Sierra Leone News: Govt Generates 75% of its Recurrent Expenditure Locally
By Abu Bakarr Munu
The New Direction administration led by President Julius Maada Bio is generating 75 percent of its recurrent expenditure on locally on taxes and fees, the Finance Minister said on Thursday.
Jacob Jusu Saffa told news conference in Freetown that 15% of government expenditure is coming from development partners, but could not state where the remaining 10 percent is coming from.
The conference was held to address concerns of the declining economy from citizen.
He pointed out that taxes and royalties are the major sources of government revenue. He said that government has exceeded its January to June revenue generation target by Le213 billion. He said that for the period 2018, the government was able increase revenue from less than 13% to about 16% of GDP.
The finance minister said that, on assuming office, they undertook a lot of reforms including the restructuring and massive recruitment of personnel for the National Revenue Authority (NRA), and the introduction of an automated system.
“As a government, we are still not satisfied with the revenue; therefore we need to do more to gain more. I believe there is potential in that direction,” Minister Saffa said. He said that they are working with Statistics Sierra Leone (SSL) to conduct a survey on the rent and revenue tax for landlords.
Minister Saffa said that the current administration has enjoyed quiet a lot of grant from development partners including US$40 million from the World Bank (WB), 23 million Euro from the European Union and others, through project implemented by ministries, departments and agencies (MDAs), and through UN Agencies and NGOs.
He said that budgetary support to any government is based on performance. He said that development partners will not support a non-performing government. He said that before they took office, the previous administration was running the state with no single cent from donors. He said that eight months after assuming office, they won the trust of development partners.
He said that they are not borrowing from banks to pay salaries, adding that the government is paying salaries out of its generated revenue. He said that they are very much on course. He said that the government is spending nearly Le200 billion on wages a month.
The finance minister said that they inherited US$1.5 billion on external loans. He said that every month government is paying between Le100 and Le110 billion in servicing domestic debts, while it generates Le400 to Le450 million a month.
The Minister of Finance envisaged positive economy turnaround in the next quarter.
He said that the Sierra Leone economy is in the right trajectory, and is far from economy crisis in spite of the economic challenges.
The finance minister said, “Government needs urgent resources to manage the affairs of the state. I am grossly aware of the present inflation crisis in the country, but it not the worst compared to 2017.”
Minister Saffa said that mechanisms have been put in place to restructure the present economic situation with the implementation of strategic policies including reduction in arrears, consolidation of fiscal revenue, cease bank borrowing to the barest minimum, and reduction in expenditures which will yield better fortune in months and years to come.
