Sierra Leone

Mining exports and investments will support economic activity in 2026

In 2026, growth is expected to accelerate thanks to revenues from mining exports on back of renegotiated concession contracts, the creation of joint ventures and the centralisation of resource management within a sovereign wealth fund called the Mineral Wealth Fund. Exports will be better valued thanks to the Safe Harbour mechanism, which sets a floor price and prevents pricing practices that allow multinationals to shift their profits to tax havens. Diamond production at the Tongo mine (in the east) will gradually increase, partially offsetting the indefinite shutdown of the Koidu mine in May 2025 following a dispute between the local subsidiary of Israel's BSGR and its employees over working conditions. Iron exports are also expected to accelerate in 2026, thanks to the expansion of capacity at the Marampa and Tonkolili mines (in the west and center of the country, respectively) and the opening of the magnetite processing plant attached to the latter. The development of the iron processing industry will increase the value of exports and reduce the construction sector's dependence on imports. Last, the Baomahun gold project, financed by Afreximbank and Africa Finance Corporation, could increase gold exports as early as 2026.

Investment should also support growth, particularly in infrastructure and mining, with, for example, the construction of the bridge between Lungi and Freetown—long delayed due to lack of funding and finally taken on by the US group Acrow—the modernisation of roads, and the expansion of port capacity and water and electricity networks. These projects are mainly financed by multilateral partners such as the African Development Bank, the World Bank, the European Union and the Millennium Challenge Corporation (MCC). Investments will also be made in the energy sector: a 50 MW solar power plant is to be built near Freetown, with support from French and British development banks and the Danish Frontier Energy fund. It is scheduled to come online in 2026. At the same time, the European Union is financing the installation of a series of small community solar power plants, representing a total of 5.2 MW. However, these initiatives remain much smaller in scale than the Bumbuna 2 hydroelectric project (153 MW), whose commissioning, initially scheduled for 2026, will be delayed due to a dispute between the British company responsible for its construction, Joule Africa, and the Sierra Leonean government.

Infrastructure development, including improvements to electricity coverage, will promote growth, particularly by facilitating the transit of exports and domestic trade, but also by promoting local activity. Furthermore, moderate inflation made possible by the development of agricultural activity (thanks to subsidies and investments, but subject to climate risks), restrictive monetary policy and lower prices for imported fuel and rice, should lead to an increase in private consumption.

Laborious pursuit of fiscal consolidation

The significant reduction in the public deficit targeted for early 2025 under the agreement with the IMF has been hampered by difficulty in collecting the expected VAT revenues owing to inadequate compliance with tax legislation. The government took note of this by amending the budget in July 2025, reducing investment spending by two percentage points of GDP and thus effectively reducing the deficit—albeit to a lesser extent than hoped for. The consolidation of public finances is expected to continue in 2026, although the former remain burdened by debt interest payments (42% of revenues in 2025) that are mainly domestic, without which they would show a slight surplus. In addition to increased revenues from mining exports, revenues are expected to grow thanks to an increase in the corporate tax rate, higher fuel excise duties and road taxes, the elimination of VAT exemptions on “high-end” products, and the fight against tax evasion by multinationals. Ongoing efforts will be made to improve tax administration efficiency. Expenditure will increase more slowly than revenue: the increase in operating expenditure will be directed towards civil servants' salaries (a 20% increase from September 2026), with an increase in the number of civil servants in health and education; investment will focus on agriculture and infrastructure; social spending will mainly target the poorest households and address subsidies, infrastructure construction in poor communities and employment policy.

The debt-to-GDP ratio is expected to continue to decline slowly but still remain high. The domestic portion of the debt—42% of the total, including 2% in arrears—consists of three-quarters treasury bills, with maturities of less than one year and real interest rates of 30%, and one-quarter treasury bonds with longer maturities. Foreign currency-denominated debt is held by multilateral (46% of total debt) and bilateral (7%) creditors—notably the Kuwait Sovereign Fund, South Korea and China—on concessional terms. The balance (5%) concerns commercial claims. The risk of over-indebtedness remains high.

In 2026, the current account deficit is expected to continue to narrow thanks to faster growth in raw material exports, in terms of both price and volume, than in imports involving investment projects. This deficit will be financed by the surplus in the financial and capital accounts, stimulated by FDI (from China, the US, Germany, and Belgium) and, above all, by project loans and project grants from multilateral partners (EU, World Bank, African Development Bank, MCC), as well as by the IMF's Extended Credit Facility program which will run until the end of January 2028. Foreign exchange reserves are expected to improve slightly but will remain just above one month's worth of imports.

A relatively stable and democratic state for the region

The country has been relatively stable since the end of the civil war in 2002. At the national level, the country is a unicameral multiparty republic, where the president is both head of state and head of government, sharing legislative power with the House of Representatives. At the local level, it is a hereditary clan-based feudal system. President Julius Maada Bio, who has been in office since 2018, was re-elected in 2023, at the same time as his party—the Sierra Leone People's Party, a social-democratic party mainly supported by the Mende ethnic group—won a comfortable majority (81 seats out of 135) in the legislative elections. The results were contested by international observers and the opposition, with the All People's Congress (socialist, mainly supported by the Temne ethnic group) boycotting parliamentary sessions and refusing to take the oath of office until October 2023, before the parties finally reached an agreement in July 2024 on the institutional reforms to be carried out.

Internationally, China remains the main trading partner and the largest provider of FDI, mainly in the mining sector, through the Leone Rock Metal group, which owns the Tonkolili iron mine. As part of the strategic partnership signed in 2016, China provides medical assistance and did so, for example, during the Ebola and Covid-19 epidemics, and assists the country with infrastructure construction. The US is attempting to counterbalance this influence. Despite the disappearance of USAID, the US continues to be a major financial partner through the financing of the Freetown bridge. It also provides subsidies for the construction of solar power plants and electrification—notably through USD 480 million in aid from the MCC—whose payments depend on institutional progress.

Sierra Leone is a member of several regional organisations, including ECOWAS, which promotes economic cooperation and integration, the construction of shared transport and telecommunications infrastructure, as well as peacekeeping. Since the end of the civil war in 2002, the country has maintained good relations with its immediate neighbors, Guinea and Liberia, and regularly exchanges views on the management of transboundary rivers and lakes, as well as security and stability. These talks take place within the framework of the Mano River Union, which also involves Côte d'Ivoire in the discussions.

Last updated: December 2025