SIERRA LEONE
Table 1

2023

Population, million

8.8GDP, current US$ billion

3.5

GDP per capita, current US$394.1

International poverty rate ($2.15)

a26.1
a64.3

a89.9

Lower middle-income poverty rate ($3.65)
Upper middle-income poverty rate ($6.85)
Gini index

a35.7

School enrollment, primary (% gross)b151.7b60.1

Total GHG emissions (mtCO2e)9.7Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ Most recent value (2018), 2017 PPPs.
b/ Most recent WDI value (2021).

The economy continues to face significant challenges as policy missteps haveaggravated the impact of external
shocks, resulting in high and stubborn
inflation, pressures on the currency,
high risk of debt distress and inadequate
growth to support poverty reduction.
Despite some efforts in 2023, further
corrective fiscal and monetary measures
are urgently needed to address high inflationary pressure and the worsened
food insecurity situation.

Key conditions andchallenges
Economic development has been constrained by the country's susceptibility toexternal shocks, often been compoundedby weak macroeconomic management.
During the last decade, growth has averaged 4 percent (8 percent in the previousdecade) with high volatility marked byepisodes of boom and bust. The country’s
concentrated economic structure– heavy
reliance on low-value-added agriculture,mining, a sizable informal services sector– lends itself to volatility. Policy slippages
with regard to macroeconomic management have aggravated the impact of external shocks. In addition to low growth, thishas caused debt levels to rise markedly,
ranking among the highest in the region,and headline inflation to increase to a twodecade high in 2023. Economic growth has
been held back by structural factors suchas low private sector participation and investments, inadequate human capital,poor infrastructure, and weak institutions.

Recent developments
Economic activity slowed due to subdued
aggregate demand and socio-political instability. GDP growth is estimated at 3.1
percent in 2023, marking the second consecutive year of a slowdown. High and persistent inflation, compounded by a recent

coup attempt, has eroded households’ purchasing power and constrained private
consumption and investment. However,amidst these challenges, the mining sector
performed well, buoyed by strong iron ore
production and exports, and promising
agricultural output.
Inflationary pressures intensified, withsome tentative signs of moderation in thelast quarter of 2023. Headline inflation averaged 47.6 percent during 2023 – the second highest in Africa after Sudan – driven
by a combination of supply side factors(high food and fuel inflation), a depreciated currency, and continued fiscal dominance. Food inflation averaged 57 percent.
In response, the central bank raised rates
by a cumulative 525 basis points in 2023
to 22.25 percent by year-end. However, theefficacy of monetary policy is limited byshallow financial markets, and fiscal dominance. Inflation showed some signs ofmoderating after peaking at 54.6 percent(y-o-y) in October, down to 47 percent by
January 2024.
The fiscal position improved marginallyin 2023 but fell short of the year’s targets.
The fiscal deficit narrowed to 8 percent –1.3 percentage points lower than in 2022
but 2.2pp higher than the budgeted target. Expenditures were 2.6pp lower thanin 2022, with cuts in wages and salaries(1pp), subsidies (1pp) and capex (0.6pp).
Domestic revenue performance, although
1pp below target, improved by 0.4pp due
to partial implementation of policy measures introduced in 2023, and improvements in tax compliance. Public debt declined to 87 percent of GDP from 93 percent in 2022, but liquidity and solvency

FIGURE 1 Sierra Leone / Real GDP growth and contributions
to real GDP growth

FIGURE 2 Sierra Leone / Actual and projected poverty ratesand real GDP per capita

Percent, percentage points

Poverty rate (%)

50

100

1.6

4090

1.4

30

80

2070

1060

1.0

Real GDP per capita (constant million LCU)

1.2

050

0.8

-10

40

0.6

-20

30

-30

20

0.4
0.2

10-40
2001

2004

2007

Gov. cons.
Inventories
Statistical disc.

2010

2013

2016

Exports
Private cons.
GDP

2019

2022

2025

00.0
2011

GFCF
Imports

Sources: Statistics Sierra Leone and World Bank.

2013

2015

2017

2019

1

Apr 242023

2025

International poverty rate

Lower middle-income pov. rate

Upper middle-income pov. rate

Real GDP pc

Source: World Bank. Notes: see Table 2.

MPO

2021

risks to debt sustainability remain elevated. External debt, mainly owed to multilateral organizations, constitutes twothirds of the total, while the remaining isshort-term domestic debt.
The trade and current account balances
improved slightly due to stronger ironore exports and subdued import demand. Capital inflows improved largelyon account of higher project grants.
However, official reserves declined
nonetheless to barely three months ofimport cover due to external debt service, currency interventions, and foreign
currency payments to diplomatic missions overseas. The currency depreciatedby 18 percent (40 percent in 2022).
Decline in poverty slowed down in 2023.
Extreme poverty rate is (PPP$ 2.15/day) estimated at 25.3 percent in 2023, compared
to 25.7 in the previous year. Rising foodprice increases will continue to have a disproportionate impact on the poor. WFP estimates high prevalence of insufficient
food consumption, affecting 55 percent of
the population.

Outlook
Growth is projected to recover slowly to3.5 percent in 2024 against a backdrop ofhigh inflation and continued fiscal consolidation, before converging to its long-term
average of 4-4.5 percent in the mediumterm. The projected recovery will be supported by (i) continued growth in ironmining with planned expansion at major
mines, (ii) resilience in agricultural production as it trends closer to its long-term
average of 3.2 percent growth, and (iii)
gradual service sector improvements. Inflation will be influenced by global commodity prices and monetary tightening
and is expected to moderate to 15 percent
by 2026. Elevated prices will continue toimpact consumption and investment appetite, while fiscal consolidation will affectaggregate demand.
Upholding fiscal and monetary policy
tightening is pivotal for macroeconomic
stability. Fiscal outlook relies on revenue

TABLE 2 Sierra Leone / Macro poverty outlook indicators

measures identified in the Medium-Term
Revenue Strategy and near-term expenditure consolidation, especially on wages
and subsidies. Monetary policy tightening
should be complemented with reduced
central bank interventions and developing
the money market.
Pace of poverty reduction is expected topick-up as inflation subsides in the medium term. The international poverty rate
(PPP$2.15 /day) is expected to decline to22.7 percent by 2026, supported by recovering growth and moderating inflation.
This outlook is subject to several downside risks. Deviating from fiscal consolidation may jeopardize stability, as debt
sustainability risks remain elevated. Adverse global developments (includingslowing growth in China) can impact
commodity prices and exports. Climate
vulnerabilities and inflation could increase food insecurity and aggravate social tensions. The risk of political instability remains high, following a disputed general election and an attempted
coup, that affected policy momentum.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
4.1
36.7
0.6
-30.0
1.9
46.6

2022
3.5
-0.7
10.2
-2.8
5.0
-0.3

2023e
3.1
5.1
2.4
2.7
20.0
10.5

2024f
3.5
6.4
2.3
3.1
19.5
12.0

2025f
4.0
7.4
3.8
4.9
18.0
13.0

2026f
4.3
8.0
5.3
5.6
15.0
13.0

Real GDP growth, at constant factor prices
Agriculture
Industry
Services

4.0
2.5
17.4
2.8

3.6
3.0
8.2
3.2

3.1
2.7
5.0
3.0

3.5
3.2
6.0
3.1

3.9
3.3
6.6
4.1

4.3
3.3
6.6
5.0

Inflation (consumer price index)

11.9

27.0

46.7

30.5

20.0

14.6

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-8.7
8.5

-9.3
8.2

-7.8
5.8

-5.1
8.8

-4.6
9.8

-3.6
12.6

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

-7.6
21.1
84.7
-4.2

-9.3
18.9
93.0
-6.0

-8.0
18.1
87.0
-3.9

-5.0
20.1
76.6
-0.5

-3.1
20.1
65.4
1.0

-2.6
20.5
60.9
1.0

26.2
65.0
90.8

25.7
64.6
90.5

25.3
64.1
90.4

24.5
63.5
90.2

23.7
62.7
89.7

22.7
61.4
89.2

1.6
11.3

2.4
11.0

0.4
10.9

0.3
10.9

0.3
10.9

0.3
10.9

a,b

International poverty rate ($2.15 in 2017 PPP)
a,bLower middle-income poverty rate ($3.65 in 2017 PPP)a,b
Upper middle-income poverty rate ($6.85 in 2017 PPP)
GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.
a/ Calculations based on 2018-SLIHS. Actual data: 2018. Nowcast: 2019-2023. Forecasts are from 2024 to 2026.
b/ Projections using microsimulation methodology.

MPO2Apr 24