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The International Monetary Fund (IMF) has warned that Sierra Leone’s government must tighten control over foreign exchange (FX) spending to safeguard economic stability, even as the country records progress under its ongoing reform program.
Following a mission to Freetown led by Christian Saborowski from 20 April to 1 May, the IMF announced a staff-level agreement with Sierra Leone on the third review of its Extended Credit Facility (ECF) and a new arrangement under the Resilience and Sustainability Facility (RSF). The IMF’s Executive Board is expected to consider both in the coming weeks.
The Fund acknowledged gains including a domestic primary surplus of 1.3 percent of GDP in 2025, stronger tax revenues, and a more stable exchange rate. However, the IMF cautioned that rising spending pressures and weaker revenue performance in early 2026 threaten to erode progress.
“Progress in reserve accumulation needs to continue while the government’s FX spending needs to be further curtailed,” Saborowski said, citing urgency amid global energy price shocks and spillovers from the Middle East war.
Inflation, which stood at 8 percent earlier this year, is projected to climb to 11.6 percent by the end of 2026 before easing to single digits in 2027. The IMF noted that while monetary policy remains broadly appropriate, further tightening may be required if inflationary pressures persist.
The Fund also highlighted vulnerabilities in the banking sector, exposure to sovereign risk, and the need for stronger financial oversight. Growth, which accelerated in 2025, is expected to slow to 4 percent in 2026 before recovering toward 4.5 percent in the medium term.
Against this backdrop, the IMF urged Sierra Leone to continue fiscal consolidation, bolster revenue mobilization, strengthen debt management, and rebuild reserves. The proposed RSF arrangement would support climate-resilient reforms and catalyze financing for sustainable development.
The mission held discussions with President Julius Maada Bio, Finance Minister Sheku Ahmed Fantamadi Bangura, Bank of Sierra Leone Governor Ibrahim Stevens, and other stakeholders. The IMF stressed that curbing FX spending will be critical to maintaining stability and investor confidence.
