Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698829938692.pdf (Sierra Leone)
A"6ft-q1 , \ tI DE PROGRAMME ID No.

: P-SLKA0-016 GRANT No.

: 5900155015251 PROTOCOL OF AGREEMENT AMONGST THE REPUBLIC OF SIERRA LEONE AND AFRICAN DEVELOPMENT BANK AND AFRICAN DEVELOPMENT FI]ND (As Administrators of the Transilion Support Facility) FISCAL CONSOLIDATION SUPPORT PROGRAMME (FCSP) P*,\L 's t- t F L l x!

: I I PITOTOCOL OF AGREEMENT ITISCAL CONSOLIDATION SUppoRT PROGRAMME (FCSP) P ROGRAMME ID: P-SL-KA0-0I (, GRANT No.
: 5900155015251 OF AGREEMENT (the 'Agreement, day of lItk l,ltOTOCOL ) is entered into tllis ,, _*3gtr" between the Republic of Elont Loonc (tho "Recipient') on one hand and the AFRICAN DEVELOPMENT BANK (lhe t'llank') ond the AFRICAN DEVELOPMENT FLIND (the.Fund,) (the Bank and the Jrund arg horeby collectively referred to as the "Fund,) as administrators of the lltANSlllON SUPPORT FACILITy (rhe ..TSF,,) on the other hand.
t : I J I -: E -I WIIIIIIDAS: (A) The TSF was established by the Boards of Directon of the Bank and the Fturd on 2g March 2008 to provide assistance to Regional Mernber Countries in transition and through the TSF Supplemental support window @ lar I), provides resources that are rupplomental to a Regional Member country's performance-based allocation by the Fund; (llt 'l'hc ltecipient has requested the Fund acting as Administrator of TSF, to assist in tho financing of the Fiscal Consolidation Support Programme (FCSP) as firther dorcribed in Schedule I (A) (Progromme Purpose and Objectives) of thts Agtooment (the "Programme") and the Fund, acting in such capacity, has agreed to '{lttond a grant to the Recipient from the TSF pillar I resources, in the amormt fied in Section 2.01 Q4momt) of tr-ris Agreement on the terms and conditions set Or referred to in this Agreement; .
:,Rccipient's Ministry of Finance shall be the Executing Agency for the (D)t:tlfirg Roclpicnt has declared its commihnent to the exec,tion of the programme; and ffi "" Thu Fund has agreed to provide the grant on the basis, inter alia of the prior Actions qrltlch the Recipient has already taken under the programme and which are further doscribed in Sched,le 7@) (prior actions before presentation to the Fund's Board of Dlrectors) to this Agreement.
NOW TI{EREFORE, the parties hereto hereby agree as follows: @nL .

(\ ARTICLE I GENERAL CONDITIONS- DEFIMTIONS section 1.01.

General conditions.

Tlne Generar conditions Appricabre to protocols oJ Agreement for Grants of the African Derelopmenr Fund dated Februory 2009 as amende.d from time to time (the "Genem.l conditions") constitute an imegral part of this Agreement.

section 1.02' Definitions.


Unless the context otherwise requires, the capitarized terms used in this Agreement have the meanings ascribed to them in the General conditions or in Schedule lll (Definitiotts) to this Agreement.

section 1.03. schedules.

The schedules to this Agreemenl form an inte$a.r part of this Agreement and shall have effect as ifset out in firll herein.

ARTICLE II TIIEGRANT Section 2.01.

Amount.


The Fund agrees to extend to the Recipient, on the terms and conditions set forth or referred to in this Agreemen!

a grant ofan amount not exceeding the equivalent of Filieen Million Unirs of Account (uA 1s,000,000) (the "Grant'), to finance part ofthe 2019 budget deficit of the Recipient.

ARTICLE III ENTRY INTO FORCE AND DISBURSEMENT Secrion 3-01.

Entrv into tr'orcc.

This Agpeement shall eutcr int.

force on the Date of the Protocol of Agreement.


Section 3.02.

Disbursement.

The proceeds of the Grant shall be disbursed to the Recipient subject to the provisions of: (a) Article r\/ (Disbursement of the Grant) of the General condidons; (b) the Disbursement Handbook; (c) the Disbursement Letter; (d) Article III (Entry into Force and Disbursement) ofthis Agreement; and (e) such additional instmctions as the Fund may specift by noticc to the Recipient.

section 3.03.

Disbursement Tranche.


subject to section 3.04 (conditions precedent to Disbursement of the single Tronche) of this Agreement, the Grant shall be disbursed to the Recipient in a single tranche.

Section 3.04.

Condition Prcccd ent to Dis burseurcut uf the Sinele Tranche.

ln addition to the provisions of Section 3.01 @ntry into Force) of this Agreemen!
the obligation of the Fund to make the disbunement of the single tranche of the Grant shall be subject to the satisfaction of the following mndition by the Recipient A^{- _, _ S (u) Submitcion of evidence of the opening of a USD denominated accowrt (the "special Acoounl") at the Bank of Sierra t^eone ("BSL') for the deposit of the proceeds ofthe (trunl for onward lransfer into the Consolidated Revenue Fund at the BSL, in form illd tuhtanoo satisfactory to the Fund.
tlo+thn 1,05, Iton.Illlqlblc lrxpcnditurcs.

The Recipient undertakes that the proceeds of lln (lmnl flmff not bo ussd to finance any of the items listed in Schedul e 17 (Negative List) to tlrh AgruomOnt, lf lho Fund dctermines that at any time an amount of the Grant was used to nHkc a plyflgnt for o Non'Eligible Expenditure, the Recipient shall, promptly, upon notice lhtn tlrc llund, rcflrnd an &moun1 equal to the amount of such payment to the Fund.
Attlottntl nefundod to thc Fund upon such request shall be cancelled.

Scctlon 3.0(r. Cloglns Datc.

For purposes of Section 5.03 (Cancellation by the Fund) of the ( lonorul Conditions, the Closing Date shall be 28 Februarv 2021, or such later date as shall lN ngrcod upon in writing between the Recipient and the Fund.

ARTICLE IV LiNDERTAKINGS SeutlOn 1,01, Thc Rccipient declares its commitrnent to the objectives of the hogramme.
To tlill fnd, tlto Roolpicnt shall carry out the Programme, and shall cause the Executing Agenoy, l0 0ln?

oUl lhc Programme, in accordance with the provisions of Article \Il (Project lnghmenmlon - Cooperation and Information) of the General Conditions and this As!

]!trnt, ARTICLEV ADDITIONAL REMEDIES OF THE FI]ND , Olhcr Events of Susnension.
For the purpose of Section 5.02 (1) (D Sutpension) of the General Conditions, the other events of suspension of of any circumstance arising which in the opinion of the Fund interferes I to iutedere with rc succcssful complction of the Prograrnme or t}re ll onl of its purposes.

wl l,OZ, Othcr Evqnts of Calcellation.
In additi on, to the events in Section 5.03 fit€tlOn lflAnAellatlon by the Fund) of the General Conditions, the other events of cancellation of lln OfAnt consisl of any event specified in Section 5.01 (Other Events of Suspension) of lhlt Agrocment which has occurred and is continuing for a period of thirry (30) days after notlcc ofthc evcnt has been given by the Fund to the Recipient or such later date as shall he ngrced upon in writing between the Recipient and the Fund.

P'J (.
P'J (.

--r- A ARTICLEVI PROGRAMME REPORTING Section 6.01. compretion Report.

The Recipient shail prepare and submit to the Fund a completion Report, pursuant to Section 7.0g (Compretion Report) of rheGeneral conditions, not later than six (6) months after the end of the programme.

ARTICLEVII FINANCIAL MANAGEMENT Section 7.01.

Internal Contror.
Internal Contror.

The Recipient shall maintain or caulie to be mainlained proper records and procedures ia accordance witl the provisions of Section 7.07 (Accounts, Records and Audit) ofthe General Conditions, as applicable.

Section 7.02.

Financial Audit.

(a) The Recipient shall cause the Ministry of Finance to be responsible for the financial managemenl 0f the Program.
The use of the frxrds which will contibute to covering the financial gap for the fiscal year 2019 shall be compliant with the instit,tionar, legal and regulatory frameworks of the Borrower's public financiar 6anagement systems.
(b) The Recipient shall submit to the Fund, the audit report on the consolidated Revenue Fmd (CRF) of Sierra [,eone for 2019 and, thereafter, for each year of the program, following approval of the audit report by the parriament, but in any case not later than six (6) montlrs alter the end of the fiscal year audited.
(c) The Recipient shall cause the Audit service of siena L.eone to conduct an audit of the flow of fimds of the Program from the USD denominated account (the "Special Account") at the Bank of Sierra kone (BSL) to the cRF at the BSL in accordance with terms of reference approved by the Fund.

The audit report will be submitted to the Fund no later than six (6) months after the end of the liscal year during which the disbursement occurs- ARTICLE VIII AUTHORIZED REPRESENTATI\'ES.

DATE.
DATE.

ADDRESSES , section 8.01.

Authorized Representatives.

The Minister of Finance or such other person as the Minister ol'Finance may designate in writing shall be the authorized representative for the purposes of Arti cle w (Miscellaneous provisions) of the General conditions.

w -4- N ; i l I I t I t I I I I t $:t'llrrtr ti.02, Dtlc of lhc Prolocol of Asrecment.

For all purposes of this Agreement, the rlntr.

tltcrrol'rlroll bc that appearing in the preamble hereof.

Herrlhtrr 11,03, Addrcsscs.


The following addresses are specified for the purposes of Article lX I lt l,wl laneous.Prnvisions) of the General Conditions: r( tJ rl t 1. lL .

( 1. ,r rF r- )e ( 3 1, )L Itrr llrt, lkr,lplontr Mail Address: Ministry of Finance Treasury Building George Street Freetown REPUBLIC OF SIERRA LEONE T el: (232) 7 6 61 12 25 E-mail : info@mofed.

eov.sl Allr,nllon: Minister of Finance Itur llro ltrndt Headquarters MaiI Address: African Development Fund 01 B.P.

1387 Abidjan 0l REPI.
]BLIC OF COTE D'TVOIRE Tel: Q2s)2O.26.M.44 AllrEllon Director General West Africa Regional Development and Busincss Dclivcry Office Country Office Mail Address: African Development Bank Group l3 I-amina Sankoh Street 5th & 6th Floors, Bishop Building Freetown REPUBLIC OF SIERRA LEONE Ailg[11oil Country Manager Sierra Leone Country Office h"rC -5- a $ IN WTNESS WHEREOF the Recipient and the F,nd, each acting through its authorized reprcsentative, have signed this Agreement in two (2) original cowterparts in Engrish on the date appearing in lhe openilg sentence oft}is Agreement.
|+tets > FOR THE REP{IBLIC OF SIERRA LEONE JACOB S MINISTER OF FINANCE FOR A-FRICAN DEVELOPMENT BANK AND AFRJCAN DEVELOPMENT T'UND (As Administators oJ the Transition Support Facilily) hr^^'fu PENINAHKARIUKI COTINTRYMANAGER SIERRA LEONE COTJNTRY OFFICE -6- SCHIXDULD I Pnocn4Mt4a DrlscRrPrroN tA ) l'r'ocrumme Purnose rnd Oblccllvur (l) ( ll) l'urnosc: This is a gcncral budgct support grant.
Oblcctives: The overarchin g goal of the Programme is to spur fiscal consolidation in Sierra Leone through increased resource mobilization, pro- Poor budgel allocation (especially for basic and secondary schools, and glrls education) and strengthened budget execution oversight Thc objcctives of the Programme include improving revenue collection and cnhancing the efficiency and transparency ofpublic expenditure.
1'hc Programme constitutes the first phase of the Programme, and consists of tlrc following parts: (a) onent I: Im rovln Revenue Mobilization and Dcbt ogcment trhis component comprises of the following activities: (i) adoption of thc Extractive Industries Revenue Act; (ii) operationalization of the Rcvenue Mobilization Strategy in 2019 through the: (A) adoption of an Implementation Action PIan; and (B) establishment of the Tcchnical Task Force; and (iii) development ofa Strategy to avoid the lccumulation of new domestic anears and a medium term settlement plan in 2018.
The expected outcomes of this component are improved tevenue mobilization and improved debt management.
(i' ) Comoonent II: Strenethenine Public Erpenditure Management Dfliciencv and Transparencv The reforms to be supported in this component include: (i) operationalization of the wage bill rurnagement strategy; (ii) increasing of budget allocation to basic and secondary education (including support to girls' education; (iii) improving public procurcmcDl systum and practices; atd (iv) sLrcngthening budget oversight.
The main outcomes expected fiom implementing this component are improved budget allocation and execution and increased transparency in public financial management.

I I I -l I _i :f .f (lli) Outcomes: The expected outcomes of t}te progtamme are as follows: (a) Increasedrevenue mobilization; (b) Improved debt management; and I ia^:( & (c) Improved alignment of budget allocation with Govemment priority spending.
(B) Frior Action s before Presen tation to the Fu nd's Board of Directors The prior actions taken by the Recipient under the programme are summarized in the table below: S/N Policy Measures I Adoption of the Extractive Industries Revenue Act (EIRA).

2 3 4 5 6 Operationalization of thi Revenue Mobilization Strategy through: (a) adoption of Irnplementation Action Plan; and (b) establishment of the Technical Task Force.

Increase education by 20%.


budget allocated to basic Adoption of the strategy to avoid accumulation of new domestic anears and a medium-term settlement plan.

sion of20l6 and 2017 Submis Auditor General's Reports on the Public accounts to Parliament for approval.

Appoiutment of the independent procurement jury panel in charge of complaints/disputcs.

Required Evidence Submission of the Letter fiom the Ministry of Finance (MoF) transmitting to the Bank a copy of the Extractive Indushies Revenue Act, 201 8.
Letter from the MoF transmitting a copy of the Revenue Mobilization Strategy Work Plan and confirming the establishment of the Technical Task Force as well as listing the names of its members.

Letter from the MoF transmitting to the Bank a copy of the Supplementary Govemment Budget and Statement of Financial Policies for Financial year 2018.

Letter of the MoF transrnilting to thc Bank a copy of the Strategy Notes on the Treatment of Domestic Supplien and Contractor Arrears.
copy of the letter from the Auditor A General to the Clerk of parliament submitting the 2016 and 2017 Auditor General's Reports on the public accounts to the Parliament for approval.
e Ministry of Finance Letter lrom th confirrning the appointrnent of the independent procuremenr jury panel members- F"'V- { -8- nity L I l- i i I ,' I 4 n l, fr 0, ULE II IST or activily deemed illcgal undor hott ol oonventions arrd agreementu, mutcrials, with the exceplion of mcdioul I for which the Fund considcrt the ly shielded.

ded asbestos fibres or other producte llruduqtlon o counlry law!
O ,--',1 'n":5r l)r'oduction of, or tmdi n:ulcrials and q rud ioacti ve sourcc t0 llnrduction ol or trodc I wlth bonded asbestos 0!

l\'oduction of, hnrmful substances subj olorelficd by the World (ltlghly hazardous) or II (modoil gals, chemical compounds and othcr phase-outs or bans, including pesticidcs as Class Ia (extremely hazardous), Ib Prcduotlon of, or trade in, omnodoplollng rubstances subject to international pharcout.

::' .
::' .

llsdo in wildlife or wildtifo produolt rogulated under the Convention on lnl0mational Trade in Endangcrcd Spoclor of Witd Fauna and Flora.

IrltOhasc oflogging equipmenl for use ln unmanagcd primary tropical rainforests.

SfOdUctio, or activities involving harmful or cxploitative forms of forced labourr {d/Or harmru child labouP as defincd by national regulations and intemational {-lnduas.
.,i.- 00Ods and services supplied under a contract which any national or international {lnnncing institution or agency other than the Fund has financed or agreed to llD0nce, or which the Fund has financed or agreed to finance under another grant or loon 10.

Ooods intended for military and/or paramilitary purposes.

lirrcod labour means all work or service, not voluntarily performed, that is extracted &om an individual unrlcr threat of force or penalty.
I lnrrnful child labour means the employmeot of children thar is economically exploitive, or is likely to bc hazardous to, or to interfere witll the child's education, or to be harmful to the child,s health, or physical, mental, spiritual, moral, or social development.

T^i& -9- ( 11.

Alcoholicbeverages.

12.

13. t4.

Un-manufactured tobacco, tobacco refuse, manufactured tobacco (whether or not containing tobacco substitutes) and tobacco processing machinery.
Platinum, pearls, precious and semi-precious stones, silver, gold and related products.

Nuclear reactors and parts thereof, non-irradiated fuel elements (cartridges) for nuclear reactors.

15.

Goods for luxury consumption.
g'-rv ( -10- not ftled I I t I { F "(bmplol ond (hc lnltlol nnd to bc d thoir rcspccll purposcs of lho l)rogrammc Rccipient to thc "Dlsburscmcnl llUt I)cvelopment Bank policies, guidelincs, bc amended from timo "Non-lrligible Expcndll[ Donk Group financing Illnnncing dated March 2008 frr goods or services con {Nogatlve List) ro this A lrlflor Actions" means the noll consideration aad approvol of Itated in the table in Schodulo I 's Board of Direclor.r) to thh gramme Report" means tltc t containing Programmo and uses of funds includlng progress on Programme lmp together with other supporll attention.
n8 tcquire ULE III ONS prehensive report on ilter alia, tho , includirg the costs arrd bcnoll Agreement , the accomplistrmont Of gned to ensure the sustainabillty Of by rhe Recipienr and tho IIU6d 0f llro lhc to be prepared and submitted by lho the terms of this Agreement.
isbursement Handbook of the African 2015 setting out the disbursemonl of the Bank Group as the same moy ture determined as non-eligible for ture Eligible for Bank Group time to time as well as expenditure ve List attached as Schedule II bc fulfrlled as conditions prior to Board of Directors of the Fund lons before Presentation to the the Recipient pursuant to this includes amongst others, with the corresponding in the achievement of the and highlighting issues that 0, 'tlnits of Account " has the meaning glVli lll {ho Agreement establishing the Fund .,t Fusz- - l1- (