The International Monetary Fund (IMF) has officially downgraded Sierra Leone’s ability to manage its debt to “weak,” warning that the West African nation faces a high risk of debt distress.

According to a newly released IMF Country Report made available to Sierraloaded, Sierra Leone’s government is struggling under the weight of expensive, short-term loans. The financial squeeze is so severe that in 2025, the government’s total debt payments are projected to reach 140.5 percent of its total revenue. This means the country is scheduled to owe significantly more in debt payments next year than it will actually collect in taxes and other income.

Sierraloaded understands that the crisis stems largely from recent government overspending. To cover budget shortfalls in 2024, the government borrowed heavily from local banks. At the time, the interest rates on these domestic loans soared above 40 percent, rapidly multiplying the country’s financial burden and draining its foreign exchange reserves.

While the country’s total public debt actually dropped to 44.4 percent of its gross domestic product (GDP) in 2024, the IMF stresses that the cost of paying back that debt remains dangerously high.

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To pull the economy back from the brink, the Sierra Leonean government has agreed to a strict financial rescue plan.

In recent months, the government has aggressively cut spending and slashed its reliance on expensive local borrowing. These emergency measures are already showing results, pushing domestic interest rates down from over 40 percent to around 15 to 17 percent by mid-2025.

Moving forward, the government has pledged to completely overhaul how it borrows money. Authorities have promised to reject any loan bids with unsustainably high interest rates and will stop taking on expensive debt linked to foreign currencies. Instead, they will seek out cheaper, long-term international grants and loans to give the national budget room to breathe.

Despite the severe immediate challenges, the IMF states that Sierra Leone’s debt remains sustainable in the long run—but only if the government strictly sticks to its new, austere budget.

The report warns that the country’s financial position remains incredibly fragile. If the government abandons its spending cuts, or if the country is hit by an unexpected global shock—like a sudden spike in fuel prices—Sierra Leone could quickly find itself unable to pay its bills.