With a per capita GDP of $134 and expenditures which far outweigh revenues, Sierra Leone has recently been the recipient of debt relief under the Heavily Indebted Poor Countries Initiative (HIPC). Under this initiative, Sierra Leone is promised $950 million over a twenty year period from the World Bank and International Monetary Fund (IMF) with the understanding that they will abide by financial and economic programs administered by both organizations. .
Although Sierra Leone's natural resources are plentiful, an eleven year civil war has left the economy in a state of turmoil. The resources, which include diamonds, gold, titanium ore, and bauxite, are not traded with other countries through the government, but rather through black market techniques executed by rebels who still reside in the country. Consequently, Sierra Leone faces drastic inequality in income distribution, leaving many citizens in extreme poverty. The World Bank and IMF saw that economic well-being in Sierra Leone largely depends upon the receipt of outside aid and agreed to administer the twenty year loan in an effort to help stabilize the country.
In order to continue receiving this aid, Sierra Leone must show development in the fields of education, health, and improvement of rural areas. The spending plan will be guided by Sierra Leone's Interim Poverty Reduction Strategy Paper (I-PRSP).
The World Bank and IMF were persuaded to support the debt relief following strong reforms in the government's policies on tax, trade, spending, and management of the country's currency. The reforms were instituted upon the end of the civil war. Peace is hoped to be attained through disarmament, demobilization, and reintegration programs. This recovery program and peace efforts have been aided by a United Nations Peace Keeping Force (UNAMSIL) since 1999. The IMF and World Bank saw these actions as an honest attempt to improve the state of the country.
