Freetown, Sierra Leone – The International Monetary Fund (IMF) has approved the first and second reviews of Sierra Leone’s Extended Credit Facility (ECF), releasing US$79.8 million (SDR 58.3 million) immediately.
This increases total aid under the program to US$127.8 million (SDR 93.3 million) since it started in October 2024.
The decision, made on December 16, 2025, follows fiscal issues in 2024 that delayed the first review. Government overspending, funded partly by central bank purchases of securities, plus falling reserves and slow reforms, had hurt the program’s progress. Recent fixes have put it back on track.
The economy shows signs of recovery. Growth is expected at 4.4% in 2025, led by mining and farming. Inflation dropped to 4.4% in October 2025, thanks to tighter policies and a stable Leone. Borrowing costs are lower, showing better investor trust. But challenges remain: reserves cover only 1.5 months of imports as of September 2025, and debt risks are high.
IMF Acting Chair Bo Li praised the efforts: “The authorities have realigned the program after 2024 slips, and the economy is responding well. However, debt distress and low reserves need close watch.”
The IMF calls for stronger fiscal controls, better tax collection, and spending limits to avoid repeats. Social programs should protect the vulnerable during changes.
For debt, Sierra Leone should seek concessional loans, extend terms, diversify investors, and issue bonds at fair rates. Monetary policy can ease gradually, but rebuilding reserves is key.
Structural reforms include acting on the new Governance and Corruption Diagnostic report to build stronger institutions and fight corruption.
Risks include reform fatigue from tough adjustments. Still, with low inflation, steady growth, and global support, Sierra Leone’s outlook is positive if reforms continue.
