By Sallieu S. Kanu
Washington, DC, December 16, 2025: The Executive Board of the International Monetary Fund (IMF) has completed the first and second reviews of Sierra Leone’s arrangement under the Extended Credit Facility (ECF), unlocking an immediate disbursement of about US$79.8 million. This brings total disbursements under the program to approximately US$127.8 million.
The reviews had been delayed due to fiscal overruns in 2024, reserve depletion, and reform setbacks. These challenges were partly driven by central bank financing of government spending. However, program performance has since improved, allowing the IMF Board to grant waivers for missed performance criteria after corrective measures were taken by Sierra Leonean authorities.
Economic Outlook
Sierra Leone’s economy is projected to grow by 4.4 percent in 2025, supported by mining and agriculture. Inflation fell sharply to 4.4 percent in October 2025, reflecting tighter macroeconomic policies and a stable leone, and is expected to remain in single digits over the medium term. Despite this progress, foreign reserves dropped to just 1.5 months of import cover by September, and public debt remains at high risk of distress.
Fiscal reforms are central to the program’s success. Authorities plan to strengthen revenue collection, improve tax compliance, and enhance public financial management to prevent future overruns. At the same time, social spending will be protected to shield vulnerable groups.
IMF Statement
Bo Li, Acting Chair and Deputy Managing Director of the IMF, praised Sierra Leone’s efforts to bring the program back on track:
“Inflation declined to 4.4 percent by October 2025, the leone remains stable, growth is near potential, and the cost of borrowing has dropped to sustainable levels. However, debt remains at high risk of distress and reserves have fallen to 1.5 months of imports.”
He emphasized the need for stronger fiscal discipline, improved debt management, and rebuilding reserves. Li also highlighted the importance of structural reforms, including the implementation of Sierra Leone’s Governance and Corruption Diagnostic report, to strengthen institutions and reduce vulnerabilities.
Key Policy Priorities
- Fiscal Policy: Tightening revenue measures, improving tax administration, and curbing expenditure overruns.
- Debt Management: Securing concessional financing, lengthening maturities, and broadening the investor base.
- Monetary Policy: Transitioning to a neutral stance while safeguarding central bank independence and rebuilding reserves.
- Financial Sector: Enhancing oversight and addressing solvency issues in the banking system.
- Governance: Implementing anti-corruption reforms to boost transparency and accountability.
Medium-Term Projections
Growth is expected to remain steady at around 4.5 percent through 2026. Inflation is projected to stabilize at single-digit levels, though reserves are forecast to recover only gradually. Public debt is anticipated to decline modestly, from 50.8 percent of GDP in 2024 to 47.3 percent in 2026, while the current account deficit narrows.
The IMF stressed that Sierra Leone’s outlook remains vulnerable to risks, particularly reform fatigue given the scale of fiscal adjustment required. Continued commitment to reforms will be essential to sustain stability and growth.