[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110225-en":3,"doc-seo-110225-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},110225,16904993612988,"Olivia Brown","https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd",8,"Research & Report","Sierra Leone - Joint Bank-Fund Debt Sustainability Analysis - Debt distress risk assessment","Sierra Leone’s public debt is assessed as sustainable overall, yet external and overall debt distress risks are high and have risen notably since the July 2022 debt sustainability analysis. Large fiscal overruns and sharp depreciation of the leone weakened both solvency and liquidity indicators, worsening breaches in key ratios. A more frontloaded fiscal adjustment is urgently needed, supported by steadfast implementation, continued concessional financing and grants, and recovery in growth. Medium- to long-term indicators decline conditional on these measures, while elevated gross financing needs persist.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAbebe Adugna and Manuela Francisco (IDA); Montfort Mlachila and Anna Ilyina (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| SIERRA LEONE: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nSierra Leone’s public debt is sustainable, but risks of external and overall debt distress are high and have increased notably relative to the previous DSA published in July 2022.1 Last year’s large fiscal overruns and the sharp depreciation of the leone have resulted in a deterioration of both solvency and liquidity indicators. The external debt service-to-revenue ratio and the PV of the public debt-to-GDP ratio exhibit larger breaches of their respective thresholds. In addition, the overall debt-service to revenue ratio and the PV of external debt-to-GDP indicator have shifted up notably. A larger and more frontloaded fiscal adjustment is now urgently needed to ensure that debt remains sustainable. All debt indicators are on a declining trend over the medium to long-term. However, this is predicated on steadfast implementation of the planned fiscal adjustment, continued reliance on concessional financing and grants, and the projected growth recovery. Efforts to seek further grant financing and lengthen the maturity structure of debt remain key as debt service ratios and gross financing needs will remain elevated over the medium and long-term. Domestic rollover risks are attenuated by high interest margins, limited alternative investment options for domestic banks and the authorities’ commitment to limit future domestic borrowing. Sierra Leone is susceptible to growth and exchange rate shocks as well as fiscal slippages, all of which present downside risks to the debt outlook.  \n.  \n1 Sierra Leone’s debt-carrying capacity remains rated “medium” with a composite indicator value of 2.73 based on the April 2023 IMF’s World Economic Outlook (WEO) and the 2021 World Bank’s Country Policy and Institutional Assessment (CPIA) .  \n1. Public debt coverage remains the same as in the previous DSA. As in earlier DSAs, the debt stock includes central government public and publicly guaranteed debts on a residency basis (Text Table 1) . The DSA also includes the latest estimate of the consolidated stock of domestic payment arrears. The government is working, with the support of development partners including the World Bank through the Sustainable Development Finance Policy (SDFP), to improve its financial and debt management system, and to enhance the accounting and timely reporting of public debt, including the debts of state-owned enterprises (SOEs) and self-accounting-bodies. This DSA uses the debt stock data as of end-2022 and updated data on debt service and the debt composition. The updated data reflects recently completed reconciliations with bilateral creditors. This has resulted in revised amortization schedules, and increased yields on domestic instruments.  \n|  |  Subsectors of the public sector  Sub-sectors covered \u003Cbr>Central government X\u003Cbr>State and local government\u003Cbr>Other elements in the general government\u003Cbr>o/w: Social security fund X\u003Cbr>o/w: Extra budgetary funds (EBFs)\u003Cbr>Guarantees (to other entities in the public and private sector, including to SOEs) X Central bank (borrowed on behalf of the government) X Non-guaranteed SOE debt |\n| --- | --- |\n| 1\u003Cbr>2\u003Cbr>3\u003Cbr>4\u003Cbr>5\u003Cbr>6\u003Cbr>7\u003Cbr>8 |  |\n\nNote: Blank indicates there is no data.  \n\n|  |  |  |  |  |\n| --- | --- | --- | --- | --- |\n| 1. The country’s coverage of public debt | The central government plus social security, central bank,\u003Cbr>government-guaranteed debt |  |  |  |\n|  | Default\u003Cbr>Used for the Analysis\u003Cbr>Reasons for deviations from the default setting ","cbCain03BBZ9Apjn","https://ap.wps.com/l/cbCain03BBZ9Apjn","pdf",703428,1,20,"English","en",105,"# Risk assessment summary\n## External debt distress risk\n## Overall debt distress risk\n## Indicators and breaches vs thresholds\n# Outlook and key conditions\n## Fiscal adjustment needs\n## Financing strategy and grants\n## Domestic rollover and shock risks\n# Coverage and data updates\n## Public debt definition and subsectors\n## Payment arrears and reconciliations\n# Methodological assumptions\n## Contingent liability stress test assumptions\n## Key stress test settings","[{\"question\":\"How does the analysis rate Sierra Leone’s risk of debt distress?\",\"answer\":\"The risk of external debt distress is rated High, and the overall risk of debt distress is also rated High.\"},{\"question\":\"What main factors drove the deterioration compared with the July 2022 DSA?\",\"answer\":\"Large fiscal overruns and sharp depreciation of the leone worsened solvency and liquidity indicators and increased breaches of relevant thresholds.\"},{\"question\":\"What is required to keep debt on a sustainable path over the medium to long term?\",\"answer\":\"Sustainability depends on steadfast implementation of the planned fiscal adjustment, continued reliance on concessional financing and grants, and a projected growth recovery, alongside efforts to secure additional grants and extend debt maturity.\"}]",1784484457,50,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"sierra-leone-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/sierra-leone-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment/110225/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-22","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"How does the analysis rate Sierra Leone’s risk of debt distress?","Question",{"text":75,"@type":76},"The risk of external debt distress is rated High, and the overall risk of debt distress is also rated High.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What main factors drove the deterioration compared with the July 2022 DSA?",{"text":80,"@type":76},"Large fiscal overruns and sharp depreciation of the leone worsened solvency and liquidity indicators and increased breaches of relevant thresholds.",{"name":82,"@type":73,"acceptedAnswer":83},"What is required to keep debt on a sustainable path over the medium to long term?",{"text":84,"@type":76},"Sustainability depends on steadfast implementation of the planned fiscal adjustment, continued reliance on concessional financing and grants, and a projected growth recovery, alongside efforts to secure additional grants and extend debt 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