IMF Staff Country Reports

This paper presents Sierra Leone’s Eight Review under the Extended Credit Facility (ECF) Arrangement, Request for a Waiver of Nonobservance of Performance Criterion, and Financing Assurances Review. Successive shocks and policy slippages contributed to a build-up in macroeconomic imbalances in recent years. The Sierra Leonean authorities have taken bold steps to tighten macroeconomic policies, but reform implementation is challenging amid the large adjustment need and the ongoing cost of living crisis. As the arrangement under the ECF-supported program for Sierra Leone ends, continued reform momentum will be critical in restoring macroeconomic stability and containing risks to debt sustainability. As macroeconomic policies tighten further, efforts to protect the most vulnerable are a priority. A decisive macroeconomic tightening is needed to restore stability and contain risks to debt sustainability, supported by an ambitious updated debt management strategy. For fiscal policy, this calls for implementing tax revenue measures and exercising steadfast expenditure restraint, while supporting the most vulnerable parts of the population. Monetary policy will need to tighten sharply to bring inflation down and stabilize the Leone.