By Mabinty M. Kamara
The latest fiscal analysis by Budget Advocacy Network has indicated that the current expenditure of the government of Sierra Leone outweighs the revenues generated from January 2023 to September. The group therefore calls for prudent fiscal management.
According to the report, throughout the months of January to September 2023, the total operating expenses which amounted to twelve Billion, five hundred and three million, two hundred and seventy-one thousand New Leone (Nle12, 503,271) exceeded the total domestic revenue plus grant which amounts to seven billion, five hundred and twenty-nine million, two hundred and seventy-nine thousand new Leone (Nle7, 529,279)
“Even with grants, (though minimal) the total operating expenses is more than the total revenue by four billion nine hundred and seventy-three million, nine hundred and ninety-two thousand new Leone (NLe4, 973,992). The gap between the domestic revenue collected and the total operating expenses is 77% of the total revenue collected from January to September 2023. ” the report reads.
However, the report stated that the domestic revenue, on a month-by-month basis for the 2023 Financial Year (FY), surpassed the FY2022 throughout from March to September except for the months of January and February in which revenues fell short of 2022 by NLe 21,071 and NLe117, 065 respectively. “The months of August, June, and September 2023 recorded the highest revenues over FY2022 by NLe326, 703, NLe224, 746, and NLe216, 535 respectively. When the 9 months of revenue collection (January to September) are compared, FY 2023 revenues surpassed FY 2022 by NLe1.3 billion (18%)” it stated.
Comparing the 2022 and 2023 data, it noted a total revenue of Five billion seven hundred and fifty-four million, seven hundred and twenty six thousand (NLe5, 754,726) for January to September 2022 and total revenue generated as Seven billion and forty-eight million, nine hundred and ninety-four thousand New Leone- (NLe 7,048,994) from January 2023 to September 2023.
The report went on to note that the 2023 initial Appropriation Act approves the sum of NLe 15.1 billion for expenditure and that as of September 2023, the government’s total operating expenses is already NLe12.5 billion while the revised expenditure was eighteen billion, five hundred and fifty-six million, four hundred and seventy New Leone-NLe 18,556,470 .
“If the government spends NLe 2,610,199 in the remaining period, (October- December) they will match the initial approved expenditure for FY2023 from the macro perspective. With the revised expenditure, the government would need to spend NLe6 billion from October to December” it says.
According to the report, the government spent more resources in areas of Current Transfers which amounts to four billion, one hundred million, five hundred and sixty-seven thousand new Leone- NLe4, 100,567, which include transfers to the Tertiary Educational Institutions; Local Councils; Road Fund; the Treasury Single Account Expenditure; the National Revenue Authority’s expenditure, and Domestic Interest. For Wages and Salaries- three billion, five hundred and eighty million, four hundred and thirty new Leone (Nle 3,580,430) and Non-Salary Non-Interest Recurrent Two billion, five hundred and seven million, three hundred and ninety five thousand New Leone or NLe 2,507,395) were the second and third expenditure lines in the pecking order.
The report highlighted various financing methods, which are long, short-term domestic debt, and other financing mechanisms which include treasury bills, loan amortization, cheque payable, and others used by the government in a bid to cover the excess expenditure above revenue.
It noted that total financing by the Government of Sierra Leone was three billion, six hundred and twenty-three million, eight hundred and thirty two thousand New Leone- NLe3,623,832 from January to September 2023, adding that July and March 2023, were the highest in terms of financing.
“In conclusion, the sum total of the combination of domestic revenue, grants, and the various financing mechanisms from January to September, is still not enough to cover the total operating system for the same period. For the period January to September, the total income (domestic revenue, grant, financing mechanism) is NLe11, 153,111; while the total operating system is NLe 12,503, 271,” it noted.
The group in their report recommended that the government rationalizes its expenses and implement measures that would reduce costs such as expenditure review by conducting routine and comprehensive assessments of all government agencies and programmes to locate areas of inefficiency, duplication, and waste. It also recommended the digitization of governmental services which may reduce administrative burdens and ensure effectiveness of service delivery.
“Limit Recurrent Expenditure: This includes salaries, allowances, and other running costs. While it’s important to pay public servants fairly, governments need to ensure that the wage bill is sustainable,” it advised.
It also called for a reduction in overseas travel by instituting clear and stringent policies on who gets to travel, for what purpose, and how often.
In addition, the report recommended improved property tax collection –by collaborating with other institutions like the Freetown City Council in the case of Freetown “Build Trust in Government: If citizens believe their tax money is used effectively and efficiently, they are more likely to pay taxes,” it stated.
Sierra Leone is currently dealing with harsh economic realities exacerbated by rising inflation on basic commodities. This according to government officials cannot be unconnected to the global twin shocks of Covid-19 and the ongoing Ukraine -Russia war.
Copyright © 2023 Politico (22/11/23)
