Sierra Leone

Sierra Leone has shown remarkable resilience in overcoming the twin shocks of the iron ore export collapse and the Ebola Virus Disease (EVD) epidemic. However, significant medium-term challenges remain amidst persistent economic fragilities. There is a severe infrastructure gap with deficiencies in transportation, housing for the poor, sanitation and health facilities, as well as food security and energy supply. Despite these problems, the economy holds tremendous potential. Sierra Leone boasts one of the largest natural ports in the region, it receives abundant rainfall with a fertile soil and a sea front with promise in agriculture, fishing and tourism. Meanwhile, the mineral sector can be a basis for higher value added processing. But weaknesses, especially on fiscal policy and in the financial sector, remain impediments for unlocking this potential. The key structural macroeconomic problem is low fiscal revenues—despite significant efforts to enhance revenues in recent years. Since late 2016, high inflation and falling foreign exchange reserves have emerged as new macroeconomic challenges. Both are a direct result of a spending surge in late 2016.