The Executive Board of the International Monetary Fund (IMF) has approved the immediate disbursement of SDR 23.333 million (approximately US$31.7 million) completed the third review of Sierra Leone’s program under the Extended Credit Facility (ECF).
The Executive Board also approved the government’s request for waivers related to the nonobservance of the continuous performance criterion on the ceiling of concessional external debt and the end-December performance criterion on net domestic assets. The waivers were granted in recognition of corrective measures implemented by the authorities.
In addition, the IMF approved a new arrangement under the Resilience and Sustainability Facility (RSF) for Sierra Leone amounting to SDR 155.550 million (approximately US$211.5 million). The Disbursements under the RSF will begin after the completion of the first review. The facility is designed to support Sierra Leone’s efforts to strengthen economic resilience and external stability, particularly through climate-sensitive public investment management, climate adaptation measures, and financial sector stability reforms.
Sierra Leone’s economic outlook remains broadly stable. Economic growth accelerated in the previous year; however, the impact of the ongoing conflict in the Middle East is expected to weigh on economic performance in 2026. Growth is projected to slow to 4 percent, while end-of-year inflation is expected to reach 11.6 percent.
The outlook remains subject to significant risks, including rising political tensions ahead of elections, the economic effects of the conflict in the Middle East, and the possibility of reform fatigue amid continued fiscal consolidation efforts.
Speaking on behalf of the Executive Board, Kenji Okamura, Acting Chair and Deputy Managing Director of the IMF, noted that the authorities’ policy tightening measures have contributed to stabilizing the exchange rate, reducing borrowing costs and inflation, and improving access to private sector credit. However, he emphasized that foreign exchange reserves remain low and that Sierra Leone continues to face a high risk of debt distress.
The IMF acknowledged that the government has some fiscal space to address pressures arising from global economic shocks. Nevertheless, it stressed the importance of maintaining fiscal consolidation while safeguarding essential social spending to ensure debt sustainability.
Regarding fuel subsidies, the IMF stated that, in the absence of a robust social protection system capable of delivering targeted assistance, temporary fuel price subsidies can help prevent disruptive price increases. However, such subsidies should remain transparent, temporary, and within agreed cost limits.
The IMF further encouraged the government to accelerate reforms in the energy sector and public financial management to control expenditure, prevent the accumulation of arrears, and strengthen fiscal oversight. Increased domestic revenue mobilization will require stronger tax administration and improved collection of mining revenues, while enhanced debt management will help reduce fiscal risks.
The Fund also advised that monetary policy should be tightened if inflationary pressures persist. Continued efforts are needed to strengthen financial safeguards, implement the new monetary policy framework, rebuild foreign exchange reserves, allow exchange rate flexibility, and repay overdue budget support loans to the Bank of Sierra Leone.
The IMF called for faster implementation of structural reforms, including strengthening arrears management, operationalizing the bank resolution framework, completing the resolution of the troubled bank, and implementing recommendations from the Governance and Corruption Diagnostic Assessment.
According to the IMF, the newly approved RSF arrangement will help strengthen Sierra Leone’s balance of payments stability by supporting reforms that enhance resilience to climate-related shocks. Priority areas include public investment management, social protection systems, fiscal planning, and the management of climate-related financial risks