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

The ambitious fiscal consolidation continues to yield tangible results, although significant vulnerabilities remain. The authorities strengthened the domestic primary balance by 7 ppts of GDP since 2022, on the back of 3.5 ppts in tax revenue gains. Paired with the significant monetary policy tightening, the consolidation contributed to stabilizing the exchange rate, reducing inflation, containing borrowing costs, and restoring private access to credit. However, reserve buffers remain inadequate, debt is at high risk of distress, and political tensions are rising ahead of the 2028 elections.