IMF Mission Lashes SLPP Govt

Finance Ministry’s clumsiness Exposed

The International Monetary Fund (IMF) Governance and Corruption Diagnostic (GCD) mission, which visited Sierra Leone from February 10 to 21, 2025, has unveiled a traumatic picture of corruption, money laundering, and systemic governance weaknesses. The report in question provides a comprehensive analysis of the factors persistently hindering the nation’s sustainable economic development, and highlights critical areas that require urgent attention.

At the core of the GCD mission’s findings are severe structural deficiencies within key state functions. The report documents a range of corruption accelerators that continue to undermine the country’s governance framework, emphasizing the limited independence of essential state institutions. Such fragility leaves a significant gap in the legal and regulatory frameworks intended for managing and overseeing public resources, thereby allowing malpractices to flourish unchecked.

The GCD report emphasizes a troubling lack of a clear, rules-based system designed to ensure accountability and integrity within public administration. This absence not only fosters an environment of impunity for officials engaging in misconduct, but also erodes public trust and raises alarms about access to fair and efficient dispute resolution mechanisms. Citizens increasingly find themselves doubting the integrity of public institutions, leading to a crisis of confidence that can stymie civic engagement and economic participation.

Moreover, the independence of oversight institutions is critically constrained, severely undermining the legal and institutional frameworks related to Anti-Corruption and Anti-Money Laundering (AML) efforts. The report outlines how a legacy of impunity, coupled with weak accountability frameworks and persistent challenges in enforcing anti-corruption laws, creates a fertile ground for corruption to thrive. Without robust monitoring and enforcement mechanisms, the risks associated with financial crimes have escalated alarmingly.

Particular concerns arise regarding politically exposed persons (PEPs), who remain inadequately monitored. The report details ineffective sanction applications, minimal suspicious transaction reports, and severely limited resources dedicated to investigating and prosecuting money laundering offenses. These deficiencies contribute to a climate where corruption risks are significantly heightened and continuously bolstered by pervasive fiscal governance weaknesses.

One of the sectors most affected by these governance flaws is mining and minerals. Discretionary incentives and opaque contracts compromise good governance, as fiscal negotiations and tax concessions for investors lead to substantial challenges in Sierra Leone’s revenue administration. As a result, the country finds itself overly reliant on fees and trade taxes, resulting in questionable revenue performance. Existing practices around mineral licensing and contracting create vulnerabilities, enabling unfair revenue-sharing deals that disproportionately favor private interests, thereby compromising state welfare.

The operational inefficiency of State-Owned Enterprises (SOEs) further exacerbates this situation. Many SOEs struggle with losses, placing undue strain on public finances and limiting government expenditure on essential services. Quasi-fiscal activities carried out by these enterprises are not adequately addressed within the budget, leaving a significant gap in financial sustainability. This dependency on government support is unsustainable; underperforming SOEs impose severe fiscal pressures that divert crucial funds away from public services and necessary infrastructure projects.

Compounding these issues is the observation made by the GCD mission regarding weak cash management practices within the Ministry of Finance. Ad-hoc payment decisions increase corruption risks, particularly concerning the clearance of arrears. The lack of a clear payment prioritization system creates opportunities for arbitrary decision-making about which creditors to settle first, opening avenues for corruption and favoritism.

Significantly, the GCD mission flagged potential corruption risks related to the misallocation and diversion of funds managed by the Ministry of Finance. Payments meant for settling arrears may be redirected under political pressure, leading to inflated costs and discretionary exploitation that heightens corruption risks. Fragmentation in project selection processes and politicized budgeting further complicate matters, undermining effective public investment governance.

The absence of a unified database to consolidate essential information on public investments, hampers informed decision-making. With no comprehensive pipeline of appraised and prioritized projects, necessary criteria for making investment decisions are sorely lacking. Current processes allow for the circumvention of selection and appraisal requirements, enabling politically motivated budgetary decisions that hinder balanced development across sectors, particularly in critical areas like infrastructure.

Among the myriad governance weaknesses identified, the GCD mission highlighted several major issues: the limited functional and financial autonomy of key oversight institutions, questionable appointment practices for state officials, ineffective access-to-information frameworks, and poor transparency and accountability standards within state institutions. Addressing these fundamental weaknesses is imperative for strengthening governance and curbing corruption in Sierra Leone.

The mission’s findings unequivocally advocate for a concerted effort to enhance governance structures, underscoring the necessity of establishing resilient institutions capable of effectively combating corruption. Authorities must recognize that tackling corruption is not merely a bureaucratic obligation, but an existential necessity that threatens the nation’s development trajectory.