By Alvin Lansana Kargbo
The Executive Board of the International Monetary Fund (IMF) has on Tuesday December 16, 2025 completed the first and second reviews of Sierra Leone’s economic reform programme under the Extended Credit Facility (ECF), paving the way for the immediate disbursement of SDR 58.3 million, equivalent to about US$79.8 million.
The approval brings total disbursements under the ECF arrangement to SDR 93.3 million (approximately US$127.8 million), marking a significant milestone in Sierra Leone’s engagement with the IMF and reinforcing international confidence in the country’s economic reform agenda.
The ECF arrangement was approved by the IMF Board on October 31, 2024, to support debt sustainability, curb fiscal dominance, reduce inflation, rebuild foreign exchange reserves, promote growth and strengthen governance, institutions and the rule of law. While the first review was delayed due to fiscal slippages in 2024; characterized by spending overruns partly financed through central bank purchases of Government securities, reserve depletion, and delays in reforms, programme performance has since improved markedly.
In completing the reviews, the IMF Executive Board approved waivers for the non-observance of several performance criteria, including targets on net credit to Government, net domestic assets and net international reserves at end-December 2024, as well as the end-June 2025 target on net international reserves. Those waivers were granted on the basis of corrective actions undertaken by the authorities to restore programme momentum.
Sierra Leone’s macroeconomic outlook remains broadly stable. Economic growth is projected to reach 4.4 percent in 2025, supported primarily by expansion in the mining and agriculture sectors. Inflation declined sharply to 4.4 percent in October 2025, reflecting tight macroeconomic policies and a relatively stable Leone and is expected to remain in single digits over the medium term.
However, the IMF cautioned that challenges persist. Foreign exchange reserves declined to 1.5 months of import cover as of end-September 2025, while public debt remains at high risk of distress. The outlook is also exposed to downside risks, including potential reform fatigue given the scale of fiscal adjustment required.
At the conclusion of the Board’s discussion, the IMF’s Acting Chair and Deputy Managing Director, Mr. Bo Li, commended the authorities for restoring programme credibility and noted that the economy is responding positively.
He observed that inflation has fallen significantly, the Leone has remained stable, growth is close to potential and borrowing costs have declined to more sustainable levels. Nonetheless, he stressed that maintaining debt sustainability and rebuilding reserves must remain top priorities.
Mr. Li underscored the importance of tighter fiscal policy, noting that the authorities’ decision to strengthen fiscal consolidation beyond earlier plans is imperative in light of past slippages. He emphasized the need for steadfast implementation of recent revenue measures, alongside improvements in tax compliance and administration. Public financial management reforms, he added, will be critical to preventing future overruns, while protecting social spending to cushion the most vulnerable.
On debt management, the IMF urged the authorities to adhere to the ambitious fiscal adjustment path, intensify efforts to secure grants and concessional financing, lengthen debt maturities, broaden the investor base and ensure Government securities are issued at sustainable rates.
The IMF also advised that monetary policy can continue transitioning toward a neutral stance given low inflation and ongoing fiscal consolidation. Strengthening central bank safeguards, enhancing the monetary policy framework, rebuilding reserves and allowing the exchange rate to adjust flexibly to shocks were highlighted as urgent priorities, alongside curtailing Government foreign exchange spending.
The IMF welcomed ongoing efforts to strengthen financial sector oversight, regulation and safety nets, noting that those measures will bolster financial stability. The authorities were encouraged to continue proactively addressing solvency challenges within the banking system.
Progress on structural reforms was described as essential to underpinning long-term growth. In that regard, the IMF welcomed the publication of Sierra Leone’s Governance and Corruption Diagnostic report and urged the authorities to focus on its full and consistent implementation to address governance weaknesses and corruption vulnerabilities.
The completion of the first and second reviews represents a major endorsement of Sierra Leone’s economic trajectory. The immediate access to nearly US$80 million is expected to strengthen the country’s financial buffers, support priority development spending and protect vulnerable populations at a time of continued global and domestic pressures.
The development reflects the Government’s commitment to macroeconomic stability, fiscal discipline and inclusive growth. Under the leadership of President Julius Maada Bio, fiscal consolidation efforts led by the Ministry of Finance and monetary stability measures anchored by the Bank of Sierra Leone have been central to restoring confidence and meeting IMF benchmarks.
The additional financing is expected to support investments aligned with national development priorities, including social services, infrastructure and private sector activation, while sustaining fiscal and monetary stability.
Welcoming the IMF decision, the Minister of Finance reaffirmed the Government’s commitment to disciplined economic management and accelerated reforms aimed at fostering a stable, inclusive and prosperous Sierra Leone.
