Sierra Leone: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Sierra Leone’s economy was hit by various shocks these last years, including the Ebola epidemic (more than 14,100 cases, 3,900 deaths and a revenue loss equivalent to 29% of the country’s GDP according to the WHO), the drop in the prices of iron ore, and more recently the Covid-19 pandemic. After contracting by -2.2% in 2020, GDP growth rebounded to an estimated 3.2% in 2021, driven by the resumption of investment in mining activities and private consumption (IMF). According to IMF forecast, GDP growth should strengthen to 5.9% in 2022 before easing to 4.4% in 2023.

In 2021, Sierra Leone’s economy started to recover from the effects of the Covid-19 pandemic. After deteriorating due to increased public expenditure and decreasing revenues, public finances improved. Budget deficit narrowed from -5.8% GDP in 2020 to -4% GDP in 2021, and it is expected to further reduce to -3% GDP in 2022 thanks to higher mining revenues and fiscal consolidation efforts (Coface). Notwithstanding efforts in the last few years to mitigate its increase, public debt reached an estimated 73.7% GDP in 2020, and remained as high as 71.1% GDP in 2021 (IMF). It is expected to decrease to 68% GDP in 2022 and 65.8% GDP in 2023 (IMF). According to the IMF, the risk of debt distress is high but remains sustainable. The deficit is financed by concessional financing and grants. High global food prices keep the inflation at a high level. Estimated at 13.4% in 2020, it decreased to 11.3% in 2021, but is expected to rise to 13.3% in 2022 before declining to 11.4% in 2023 (IMF). Inflation will thus remain above the 10% ECOWAS convergence criterion. Near-term policy will focus on the coronavirus vaccine rollout. In addition, after benefitting from two emergency Rapid Credit Facility disbursements, Sierra Leonean authorities are committed to resuming the IMF program supported by the Extended Credit Facility arrangement. Its main objectives are revenue mobilization, safeguarding financial stability, and addressing external vulnerabilities (IMF). The government will also continue to implement the National Development Plan (NDP), which gives priority to macroeconomic stability, infrastructure development and the maintenance of key social programmes (free education, health, social protection). The National Agricultural Transformation Programme 2019/2023 aims to double agricultural production.

Unemployment (5.2% of the workforce in 2020 according to the World Bank, modeled ILO estimate), high poverty levels (especially in rural areas) and lack of infrastructure, corruption as well as social unrest continue to hamper the country’s economic development. Unemployment among young people reached 50% and more than 90% of the population has a vulnerable job. The Human Development Index ranks Sierra Leone 181st out of 189 countries. The country has to pave the way forward in the post-Ebola and post-Covid-19 period, which has been marked by an increase in poverty and social tensions, exacerbated by inflation and austerity measures.

Monetary Indicators	2015	2016	2018	2019	2020
Leone (SLL) - Average Annual Exchange Rate For 1 GHS	1,369.47	1,554.24	1,729.79	1,732.73	1,756.53

Source: World Bank - Latest available data.

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Latest Update: February 2023