Freetown, 27th November 2025- Sierra Leone has reached a staff-level agreement with the International Monetary Fund (IMF) on the first and second reviews of its Extended Credit Facility (ECF)-supported program. Pending approval by the IMF’s Management and Executive Board, the deal will unlock about US$78.8 million in financing to support the country’s economic reforms.
The IMF noted that Sierra Leone’s fiscal stance in 2024 tightened 1.9 percentage points of GDP less than expected, largely due to unbudgeted road construction spending. These overruns increased reliance on domestic financing and pushed borrowing costs higher.
Authorities are now targeting a domestic primary surplus of 0.6 percent of GDP in 2025, representing a 3.3 percentage point consolidation compared to 2024. However, commitments to expand social spending have not yet been met.
The Bank of Sierra Leone (BSL) has eased monetary policy in response to falling inflation and fiscal consolidation. Since May, the policy rate has been cut by 6 percentage points to 18.75 percent. Reserve money growth remains broadly aligned with program targets.
Treasury bill rates have dropped sharply, falling from over 40 percent to around 17 percent since May. Inflation declined to 4.4 percent in October, while economic growth is projected at 4.4 percent in 2025.
Despite these gains, foreign reserves fell to just 1.5 months of import cover by end-September, a development the IMF flagged as a major concern.
To correct policy slippages and reduce reliance on domestic borrowing, Sierra Leone will pursue a 1.5 percentage point of GDP increase in tax policy measures, alongside stronger tax compliance and administration. Expenditure restraint will remain critical, though the IMF stressed the need to protect social spending.
Debt sustainability will also hinge on improved public financial management and stronger debt oversight. The authorities committed to accelerating reforms, including:
Strengthening public financial management to support fiscal adjustment, Enhancing debt management to reduce debt service costs, Addressing solvency challenges in the banking sector through tighter regulation and oversight. And implementing recommendations from the Governance and Corruption Diagnostic to improve transparency and accountability.
Macroeconomic conditions are expected to remain stable in the medium term, with growth projected to reach 4.6 percent and inflation staying in single digits. However, risks remain high. Reform fatigue, slower global growth, tighter financial conditions, and geopolitical uncertainty could undermine external demand and worsen fiscal and external balances.
The IMF staff team praised the Sierra Leonean authorities for “open and productive discussions” during meetings with Finance Minister Bangura, BSL Governor Stevens, and other senior officials, as well as engagements with civil society, the private sector, and development partners.
