By Stephen V. Lansana
Freetown, August 27, 2024 — The Ministry of Finance has requested a budget of NLe506,646,900 for the fiscal year 2025. This disclosure was made at the ongoing Bilateral Budget Discussions organized by the Ministry of Finance in collaboration with the Ministry of Planning and Economic Development (MoPED) in Freetown.
The budget hearings, which began on August 19, have attracted significant attention from stakeholders, including representatives from MoPED, District Budget Oversight Committees, Civil Society Organizations (CSOs), and the media. The discussions are being presided over by CSOs and other non-state actors.
During the presentation, the Director of Research, Alhaji Abu Komeh, outlined the Ministry’s strategic objectives for 2024 -2026. These include increasing domestic revenue mobilization from 13% of GDP in 2022 to at least 18% by 2026 through tax policy reforms, strengthening public debt management to reduce public debt from 98.9% of GDP in 2022 to no more than 70% by 2026, and improving budget planning, execution, and reporting processes in line with the Public Financial Management (PFM) Act of 2016. Additionally, the Ministry aims to enhance the accounting, recording, and reporting of public funds and establish a Sovereign Wealth Fund to manage natural resource revenues for transformational projects.
Highlighting the Ministry’s achievements, Komeh noted the development and implementation of the Finance Act 2023 and the Medium-Term Revenue Strategy 2023-2027, which are key instruments for improving domestic revenue mobilization and placing the country’s budget on a sustainable trajectory. The Ministry also enacted the Tax and Duty Exemption Act 2023 and introduced Electronic Cash Register machines to enhance revenue collection.
Komeh further disclosed that the Ministry has updated the Medium-Term Revenue Strategy 2023-2027, providing a borrowing strategy aimed at minimizing risks and costs in the debt portfolio. Additionally, Medium-Term Bonds have been issued to reduce refinancing and rollover risks.
Despite these achievements, the Ministry faces challenges, including delays in the disbursement of funds for key activities, extra-budgetary requests from other Ministries, Departments, and Agencies (MDAs), and external dependencies.
Addressing fiscal decentralization, Komeh announced the development of a fiscal decentralization policy and strategy, which is awaiting Cabinet approval. He also mentioned the timely transfer of funds for devolved functions, which is crucial for meeting the European Union Budget Triggers for 2025, and the rollout of revenue mobilization initiatives in five councils.
On the management front, the Ministry has successfully negotiated nine new projects and programs nationwide, totaling USD 356 million in loans and grants. Of these, six projects, amounting to USD 155 million, have been approved and signed.
Responding to questions about the wage bill strategy, the Deputy Director of Budget, Jacob Tenga Sessie, stated that the wage bill currently stands at around 7.2% of GDP. The Ministry aims to reduce this to 6.5% through increased domestic revenue. Sessie highlighted that in the first half of 2024, domestic revenue exceeded L386 million, surpassing targets and qualifying the country for discussions with the International Monetary Fund (IMF) for a new program.