Sierra Leone’s economy is showing signs of stabilisation despite mounting global headwinds, according to the latest World Bank Sierra Leone Economic Update (SLEU) launched in Freetown. The report, titled “Enabling the Private Sector for Growth and Job Creation,” projects real GDP growth of 4.3 per cent in 2025, rising to 4.6 per cent by 2027, supported by expected gains in agricultural productivity, expansion in mining, and steady services-sector performance.
The World Bank says this cautiously optimistic outlook reflects improving domestic conditions and a continuation of recent policy discipline, but cautions that private sector development will be critical to sustain growth and generate the large number of jobs the country needs. “Unlocking the potential of the private sector remains critical to diversifying Sierra Leone’s economy and creating more meaningful jobs,” said Abdu Muwonge, World Bank Group Country Manager for Sierra Leone. He emphasised the need for continued reforms to restore macroeconomic stability, improve the investment climate, and strengthen social spending to ensure growth is inclusive and sustainable.
A pressing demographic reality frames the report’s urgency: Sierra Leone must create at least 75,000 new jobs each year just to maintain its current employment-to-population ratio. The SLEU highlights that the current pace of private sector activity is insufficient to meet this demand and that a range of structural constraints limit the private sector’s capacity to expand and hire.
Key constraints identified in the report include limited access to finance, difficulties securing land and property rights, unreliable electricity supply, and gaps in workforce skills. These challenges increase costs for firms, discourage entrepreneurship, and reduce the country’s attractiveness to domestic and foreign investors. World Bank senior economist Subika Farazi, co-author of the report, noted that recent flagship analysis (B-READY 2024) points to room for improvement in the regulatory environment and public service delivery, both of which are central to making the business climate more dynamic and resilient.
Macroeconomic performance has been mixed but shows elements of progress. Fiscal performance in the first half of 2025 was broadly in line with targets, with authorities exercising spending restraint despite lower-than-expected revenues. Monetary policy was tightened to bring down inflationary pressures; with a tight fiscal and monetary stance, a stable exchange rate, and a decline in global food and energy prices, inflation eased through 2024 and reached 5.4 per cent by September 2025. Domestic borrowing costs have also fallen markedly: the one-year treasury bill rate dropped from 41 per cent in April 2025 to 16 per cent in September 2025 as borrowing appetite declined.
Despite these improvements, the report underscores persistent vulnerabilities. Public debt remains at high risk of distress, and the country’s reserves position has deteriorated, largely driven by high external debt servicing costs. Those constraints underscore the need for continued fiscal discipline and measures to broaden and stabilise revenue bases.
To address the twin challenges of sustaining growth and creating jobs, the SLEU puts forward a set of policy recommendations focused on reviving the private sector as the main engine of job creation:
• Strengthen fiscal management: Enhance revenue mobilisation, tighten expenditure controls, and improve tax administration to reduce reliance on costly domestic debt and restore fiscal credibility.
• Boost private sector competitiveness: Simplify regulations governing business entry, operation, and exit, encourage market competition, and reduce unnecessary trade barriers to make it easier for firms to start, operate, and grow.
• Improve access to finance: Expand credit reporting systems, modernise collateral registration, and increase transparency in financial transactions to broaden access to inclusive finance for small and medium enterprises.
• Enhance infrastructure: Invest in reliable energy, transportation, and digital networks to cut operational inefficiencies that raise firm costs and limit market access.
• Streamline foreign direct investment (FDI) frameworks: Simplify FDI regulations, strengthen investment protection, and reassess restrictive rules in key industries to attract the capital and technology needed for growth.
“Revitalising Sierra Leone’s private sector is essential for unlocking the country’s growth potential and creating more jobs,” said Michael Saffa, World Bank Senior Country Economist and lead author of the report. He stressed that without decisive reforms to strengthen fiscal discipline and improve the business environment, Sierra Leone risks falling short of its development objectives and failing to deliver opportunities for its rapidly growing labour force.
The SLEU, the World Bank’s annual flagship report for Sierra Leone, serves as both a diagnostic and a roadmap: it tracks recent macroeconomic and social developments, offers a short- to medium-term outlook, and proposes policy measures to catalyse private sector-led growth. The report’s core message is clear — while macroeconomic stabilisation has begun to take hold, scaling up private sector reforms and investments in infrastructure, finance, and human capital will be essential to translate stability into sustainable growth and meaningful job creation for Sierra Leone’s population.
