By Sallieu S. Kanu
The Government of Sierra Leone has disbursed NLe274.6 million (US$13 million) as subsidy to the Electricity Distribution and Supply Authority (EDSA) for the first half of 2023.
This disclosure was made by the Finance Minister Sheku Fantamadi Bangura when presenting the 2023 Government Supplementary Budget and statement of economic and financial policies in Parliament on Monday.
“Mr. Speaker, Honourable Members, even in the midst of challenging economic conditions, Government continues to expend enormous resources on the energy sector to ensure reliable and affordable electricity supply,” he said. The current electricity tariff, he said, though considered to be high, does not reflect the actual cost of generating and transmitting electricity to households. Consumers are currently paying 11 US cents per kilowatt hour compared to the uplift price of 21.5 US cents. This is made possible by the substantial subsidies provided by Government to the Electricity Distribution and Supply Agency (EDSA) and the Electricity Generation and Transmission Company (EGTC). “Total subsidies disbursed to EDSA for the first half of 2023 amounted to NLe274.6 million (US$13 million), including NLe263.2 million paid to Karpowership and NLe11.4 million to Transco/ CLSG. In addition, an amount of NLe29 million was also disbursed to the EGTC for the supply of fuel for the running Government-owned generators in Freetown and the provinces.”
Subsidy on Fuel
The Finance Minister said the global price of fuel and freight charges, though declining, remains high relative to the pre-Ukraine crisis, adding that the situation is compounded by the continuous weakening of the Leone. This implies that the current subsidized price of fuel at NLe21.5 per litre is far less than the full pass-through pump price estimated at NLe26 per litre, according to the Minister.
“To keep fuel pump price at NLe21.5 per litre, Government has forgone NLe708.9 million (US$32.8 million) in the form of indirect subsidies during the first half of 2023. In addition, direct subsidies to be paid to Oil Marketing Companies amounted to NLe75 million (US$3.3 million) during the same period,” he concluded.