Sierra Leone

Sierra Leone

Population 7.4 million
GDP 488 US$ billion
Country risk assessment
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major macro economic indicators


  2016 2017 2018 (e) 2019 (f)
GDP growth (%) 6.3 3.7 3.7 5.5
Inflation (yearly average, %) 10.9 18.2 15.6 13.1
Budget balance (% GDP)* -8.0 -8.5 -6.0 -4.4
Current account balance (% GDP) -17.3 -20.0 -25.7 -23.0
Public debt (% GDP) 54.8 63.9 79.1 93.3

(e): Estimate. (f): Forecast. *Including grants.


  • Significant mining resources (iron, diamond, rutile, gold)
  • Coffee, rice and cocoa production
  • Financial support of the IMF
  • Tourism potential
  • Significant port activity that is set to expand


  • Vulnerable to weather conditions
  • Highly dependent on commodity prices
  • Corruption; inadequate protection of property rights
  • Hard for small and medium-sized enterprises to access credit
  • Inadequate infrastructure; failing health system
  • Risk of renewed Ebola outbreak
  • Extreme poverty and high unemployment


Brighter growth prospects

Economic activity is expected to pick up in 2019 after growth stagnated in 2018, in large part due to the shutdown of the country's largest iron mine, the Tonkolili facility, due to high production costs and low ore quality. Agriculture, which is still the mainstay of economic activity (60% of GDP and employment in 2017), will continue to expand. However, activity in the extractive sector could remain constrained by the slow growth in iron ore production, as no reopening date has been announced for the Tonkolili mine. The start-up of production at the Marampa iron mine should however temper the consequences of this. Although the Tongo facility is not expected to start production until the end of 2019, diamond production should enjoy a positive trajectory. These contrasting performances in the mining sector are expected to translate into a limited contribution to growth. Electricity supply constraints, the lack of infrastructure and an unfavourable business environment will also continue to have an adverse impact on growth. Tourism will be particularly affected by this situation, especially with China cancelling funding for a new airport near the capital in 2018.

Although set to decrease, inflation will remain above the convergence criterion established by the West African Monetary Zone (maximum annual inflation rate of 10%). It will once again act as a drag on household consumption, particularly for the more than 70% of Sierra Leoneans living on less than one US dollar a day. Accordingly, the central bank is expected to continue tightening monetary policy, a process that it began at the end of 2016, in an effort to curb the increase in inflation.


Fiscal consolidation at the heart of the new agreement with the IMF

In 2017, Sierra Leone signed up to a number of reforms as part of a three-year programme with the IMF. As the country failed to follow through on its commitments, the agreement was cancelled. However, the election of Julius Maada Bio in March 2018 seems to be a turning point in relations with the international institution. Shortly after his inauguration, President Bio liberalised fuel and rice prices in order to reduce public spending, as recommended by the IMF. A new programme under an Extended Credit Facility was thus signed by the new government in November 2018. In this context, consolidation of the public accounts will continue in 2019 through improved revenue collection, which will be achieved, in particular, by broadening the tax base and strengthening tax law. The government will also take action on current expenditure by curtailing the increase in defence spending while limiting growth of the public sector wage bill. Spending on education is expected to increase. Nonetheless, reducing the budget deficit will not be enough to slow the increase in public debt. This trend reflects the drastic cuts to international financial assistance following the previous government's inability to reduce its deficit, which led in turn to rapid growth in non-concessional debt to national creditors and therefore to increased interest and arrears. However, the new IMF agreement could limit the increase in debt in the coming years.

Although the trade deficit will remain substantial In 2019, it is expected to move in the right direction. Exports will be driven by diamonds (13% of exports in 2017), as well as by the non-mining economy, particularly the primary sector (cocoa accounted for 23% of exports in 2017). However, the country remains dependent on imports of energy, capital goods, and food products, as the agricultural system is mainly export-oriented. The deficits in services and income, linked to the presence of foreign investors, will also be a heavy burden to bear. The current account deficit will be mainly financed by foreign investment in the form of FDI and portfolio investment.


Tension on the domestic political scene

After two consecutive terms, Ernest Bai Koroma of the All People's Congress (APC) had to resign as President. On the March 31, 2018, Julius Maada Bio, the candidate of the Sierra Leone People's Party (SLPP), was elected to succeed him, signalling the desire for political renewal. A former soldier, Mr Bio had already held power as Vice-President after a coup d'état in 1996. As President, his priorities are access to education and the fight against corruption. With this in mind, the Parliament has approved an investigation into allegations of corruption involving members of the previous government. These investigations could create tension between the two parties. In the meantime, though, the President has to collaborate with the APC, which won the majority of seats in the parliamentary elections also held in March. In addition, the government could once again face public opposition, with fiscal consolidation and poverty fuelling social unrest. In 2018, the liberalisation of fuel prices triggered a wave of protests.

A political deadlock could impact the already poor business environment. Reflecting this, Sierra Leone has dropped to 163rd out of 190 countries in the 2019 Doing Business ranking.


Last update : February 2019