IMF Approves $253 million Loan to Support Sierra Leone’s Economic Recovery

 

The International Monetary Fund (IMF) has approved a 38-month loan program for Sierra Leone under its Extended Credit Facility (ECF), valued at SDR 187 million (approximately US$253 million). This loan is designed to aid Sierra Leone in overcoming its economic challenges, stabilizing the macroeconomic environment, and promoting sustainable growth.


This approval follows a staff-level agreement between the IMF and Sierra Leonean authorities on a set of key economic policies and reforms. These reforms focus on reducing inflation, addressing debt vulnerabilities, strengthening governance, and fostering inclusive growth. The loan will also provide essential funding for structural reforms and targeted social spending to reduce poverty, ensuring Sierra Leone’s development objectives, as outlined in its Medium Term National Development Plan (MTNDP) 2024-30, are met.

During the loan discussions, Christian Saborowski, who led the IMF mission to Sierra Leone, commended the government for making significant progress in addressing macroeconomic imbalances. Among the key achievements noted were reducing the domestic primary deficit and tightening monetary policy, which helped bring inflation down from 55% in October 2023 to 25% by August 2024.

However, Saborowski emphasized the need for continued reform, as challenges such as high Treasury bill rates, losses in the electricity sector, and low international reserves persist. The IMF’s new ECF arrangement will focus on stabilizing the economy by addressing these fiscal pressures, rebuilding reserves, and ensuring sustainable public debt management.

The IMF’s assistance comes at a critical time for Sierra Leone, which has faced external shocks, including rising inflation and a severe cost-of-living crisis. The IMF’s loan is expected to catalyze growth, strengthen Sierra Leone’s institutions, and create a foundation for long-term prosperity. The plan also prioritizes gender equality, social spending, and boosting regional connectivity.


The IMF mission expressed its gratitude for the open and collaborative discussions with key Sierra Leonean leaders, including President Julius Maada Bio, Finance Minister Sheku Fantamadi Bangura, and senior officials from the Bank of Sierra Leone, the National Revenue Authority, and other governmental bodies. Their engagement signifies a shared commitment to restoring stability and advancing the country’s development agenda.



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