The International Monetary Fund (IMF) Technical Assistance Report on Sierra Leone’s Governance and Corruption Diagnostic reveals that limited institutional capacity, weak accounting systems and financial constraints limits timely audits despite the existence of a legal framework which mandates monthly and quarterly reporting by State-Owned Enterprises (SOEs).
The report noted that as a result of the above challenges, the Ministry of Finance (MoF) struggles to conduct timely financial oversight and manage fiscal risks.
“This is especially critical as SOEs’ loans have reached US$36.5 million at the end-2023, with heavy concentration in two major SOEs,” the IMF emphasized.
The report maintained that transparency deficits in SOE financial reporting pose major risks to fiscal discipline and increased susceptibility to fraudulent activities.
The report also noted that weak financial reporting practices, coupled with delays in the submission and auditing of financial statements of SOEs, hinder effective oversight and monitoring, adding that many SOEs fail to submit their annual financial statements on time, with some not submitting them at all.
“Additionally, the absence of a performance monitoring framework and lack of an integrated digital solution further complicate fiscal risk management, allowing inefficiencies to persist unchecked,” IMF stated.
