67. The Bank team overall supervised well the implementation of both the Ebola crisis part of the program, but could have ensured better M&E. All actions were completed and most indicator targets were met, and most importantly, the program’s contribution to the response to the Ebola epidemic was effective. The World Bank also allocated more than US$500,000 in Bank budget for preparing and supervising the operation (as well as the Supplemental Financing), to ensure adequate resources during the national emergency. There were missed opportunities to help reinforce key reforms, including during the extended period for supplemental financing (from December 31, 2015 to June 30, 2016) with the epidemic coming under control, to sustain impact of the program on the fiscal management side, given that some targets were for single years and had been met one to two years earlier. On the M&E framework, the results indicators were rather weak because they related mainly to completed actions in several cases, rather than to actual outcomes. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 68. The program was tailored for the emergency context and was successful overall. With quality at entry and supervision rated moderately satisfactory, the overall rating for Bank performance is moderately satisfactory.

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5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 69. The MoFED strongly supported the program, particularly on the Ebola response side, and the GoSL performed well in a number of areas including establishing the National Ebola Response Centre (NERC) and providing essential communication to the public on the ongoing crisis. All actions and targets were substantially met and Ebola epidemic was defeated. There were a few shortcomings in MoFED’s performance which are discussed in its role as an implementing agency below. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory 70. The MoFED and MoH initially struggled in their responses to the Ebola crisis, but overall worked well with the wide array of institutions with the creation of the NERC and implementation of the hazard payment system. The successful outcome was the product of national and international institutions coming together with the MoH, along with the NERC, at the center. One shortcoming occurred in the district offices of the MoH which was the failure to provide names of health workers and volunteers (which was necessary for the fiduciary agent to do its job. This temporary obstruction was subsequently overcome with Bank intervention. Once the issue was resolved, BDO was selected as the fiduciary agent and the hazard pay system progressed satisfactorily. 71. The MoFED implemented all actions and met targets, but M&E could have been stronger. The strongest aspect of performance was in the reduction of agency accounts paving the way to the TSA. The weakest performance was mainly in the area of budget transparency with the MoFED website not clearly reporting budget information and budget execution data. This has been brought to the attention of the MoFED which has agreed to address the issue. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory 72. With government performance rated satisfactory, implementing agency performance rated moderately satisfactory, and outcome moderately satisfactory, the overall rating for borrower performance is rated moderately satisfactory.

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6. Lessons Learned 73. The EEFSO program provided a number of important lessons that could be applied in formulating DPOs to help respond to future health crises as well as more conventional lessons relating to fiscal management. 74. Lesson 1: Even in the case of a national emergency, it is possible to make progress in government fiscal management reforms. Despite the trauma of the Ebola crisis, the government, banks, mining companies, etc., all continued to operate. So, it was perfectly feasible to carry out certain actions that would put the government in a better position to carry out the next generation of fiscal management reforms. 75. Lesson 2: It is important to have a central command with strong authority to coordinate the many actors coming together to fight the epidemic. The establishment of the NERC was critical to the success of the Ebola response. The center was the location for planning all activities and coordinating the many agencies and NGOs involved in the crisis response. This centralized command was important to the implementation of the hazard payments system and an effective response to the epidemic. 76. Lesson 3: It is also helpful to have a lead development partner who lead the coordination of other development partners. The World Bank coordinated with the MDBS group, while also helping to fund efforts of UN agencies. Significant additional funding was also raised for the Ebola response. 77. Lesson 4: A fiduciary agent can play a critical implementation role in emergency contexts. The fiduciary agent, BDO, had local presence and could gear up for the practical, but essential, needs to verify payment to workers in hazardous conditions. Such an agent can not only ensure proper use of funds, but, more importantly, make sure that these workers actually get paid and stay on the job to sustain the crisis response. 78. Lesson 5: In emergency situations it is vital to consider practical project management issues, such as payment of workers. It might have seemed like a secondary issue in the midst of an Ebola epidemic, but simply ensuring that emergency workers are paid on time can be the difference between life and death. If people are not paid a premium and paid on time, they have demonstrated that they will not risk their own lives in helping to fight the epidemic. The EEFSO payment system helped reduce the incidence of strikes and thereby sustain the anti-Ebola effort. 79. Lesson 6: The existence of widespread mobile phone use offers an opportunity to convey funds to works in an emergency situation. The program exploited the prevalence of mobile use to replace cash payments to hazard workers. This innovative mode of transfer had the advantages of not having to carry physical cash to the districts and to be able to identify to whom the money was given, which reduced leakages. “Mobile money” also can be a viable substitute for formal banking where the latter does not exist. 80. Lesson 7: Results indicators should not rely just on completed actions, but should attempt to the extent possible, capture the outcomes of completed actions of the program.

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Completing audits or making data public are desirable activities, but a results framework needs to incorporate measures that cover the actual benefits of these actions. For example, it might have been feasible to measure the reduction in work stoppages as a result of instituting the payments system, which would have given a sense of real benefits from the program. Covering outcomes might also lead the design of the program to include better follow-up to help ensure that an outcome, not just a completed action, is achieved.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing agencies 81. The World Bank fundamentally agrees with the Borrower’s characterization of the benefits of the support to the hazard payment system. The ICR would like to have seen additional candid comment on the issue of sustainability of the fiscal management and transparency part of the program. (b) Cofinanciers (c) Other partners and stakeholders 82. Other development partners did not comment on the World Bank ICR. However, key partners were interviewed during the ICR mission and their inputs are reflected in the main text of this report.

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Annex 1 Bank Lending and Implementation Support/Supervision Processes

P146726 

(a) Task Team members 

Names Title Unit Responsibility/

Specialty Lending Cyrus Talati Senior Economist OPSPQ TTL Gregory Smith Senior Economist GMF13 Ismaila Ceesay Lead Financial Management Specialist GGO25 Yusuf Foday Economist GMF01 Errol Graham Program Leader AFCW1 Shunsuke Mabuchi Senior Health Specialist GHN13 Patrick Tete Sr Financial Management Specialist GGO25 Dora Harris Senior Program Assistant GSP01 Christine Makori Senior Counsel LEGAM Maiada Kassem Finance Officer WFALA Francis Ato Brown Country Manager AFCW1 Supervision Mamadou Ndione Senior Economist GMF01 TTL Richard Carroll Consultant GMF01 Main Author

(b) Staff Time and Cost

Stage Staff Time and Cost (World Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending 2014 11.16 140.75 2015 40.32 246.67

Total: 51.48 387.42 Supervision/ICR  

2017 0.00 28.24 Total: 0.00 28.24

Grand Total: 51.48 415.66

 

 

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P157333 (Supplemental Financing) 

(a) Task Team members 

Names Title Unit Responsibility/

Specialty Lending Cyrus Talati Senior Economist OPSPQ TTL Yusuf Foday Economist GMF01 Ismaila Ceesay Lead Financial Management Specialist GGO25 Sydney Godwin Financial Management Specialist GGO31 Judite Fernandes Program Assistant GMF01 Maiada Kassem Finance Officer WFALA Parminder Brar Country Manager AFCW1 Supervision Mamadou Ndione Senior Economist GMF01 TTL Richard Carroll Consultant GMF01 Main Author

(b) Staff Time and Cost

Stage Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending 2016 23.87 94.96

Total: 23.87 94.96 Supervision/ICR

Total: 0.00 0.00 Grand Total: 23.87 94.96

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Annex 2. Beneficiary Survey Results Not applicable

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Annex 3. Stakeholder Workshop Report and Results Not applicable.

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Annex 4. Summary of Borrower's ICR and/or Comments on Draft ICR

MINISTRY OF FINANCE AND ECONOMIC DEVELOPMENT

WORLD BANK’S EMERGENCY ECONOMIC AND FISCAL SUPPORT OPERATION

IMPLEMENTATION COMPLETION REPORT

 

1.0. INTRODUCTION

This report highlights the Government of Sierra Leone’s assessment of the implementation outcome of the Emergency Economic and Fiscal Support Operation (EEFSO) granted by the World Bank following the twin shocks arising from the outbreak of Ebola and the drastic fall in market prices of iron ore during the financial years of 2014 and 2015.

The report covers the programme scope, the macroeconomic impact, progress made in implementing the structural reforms, the overall impact on the economy, lessons learnt and the conclusion.

2.0. Programme Scope

After a successful conclusion of the series of three (3) Governance Reform and Growth Grant/Credit (GRGG/C) programmes with the World Bank in 2014, preparation and discussion for a new three-year programmatic series of development policy operations was at advance stage when the Ebola Virus Disease epidemic struck Sierra Leone. To address and stem the Ebola crisis and the sharp drop in iron ore prices, and therefore the challenges to the implementation of the Agenda for Prosperity (2014-2018), the World Bank Executive Directors approved a stand-alone Emergency Economic and Fiscal Support Operation (EEFSO) in the amount of SDR 20.6 million (US$30 million equivalent) including SDR 6.9 million from the IDA Crisis Response Window (CRW) for 2014, and a further supplementary financing in the amount of SDR 21.5 million (US$30 million equivalent) in 2015. The financing reflected a doubling of the amount originally planned in order to close the huge financing gap in the government budget occasioned by the twin shocks, whilst increasing the fiscal space available to government to implement its national Ebola response plan. The operation was anchored on a strong emphasis on budget management, reduction of fiscal risks and transparency and accountability for public resources. The choice of structural reforms for the operation was deemed necessary given the intense public debate on the perceived risks for transparency and accountability that was associated with the management of government funds during the Ebola epidemic.

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2.0. Macroeconomic Impact The Sierra Leone economy was moving into positive territory in 2014. The twin shocks: the Ebola outbreak and the sharp drop in iron ore prices, seriously rattled the socio-economy, and significantly eroded the progress made in the last twelve years, generating new and serious challenges for policy implementation and medium term economic prospects. Growth was suppressed as key growth drivers including agriculture, construction, tourism, transport, manufacturing, commerce and trade were adversely affected. The situation was further exacerbated by the financial difficulties that faced the two iron ore mining companies, triggering bankruptcy for African Minerals Limited (AML)’s and closure of the mines of London Mining Limited, thereby stunning the export sector. Consequently, real GDP contracted by 21.1 percent in 2015 from a decelerated projection of 4.6 percent in 2014, and a 5.3 percent growth in 2012 and 5.5 percent in 2013, respectively. Credit to the EEFSO and the recession of Ebola by the second half of 2015, non-iron ore real GDP grew by 1.4 percent.

Annual average inflation remained in single digit throughout 2014 and 2015. Inflation only rose to double digits in the second half of 2016 due to the depreciation of the Leone and upward adjustment of pump prices of petroleum products. Inflation rose to 15.3 percent in November 2016, attributed to the depreciation of the exchange rate. The implementation of sound economic policies combined with support from the World Bank and other development partners, especially during and after the Ebola epidemic, mitigated the impact of Ebola on the Government budget and the external balances. Growth has since resumed in 2016.

The fiscal position was very challenging. The disruption of economic activities and the resultant contraction of the economy adversely affected domestic revenue collection. The fiscal position weakened in 2015, mainly due to higher-than-budgeted expenditures on Ebola-related interventions. The fiscal deficit excluding grant widened to 9.6 percent of GDP from 8.2 percent in 2014, and the deficit including grants deteriorated moderately to 4.4 percent of GDP in 2015 from 4.0 percent in 2014. Government had few options to tackle between needed revenue mobilizations to pursue the implementation of the Agenda for Prosperity versus high spending pressures emanating from the spread of Ebola. EEFSO resources helped to narrow the huge financing gap as a result of weakening revenues.

The gradual recovery in the non-iron ore sector coupled with funds received under EEFSO helped domestic revenue remain in line with programme projections. The recovery of the economy and strengthened tax administration resulted in an improvement in revenue collection to 12.2 percent of GDP in 2016. Domestic revenues are projected to reach 11.8 of GDP in 2017 following imposition of GST on electricity and removal of explicit subsidies on fuel; and the introduction of an excise duty on cigarettes.

Government expenditures were geared towards achieving the government’s development agenda. Expenditures averaged 19.0 percent during 2014-2016 largely reflecting the need to address the pressure related to health and social programmes to curb Ebola and the increase in

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capital expenditure during 2015. The non-disbursement of the World bank budget support for 20167 contributed to the accumulation of arrears owed to suppliers in 2016, and compelled government to request for a bridge loan from BSL. Thus contributed to the growth in Base Money estimated at 23.9 percent, with adverse implication for inflation.

Exports were led largely by mining activities. The closure of the two key iron ore mining companies led to a 15.4 percent drop in exports in 2014 and by 55.4 percent in 2015. Exports are estimated to recover by 18.8 percent in 2016 driven due to the resumption of iron ore mining in April 2016, increased production of other minerals, timber and agricultural commodities.

Imports soured during Ebola. Imports declined by 19.9 percent in 2013 as the mining projects completed their investment phase. Imports grew by 4.7 percent in 2014 largely due to Ebola-related imports but fell by 18.1 percent in 2015 as economic activities slowed down including the cessation of iron ore mining. Imports are estimated to grow slightly by 0.6 percent in 2016, driven by the resumption of iron ore production and related need for machinery and petroleum products. The trade deficit widened further to US$765 million in 2015. The recovery in exports in 2016 caused a slight improvement in the trade deficit to US$664 million.

Official transfers in the form of budget support and project grants increased to US$703 million in 2014 from US$51 million in 2013, owing to the increased donor support to fight Ebola. Ebola-related transfers amounted to US$564 million in 2014. Official transfers fell to US$350 million in 2015 and to US$ 208 million as Ebola support grants decreased to US$222 million and US$162 million in 2014 and 2015, respectively.

The current account deficit improved to 20.5 percent of GDP in 2013 from 34.3 percent in 2012 and subsequently improved to 16.3 percent in 2015 largely reflecting increase in transfers mainly as support toward the fight against Ebola. The current account deficit is estimated to deteriorate modestly to 18.3 percent in 2016.

The exchange rate faced serious challenges during 2014-16 due to a combination of factors including the uncertainty created by Ebola and the reduction in foreign exchange in the market relative to the demand following the sharp drop in exports. The monthly average exchange rate between the Leone and the US dollar depreciated by 13.5 percent in December 2014 and 13.4 percent in December 2015 compared to the same period a year earlier. The Leone depreciated by 13.8 percent in 2014 and 13 percent in 2015. As a result of the lingering effects of the shocks, the exchange rate depreciated by 29.1 percent at end 2016.

Reserves coverage performed much better than expected. Increasing from US$ 420 million or 3.2 months of imports cover in 2012 to US$ 473 million or 3.4 months of imports in 2013 to US$580 or 4.6 months of imports in 2015 the external sector improved. The main reason for this increase was the significant level of external aid in support of the fight against Ebola. Foreign reserves are estimated at US$580 million, equivalent to 3.7 months of imports cover in 2016.

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Monetary sector developments have been heavily influenced by the economic impact of the Ebola and drop in iron ore prices. There was an increase in both private sector credit and net foreign asset. The Monetary Policy Rate, which was kept at 10 percent in 2014, was reduced to 9.5 percent in March 2015, in order to support the post-Ebola recovery.

3.0. Progress in Implementation of Structural Reforms

Significant progress was made in the implementation of certain critical reforms. The budget management system was strengthened and the fiscal risks heightened by Ebola reduced by ensuring that hazard payment was done through electronic means, requiring recipients to have photo identification and to possess a contract. Despite the needed technical assistance could not be secured due to travel restrictions imposed on the outbreak of the Ebola, the final draft of the Public Financial Management Bill, replacing the Government Budget and Accountability Act, 2005, was gazetted and submitted to Parliament on the 27th August 2015 for enactment. Government appointed an auditing firm for two years to ensure that due diligence on all expenditures is carried out. The fiduciary agents worked closely with NERC.

The establishment of the Treasury Single Account (TSA) and the associated infrastructure and platform to support it was firmly secured. Connectivity was established between the Accountant General’s Department (AGD), Bank of Sierra Leone (BSL) and all commercial banks to facilitate the process, with plans to go live by end-December 2015. A Ministerial Committee to oversee the implementation of the TSA was established. In an effort to sustain the transaction processing and payments of MDAs through the Integrated Financial Management Information System (IFMIS), power systems were upgraded with a newly installed inverter to ensure clean electricity supply to IFMIS. The AGD implemented the Electronic File Transfer (EFT) system within the IFMIS to automate transfer of financial data between MoFED and BSL.

Following the pre-Cabinet briefing on the Tax Administration Bill held in July 2015, the draft Bill was forwarded to the Law Officers Department for final review, after which the Bill was gazetted and submitted to Parliament before the end of 2015.

Government prepared a Post-Ebola Recovery Strategy (ERS) that aims to put the economy back on the track of economic growth and stability. The Post Ebola Recovery Strategy was presented to development partners at the United Nations Ebola Conference in New York, and pledges estimated at US$867 million were made to support the implementation of the Ebola Recovery Strategy.

4.0. Overall Impact

The EEFSO was designed to support Sierra Leone’s efforts to bring the Ebola epidemic under control and provide the fiscal space needed by government to implement the Agenda for Prosperity. The financing supported efforts to maintain the delivery of essential social services particularly for the poor and those hardest hit by Ebola. The poor benefitted more from the resources provided

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under the EEFSO operations covering both rural areas and urban centers including the capital. The funds helped pay medical personnel salaries and also hazard payments, thereby ensured social stability, the maintenance of peace and security and a return to normalcy.

The significant level of financing of the budget under EEFSO increased our foreign reserves estimated at US$580 million in 2016, equivalent to 3.7 months of imports cover. Above all, the funds provided the supply of needed foreign exchange into the economy, whilst the iron ore mining companies on which government depended for the supply of 80 percent of foreign currency remained closed. This in turn, made the exchange rate remain relatively stable while cushioning the inflation and interest rates, and bolstering private sector-led investment activities. Thus, macroeconomic stability was maintained.

5.0. Sustainability

Sustained budget support from the World Bank coupled with the Post-Ebola Recovery financing and the resumption of iron ore mining will not only help in addressing the challenges of the present but also in the medium term, and mitigate the shocks arising from the unavailability of foreign currency in the economy.

6.0. Lessons Learnt

When an economy is largely dependent on mining revenues (about 80 percent foreign earnings), and turns out that other sectors in the economy are contributing less, a shock from falling prices could be devastating on the economy. Therefore, since 2016, government is taking steps to encourage economic diversification.

The challenges posed by weak public financial management, featuring low accountability and insufficient transparency result in lack of public and donor confidence and poor service delivery. To address the challenges and gaps in the management of public resources, Parliament enacted the 2016 Public Financial Management Act and the supporting regulations are completed.

The health crisis occasioned by the outbreak of Ebola, denoted the need for strengthened health systems. With support from the international community, well-equipped laboratory for tropical disease control has been established in Freetown, as well as significant investment in developing a national ambulance service, among several other investments to boost the health services.

7.0. Conclusion

Government remains thankful for the financing received under the EEFSO for FY2014 and FY2015, as it helped in mitigating the impact of the twin shocks and bridging the fiscal gap as well as stemming the fiscal risks associated with the financing of the Ebola epidemic.

There is need to sustain the reforms undertaken during the implementation of the operations, as fiscal risks do amplify both public and donor trust at times of national crisis or shocks.

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Ministry of Finance and Economic Development

April 2017

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Annex 5. Comments of Cofinanciers and Other Partners/Stakeholders None received.

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Annex 6. List of Supporting Documents 1. 2014 Review of the Progress Assessment Framework - Joint Aide-Memoire-Government of

Sierra Leone, African Development Bank, UK Department for International Development, European Union and World Bank, Multi-Donor Budget Support

2. 2015 Review of the Progress Assessment Framework - Joint Aide-Memoire-Government of

Sierra Leone, African Development Bank, UK Department for International Development, European Union and World Bank, Multi-Donor Budget Support

3. An evaluation of WFP’s L3 Response to the Ebola virus disease (EVD) crisis in West Africa

(2014– 2015) Evaluation Report January 2017 (Prepared by Konterra). 4. Financing Agreement (Emergency Economic and Fiscal Support Development Policy

Financing) between Republic of Sierra Leone and International Development Association, December 17, 2014.

5. Financing Agreement (Supplemental Financing for the Emergency Economic and Fiscal

Support Development Policy Financing) between Republic of Sierra Leone and International Development Association, December 8, 2015.

6. Hazard Pay for Ebola Response Workers (ERWs), New Policy, January 23, 2015. 7. Hazard Pay Incentive for the Period December 2014 to July 2015, MoFED. 8. Joint Aide-Memoire-Government of Sierra Leone, African Development Bank, UK

Department for International Development, European Union and World Bank, 2016 Review of the Progress Assessment Framework, Multi-Donor Budget Support.

9. Lessons from the Response to the Ebola Virus Disease (EVD) Outbreak in Sierra Leone,

May 2014-November 2015 Summary Report, A study initiated and conducted by the National Ebola Response Centre, with support from FAO, FOCUS 1000, UNAIDS, UNDP, UNFPA, UNICEF, UNOCHA, UN Women, WFP, and WHO.

10. Program Document for a Proposed Development Policy Grant in the amount of SDR 20.6

Million ($30 million equivalent) Including SDR 6.9 million (US$10 million Equivalent) in Crisis Response Window Resources to the Republic of Sierra Leone for the Emergency Economic and Fiscal Support Operation, December 10, 2014.

11. Project Paper on a Proposed Second Additional Grant from the IDA in the Amount of

SDR8.7 million (US$13 million equivalent) and a Proposed Grant from the Multi-Donor Health Results Innovation Trust Fund in the amount of in the Amount of US$5 million to the Republic of Sierra Leone for a Reproductive and Child Health Project – Phase 2, August 6, 2013

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12. Project Paper on Proposed Additional Grants to Republic of Guinea in the Amount of SDR48.4 million (US$72 million equivalent), Republic of Liberia in the Amount of SDR77.8 million (US$115 million equivalent), and the Republic of Sierra Leone in the Amount of SDR 66.3 million (US$98 million equivalent) from the IDA Crisis Response Window for the Ebola Emergency Response Project, November 10, 2014

13. National Ebola Response Centre (NERC)-Double Dippers Report, April 2016, BDO.

14. Report on the Audit of the Management of the Ebola Funds by the National Ebola Response Centre, November 2014-April 2015.

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Annex 7: Additional Details of the Ebola Crisis Response The table below provides final numbers on Ebola cases and deaths officially recorded for Sierra Leone: Cumulative Cumulative Cases Deaths Confirmed 8,704 3,589 Probable 287 208 Suspected 5,098 158 Total 14, 089 3,955 The Bank project supported operations of Ebola Treatment Centers and the procurement and distribution of an extensive list of goods and services critical to the response. This included personal protective equipment, essential medicines and hygiene kits, community surveillance and contact tracing mobilization of approximately 37,000 community health and social mobilization staff for door-to-door communications and case identification. It also supported safe burials, infection prevention and control materials and training at regular public and private health facilities, procurement of vehicles including ambulances and motorcycles and hazard payments and death benefits to approximately 40,000 Ebola response workers and workers at health facilities, deployment of 580 foreign medical staff from the African Union and other countries, food supply to nearly 800,000 quarantined and Ebola-affected households, support to cash transfer projects for the poor, seed distribution to farmers, and educational materials for schools. The last stage of this project will focus on the recovery of essential health services and is expected to run through 2017. Bank’s Additional Support to Combat the Ebola Epidemic A US$300 million West Africa regional disease surveillance and response project included a US$30 million component for Sierra Leone and was complemented by a Health Services Delivery and System Support Project (HSDSSP) of US$35 million as part of the post-Ebola Health Sector recovery effort. HSDSSP facilitates service delivery through community-level engagement with the implementation of a community health workers program and facilitation of public health aides to support environmental health and sanitation in districts as well as a facility-level strengthening through the introduction of multidisciplinary clinical teams and the establishment of a national ambulance service. The other component of HSDSSP focuses on strengthening the health system by supporting the development of human resources for health through the training of healthcare workers and supporting sector coordination and management at the central and district level. Covering ten countries, the regional surveillance project strengthens public health laboratory and disease surveillance capabilities throughout West Africa.

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Social protection support through both technical and financial assistance to mitigate immediate impacts on poor and Ebola affected families by providing critical social safety net support involving provision of cash transfers and labor-intensive public works to the poorest and Ebola-affected households. The program is currently providing cash transfers to 21,000 households in nine districts. In 2015, 12,000 youth in poor and Ebola-affected households are expected to participate in public works financed by this activity. The Bank is also supporting government efforts to ensure a coordinated approach in the social protection recovery efforts, as well as child protection and psychosocial support. Lessons pertaining to the Ebola Response from Lessons from the Response to the Ebola Virus Disease (EVD) Outbreak in Sierra Leone, May 2014-November 2015 Summary Report. The following are selected lessons learned from this report. Decentralization, community engagement, innovation and adaptation, and voluntarism emerge as strong themes from the focus group discussions and key informant interviews at all levels. Within these major themes are the myriad stories of challenges, failures, camaraderie, partnerships, patriotism and successes interwoven in a historical tapestry of a country’s fight against the world’s most widespread and deadly EVD outbreak. The following are key lessons founded on the said themes. Leadership and Coordination Leadership Leaders’ active involvement in the emergency response is crucial to provide guidance, mobilize resources and build the community’s trust and sense of ownership, in order to achieve the two main objectives of stopping and preventing the spread of EVD. As Chief Social Mobiliser, President Koroma epitomized some of the demands on leadership for social mobilization through regular broadcast of EVD messages and road trips to affected areas. In Kono district, the appointment of a paramount chief as the District Ebola Response Centre (DERC) Coordinator enhanced the relationships between the formal district response through various government and community-based structures, and ensured community cooperation and compliance with Ebola containment measures enacted in local bye-laws. Support services: logistics and supply chain and hazard payment Logistic hubs set up at the districts and jointly used by all partners during emergency response significantly reduce storage costs. A transparent incentive payment for ERWs should include valid lists of beneficiaries, a reliable cash transfer system, regular monitoring and timely reporting. The incentive payment for ERWs underwent major improvement during the third phase of the response. The NERC, with UNDP support, developed a list of beneficiaries based on selection criteria, and contracted mobile phone service providers to facilitate cash transfer and vendors to provide cash to beneficiaries. The cash transaction was recorded online and in the NERC’s financial report.

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Social mobilization Social mobilization is successful when there is mutual trust and respect between the leaders and their communities, which increase public participation and boost their sense of ownership. The surveys show that correct messaging and the leader’s involvement in field activities contribute to increasing community participation in the fight against EVD. Paying close attention to getting messaging right in order to deepen understanding and secure ownership is critical in addressing diseases or engaging communities in national development. The involvement of local leaders and key community members in social mobilization builds trust and collaboration. The district surveys show that financially supporting political leaders to conduct social mobilization at the districts did not work cell. Communities showed greater acceptance and cooperation when the paramount chiefs, religious leaders and other traditional leaders (e.g. from secret societies) were spearheading the campaigns at the district, chiefdom and household levels. Many respondents recommend provision of resources to paramount chiefs at the beginning of an emergency response. Coordination The relevant government ministries should take the lead in developing policies on emergency preparedness, response and mitigation, and ensure policy coherence across sectors and departments. A lesson from the EVD response in Sierra Leone is the risk posed by the absence of a national disaster risk management policy or contingency plan to tackle public health epidemics. The lack of policy coherence and actions when the EOC was in charge resulted in the rapid spread of the virus across the country. An independent coordination structure such as the NERC proved effective when there is an evident lack of operational capacity to mount an emergency response of the scale and magnitude demanded by the EVD outbreak. Its effectiveness is attributed to – among others –high-level political commitment and involvement, and technical expertise in operations and logistics; strong human and financial support from the international community; and sound leadership and management practices. Some survey respondents recommend using the existing structures and building the capacity of the MoHS or the Office of National Security (ONS), which is mandated for disaster risk management, for future emergencies. The NERC and DERCs’ command and control structure is at the core of effective coordination at all levels by providing the guiding principles for ground operations and facilitating information exchanges. The command and control structure incorporates various critical emergency response functions such as strategic planning, incident monitoring and reporting, information management and communications. The NERC’s pillar approach set coordination priorities on service delivery and cross-cutting issues. Five pillars – child protection and psychosocial support, case management, safe burials, surveillance and food security – provide needs-based services to the affected individuals,

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households and communities while the remaining four – communications, logistics, social mobilization and coordination – are supporting other pillars and sectors. All pillars worked with implementing partners that included community groups and international organizations. A decentralized command and control structure through the DERC bridges the gaps in response activities between the central government and the districts. The DERC provided timely response to an incident at the districts and chiefdoms, improved and streamlined information systems and cross-pillar coordination. However, district surveys show that some DERC Coordinators relied on decisions from the NERC, which often delayed implementation on the ground. Civil-military coordination The military support is crucial for instilling discipline and providing security and a sense of order in the communities affected by the outbreak. There is a strong need to further clarify at policy level the deployment of military assets to public health emergency response, including civil-military relations, reporting hierarchy and other principles. The Republic of Sierra Leone Armed Forces and Sierra Leone Police were deployed during the second and in the third response phases as part of the DERCs. Resource mobilization An emergency fund should be set aside in the state budget and shared with the districts and chiefdoms. One of the major challenges in the beginning of the EVD outbreak was procuring critical medical supplies such as ambulances and Personal Protective Equipment (PPE) and mobilizing people for surveillance and contact tracing, in the absence of funds. On the positive side, this contributed to the rise of voluntarism and community-driven resource mobilization. Some survey respondents agreed that emergency funds should be prioritized for and disbursed to local leaders such as the paramount chiefs to enable quick response. Transparent and accountable use of emergency funds build public trust and therefore encourage further support from domestic and international communities. Both the EOC and the NERC appointed fiduciary agents for monitoring and reporting of Ebolafunds. However, in the first two phases of the response, the funds utilization was not properly monitored and reported in the absence of a strong and reliable payment system, resulting in unaccounted spending. The incentive payment of Ebola Response Workers (ERWs) is an example where improving the system by using mobile phones to transfer salary speeds up the process and reduces the risk of double payments. Kono district provides an example of a good practice in transparency and accountability by announcing donation and fund utilization in the media. Media communication A crisis communication plan is needed to ensure that a crisis communication structure is active during an emergency, with key messages crafted and delivered to target audience in order to inform and encourage desired behaviours. At the start of the outbreak the local media reportedly spread information on Ebola infection which caused confusion, mistrust and chaos.

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Survey respondents point out the need to distribute the correct messages on Ebola infection based on evidence and use the preferred channel such as radio to reach out to communities in remote areas. Media and editorial trainings in emergency response and Ebola epidemic are recommended. A crisis communication plan should also include emergency hotline service such as the Ebola Hotline 117. Community support: provision of food and nonfood items, water and sanitation, psychosocial support and education Social protection programmes are needed to support the livelihoods of Ebola survivors, while orphans are registered, cared for, and provided with free education. As an example, the Ministry of Social welfare, Gender and Children’s Affairs and UNICEF provide cash support to survivors through the Rapid Ebola Survivor Safety Net programme. Psychosocial support should address the mental health of an Ebola survivor, such as distress, depression and anxiety.

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Annex 8: Letter from President of Sierra Leone to World Bank President Jim Kim

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Annex 9: Sierra Leone: Selected Economic indicators

Source: MOFED, BSL, WBG

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Est.

National Accounts (growth rates, % )Agriculture 6.0 13.3 6.7 4.0 3.5 4.9 3.8 4.6 0.8 2.0Industry 5.9 2.2 -10.4 -4.9 12.3 10.2 127.4 97.5 13.5 -74.1Services 1.2 2.3 8.1 4.1 6.7 7.4 6.1 6.2 2.0 1.3

GDP at market prices 4.2 8.1 5.4 3.2 5.3 6.3 15.2 20.7 4.6 -21.1Real per capita GDP 0.9 5.3 3.0 0.9 3.1 4.0 12.9 18.5 2.4 -23.3Annual average inflation (%) 9.5 11.7 -35.8 9.3 16.6 16.2 12.9 9.8 8.3 9.0

National Accounts (% GDP at current factor cost)Agriculture 51.7 53.0 54.7 56.3 58.2 56.0 56.7 52.5 49.9 54.8Industry 11.8 10.9 10.1 8.2 6.9 8.2 8.2 15.1 22.1 15.5Services 36.5 36.1 35.1 35.4 34.9 35.7 35.1 32.4 28.0 29.7

Gross domestic investment 10.9 9.7 9.1 9.2 9.6 30.7 41.5 24.7 14.0 12.3 Public investment 1.4 1.2 1.1 1.0 0.9 0.8 0.6 0.5 0.4 0.4 Private investment 9.4 8.5 8.0 8.2 8.7 30.0 40.9 24.2 13.6 11.9Gross domestic savings 2.0 0.4 -2.6 -4.4 13.4 -6.3 0.4 0.8 -1.4 -24.6Gross national savings 5.1 3.2 -1.2 -0.6 19.6 1.0 1.8 -6.5 7.8 -15.9

Balance of Payments (% GDP at current market prices)Current account balance (including current official transfers) -4.2 -4.2 -8.9 -6.3 -19.7 -44.7 -31.8 -17.5 -18.5 -15.5Current account balance (excluding current official transfers) -9.6 -9.4 -13.0 -9.0 -22.8 -48.1 -38.1 -21.4 -20.9 -16.5Gross Official Reserves in months of imports 4.6 4.3 4.4 4.1 3.4 2.4 3.2 3.4 4.3 4.8

Debt Indicators (end of period)Total Public Debt to GDP 102.9 42.2 41.9 44.1 45.2 44.0 37.2 32.2 34.5 40.6

External Public Debt 83.0 24.5 24.3 28.2 30.4 32.4 25.8 21.3 22.9 28.4Domestic Public Debt 19.9 17.7 17.6 15.9 14.8 11.6 11.4 10.8 11.6 12.2

Government finance (% GDP at current market prices)Current revenues 8.9 8.3 9.2 9.1 9.9 11.5 12.2 12.6 11.0 10.5Current expenditures 12.8 10.3 11.4 12.0 12.5 12.6 13.6 12.1 13.2 12.6

o/w wages and salaries 4.9 4.6 4.5 4.8 5.2 5.3 6.1 5.9 7.2 7.1Capital expenditures 3.8 2.7 4.8 5.4 7.7 9.0 8.2 6.3 6.0 7.2Overall fiscal balance excluding grants (commit. basis) -7.8 -4.7 -7.0 -8.4 -10.3 -10.1 -9.6 -4.9 -8.9 -9.6Overall fiscal balance including grants (commitment basis) -1.6 20.0 -3.5 -2.3 -5.0 -4.6 -5.5 -1.9 -4.1 -4.4External borrowing (net) 0.5 -20.7 1.9 1.9 1.6 2.4 3.4 1.6 1.3 1.5Domestic borrowing (net) 0.2 1.7 2.1 0.6 3.5 2.1 2.2 0.3 2.6 2.9

Monetary indicatorsBroad money (M2) (% annual growth) 19.6 27.4 24.8 31.5 29.5 22.2 22.4 17.1 16.8 11.4Credit to the economy (% annual growth) 17.8 18.5 39.4 56.8 45.4 31.5 21.8 -6.9 11.9 5.4Credit to the economy (in % of GDP) 3.4 4.1 5.5 7.2 7.7 7.5 5.8 5.5 5.2 4.9Velocity (GDP/M2; end of period) 6.3 5.7 5.3 4.5 4.3 4.4 4.6 5.1 4.6 4.1

Memo:GDP at current market prices (Le billion) 5,584 6,444 7,471 8,308 10,256 12,798 16,515 21,232 22,364 22,358Non iron-ore GDP at current market prices (Le billion) 5,584 6,444 7,471 8,308 10,256 12,768 15,386 18,074 20,216 22,297GDP at current market prices (USD million) 1,885 2,159 2,506 2,454 2,578 2,943 3,802 4,901 4,935 4,404Nominal average exchange rate (Le per US$) 2,962 2,985 2,982 3,386 3,978 4,349 4,344 4,333 4,532 5,076

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Annex 10. Timeline of EEFSO Related Events 83. Annex 10 provides a timeline of events for the Ebola crisis. Development partners mobilized ahead of the peak of the crisis, which was steadily brought under control from December 2014 onward. The Supplemental Financing to the EEFSO was effective as the crisis was winding down. This financing was essential to help close the financing gap which included obligations to U.N agencies that were active in the campaign against Ebola.

Timeline of Ebola Crisis

Date Event August 2013-April 2015 Reproductive and Child Health Project – P110535-ongoing as crisis hit March 25, 2014 First recognition of outbreak in Guinea-WHO April 2014 First recognition of outbreak in Liberia May 25, 2014 Outbreak observed in Sierra Leone July 2014 Crisis reaches 200 new cases per week September to December 2014

UN and other development partner involvement builds-WHO, UNFPA, WFP, UNICEF, UNOPS, World Bank, as well as DfID, AfDB, USAID, Red Cross, Save the Children, CDC and additional NGOs

September 24, 2014 Ebola Emergency Response Project – P152359 (Guinea, Liberia, Sierra Leone) effective, and additional financing P152980

November 1, 2014 NERC established November 2014 Peak of epidemic with 500 new cases per week December 18, 2014 EEFSO is effective November 7, 2015 WHO declares Ebola epidemic over in Sierra Leone December 17, 2015 Supplemental Financing to EEFSO is effective January 14 2016 End of West African Ebola Crisis officially declared June 30, 2016 EEFSO close

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MAP