By Sallieu S. Kanu
The Ministry of Finance, through the Public Debt Management Division, on Tuesday, October 1, 2024, engaged members from various Commercial Banks and the Bank of Sierra Leone on the implementation of the Medium-Term Debt Strategy 2023-2027 in the conference hall of the Ministry of Finance in Freetown.
In her statement, the acting Minister of Finance, Madam Kadiatu Allie, said the government of Sierra Leone is working with partners to address the domestic debt situation and improve the economy.
She stated that the Banks are critical in addressing domestic debt, which is challenging for the government and the private sector. She further encouraged the Banks to work with the government to implement the Medium-Term Debt Strategy.
The Director of the Public Debt Management Division, Mathew Sandy, stated that this is the fourth medium-term debt strategy 2023-2027 developed in Sierra Leone and the First home-grown after a participatory national workshop from the 21st – 25th August 2023.
He pointed out that the updated MTDS 2023-2027 is an important policy document that sets out the strategies and policy actions needed to reduce the cost and risk of the debt portfolio in Sierra Leone.
He also noted that the Cabinet approval and the publication of the document demonstrate the government’s commitment to transparency in debt management.
He noted that MTDS 2023-2027 would give market participants like Commercial Banks, Discount Houses, Insurance Companies, the public, and other fund holders such as mobile operators in the medium-term debt management objective of the government the pricing of their asset placement.
Director Sandy emphasised that the government has demonstrated an openness to debt management by bringing together relevant stakeholders to ensure consultations on the trajectory of market development to debt management.
He stated that the treasury bills constitute about 22.56 percent of total public debt stock, reflecting a share of 72.64 percent of total domestic debt.
Domestic suppliers’ arrears constitute 2.04 percent of total debt, reflecting a share of 6.56 percent of total domestic debt, and multilateral debt accounted for 54.3 percent of total public debt stock and 78.7 percent of the external debt portfolio. Bilateral debt accounted for 8.75 percent of total public debt and 12.7 percent of the external debt portfolio.
He also further noted that macroeconomic fundamentals have improved significantly since the cut-off date of 2022, which inflation has declined from 52.16 percent in 2023 to 25.49 percent in August 2024, GDP growth reached 3.4 percent in 2023, and activities are expanding with further growth in real GDP projected at 4:0 in 2024.
After comments, questions, and clarifications about the document, the representatives of the banks thanked the Ministry for the engagement, stating that it has increased their knowledge of the document.