Sierra Leone’s government is moving to strengthen fiscal transparency and tighten control over state-owned enterprises (SOEs) and public revenue flows, according to the latest supplement to the October 2024 Memorandum of Economic and Financial Policies (MEFP). The measures, outlined in the International Monetary Fund (IMF) Country Report No. 26/40, are part of the country’s commitments under its Extended Credit Facility (ECF) programme.
The reforms aim to enhance scrutiny of budget transfers and contingent liabilities associated with SOEs, a step officials say is necessary to improve accountability and reduce fiscal risk. The MEFP states that “any additional support to SOEs will now require ex-ante evaluation of fiscal risks,” building on existing disclosures of government transfers in the 2025 national budget.
As part of the initiative, all SOEs will be required to submit audited financial statements to the Ministry of Finance starting September 2026. This move seeks to align corporate reporting with international fiscal norms and reinforce transparency. “We will continue to publish information on debt and guarantees of SOEs in the budget and associated fiscal risks in the SOE Financial Analysis report,” the MEFP notes.
The National Revenue Authority (NRA) will take a more proactive role in enforcing tax compliance among SOEs. The agency will independently pursue tax arrears, impose sanctions for non-compliance, and publish implicit transfers in its annual reports. Authorities said these steps are designed to curb fiscal leakages and ensure that public enterprises contribute fairly to national revenue.
In parallel, revenue-sharing arrangements for agencies operating under the Treasury Single Account (TSA) are set to be reviewed by June 2026. Officials explained that the reform will recalibrate agency retention rates to increase central government oversight and reduce fragmentation in public finances.
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The government also announced broader improvements in fiscal reporting. By September 2026, it plans to adopt the IMF-endorsed Government Finance Statistics Manual (GFSM) 2014 framework in preparation for the 2027 budget cycle. A dedicated inter-ministerial working group, with technical support from the IMF, will coordinate implementation across ministries, departments, and agencies. Authorities said the updated framework will enhance reporting consistency, improve transparency, and strengthen investor confidence.
Sierra Leone has faced long-standing challenges with SOEs, many of which have been associated with recurrent losses, contingent liabilities, and limited public accountability. Analysts say the country’s focus on audited financial statements, stricter revenue enforcement, and ex-ante fiscal risk assessments marks a significant step toward reducing public sector fiscal vulnerability.
“Effective monitoring of SOEs and adherence to international reporting standards are critical for sustainable public financial management,” said an IMF official familiar with the programme. “These reforms are expected to improve fiscal discipline, limit contingent liabilities, and create a more predictable environment for investors.”
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Observers noted that the reform package comes amid ongoing efforts to stabilize public finances and build institutional capacity. By requiring detailed disclosure of SOE debt, guarantees, and implicit transfers, as well as tighter revenue management through the TSA, the government aims to reduce fiscal risks that could undermine economic stability.
The MEFP stresses that these measures will reinforce transparency, improve efficiency in government spending, and align Sierra Leone’s financial reporting with global best practices. Experts said that improved fiscal oversight and predictable revenue flows will support broader economic objectives, including enhanced investor confidence, sustainable debt management, and efficient allocation of resources to priority sectors such as health, education, and infrastructure.
With the reforms scheduled for implementation over the next six to nine months, authorities are positioning Sierra Leone for stronger fiscal governance, a more resilient public sector, and improved accountability of state-owned enterprises.
Sierra Leone, located on the west coast of Africa, has an economy heavily reliant on natural resources, particularly minerals such as diamonds, gold, and iron ore. Mining accounts for a significant share of export revenue and government income, making the country vulnerable to fluctuations in global commodity prices. The agricultural sector employs the majority of the population, with subsistence farming of rice, cassava, and cocoa forming the backbone of rural livelihoods.
The country’s economy has struggled with the legacies of civil conflict (1991–2002) and the 2014–2016 Ebola outbreak, which disrupted trade, reduced investment, and strained public finances. Since then, Sierra Leone has made gradual progress in macroeconomic stabilization, debt management, and poverty reduction, aided by support from international partners including the International Monetary Fund (IMF) and the World Bank.
In recent years, the government has sought to diversify the economy, encourage private investment, and improve fiscal transparency, including reforms targeting state-owned enterprises (SOEs) and revenue mobilization. Infrastructure development, energy expansion, and digital initiatives are also emerging priorities to stimulate growth and create jobs.
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Despite these efforts, Sierra Leone faces challenges including high unemployment, a large informal economy, fiscal deficits, and dependence on external financing. Strengthening governance, increasing domestic revenue collection, and attracting foreign investment are central to sustaining economic growth and reducing vulnerability to external shocks.
