Sierra Leone: Third Review Under the Extended Credit Facility Arrangement, Requests for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Sierra Leone

This paper presents Sierra Leone’s First and Second Reviews under the Extended Credit Facility Arrangement, Request for Waivers of Nonobservance of Performance Criteria. Sierra Leone’s economic outlook remains stable. Growth accelerated last year, but spillovers from the Middle East war are weighing on the economy in 2026. Growth is expected to fall to 4 percent, while end-year inflation will reach 11.6 percent. The outlook is subject to significant risks, including rising political tensions ahead of the elections, the fallout from the war in the Middle East, and possible reform fatigue amid the sustained fiscal consolidation. Advancing energy and public financial management reforms will help contain spending, avoid arrears accumulation, and strengthen arrears monitoring. Revenue mobilization gains will require stronger tax administration and mining revenue collection, while stronger debt management will help mitigate risks. Structural reforms should be stepped up, including by strengthening arrears management, operationalizing the bank resolution framework, completing the resolution of the problem bank, and implementing the recommendations of the Governance and Corruption Diagnostic.