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, the Covid-19 pandemic and the war in Ukraine. After rebounding to 4.1% in 2021, driven by the resumption of investment in mining activities and private consumption GDP growth slowed down to 2.8% in 2022, due to a deterioration of the terms of trade and increased uncertainty about global economic prospects (IMF). According to IMF forecast, GDP growth should strengthen to 3.1% in 2023 and 4.8% in 2024, driven by higher iron ore production. Growth will also be supported by private consumption, the recovery of agriculture and expatriate remittances (Coface).

In 2022, as Sierra Leone’s economy was still recovering from the effects of the Covid-19 pandemic, it was severely impacted by spillovers from the war in Ukraine and higher inflation, which exacerbated the already-limited fiscal space, increased debt, and reduced external buffers (IMF). High fuel, food and fertilizer prices, combined with the depreciation of the Leone (60% during 2022), pushed inflation to 27.2% in 2022, up from 11.9% in 2021 (IMF, World Bank). It is expected to further soar to 37.8% in 2023 before decreasing to 25.9% in 2024 (IMF). Inflation will thus remain well above the 10% ECOWAS convergence criterion. Fiscal deficit worsened from -7.3% GDP in 2021 to -10.9% GDP in 2022, due to additional priority spending in response to social pressures and stability concerns (IMF). Fiscal consolidation efforts should help bring the deficit down to -6.2% GDP in 2023 and -2.9% GDP in 2024 (IMF). Due to the cost of domestic debt, concessional loans are given priority to finance the deficit (Coface). Public debt rose from 79.3% GDP in 2021 to 98.8% GDP in 2022, and while it is expected to decrease, it will remain very high in 2023 (92.2% GDP) and 2024 (84.9% GDP) (IMF). Sierra Leone remains at high risk of debt distress. The 2023 budget will prioritise programmes and policies that will enhance economic resilience and protect the livelihoods of the most vulnerable. The government is committed to 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 (3.7% of the workforce in 2021 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 191 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: September 2023