Freetown, 25th August 2025 – Sierra Leone’s external financial position weakened in early 2025, as new data from the Central Bank reveals a 5.3% drop in remittances, a 2.45% decline in foreign reserves and a dramatic collapse in foreign exchange inflows, all pointing to mounting pressure on the country’s ability to meet international obligations.
Remittances, one of Sierra Leone’s most vital sources of foreign currency, fell from $128.31 million in Q1 2024 to $121.51 million in Q1 2025, a loss of $6.8 million. Analysts attribute the decline to global economic uncertainty, which has constrained the ability of Sierra Leoneans abroad to send money home.
Foreign currency reserves dipped from $374.55 million to $365.24 million by mid-2025, leaving the country with just 1.8 months of import cover well below the recommended minimum of three months. The shortfall reflects increased payments for imports and external debt servicing.
External debt repayments surged to $39.8 million in early 2025, driven by obligations to multilateral lenders including the IMF, World Bank, and African Development Bank. This added further strain to the country’s dwindling reserves.
Foreign exchange inflows plummeted by 81%, falling from $162.85 million to just $30.47 million. This sharp decline has made it harder for the government to meet external payment demands.
In contrast, export-related tax revenue rose by 60.3%, reaching $14.65 million, a rare bright spot in an otherwise bleak external finance report. However, the gains were not enough to offset the broader decline in foreign inflows.
With Sierra Leone spending more than it earns from abroad, economists warn of rising inflation, exchange rate volatility, and tighter fiscal space. The Central Bank is under pressure to stabilize reserves, while policymakers are being urged to boost exports, attract foreign investment, and restructure debt obligations.
“The numbers are clear: we’re burning through reserves faster than we’re replenishing them. Without decisive action, the country risks sliding into a deeper external financing crisis.”
