Lawrence Williams: Sierra Leone Telegraph: 29 August 2020:
The Public Financial Management Consortium (PFMC) has questioned the credibility of the Sierra Leone government budget. Critical analyses by the Consortium documented in two separate reports launched yesterday indicate that government expenditure surpasses revenue generation. (Photo above – Finance minister JJ Saffa).
The Consortium defined budget credibility as the ability of the government to accurately and consistently meet their expenditure and revenue targets. The analyses show a huge variance between actual expenditure and originally budgeted expenditure.
Budget heads have also increased from 75 in 2017 to 87 in 2019. This means that we now have more ministries, departments and agencies of government to fund out of the meagre revenue collected by the National Revenue Authority (NRA).
The PFMC says delays in disbursing budgetary allocations to MDAs have a significant impact on service delivery, adding that more needs to be done to reduce the difference between approved and actual MDA budgets, as well as to improve the credibility of expenditure composition to reduce changes to individual budget lines.
Though there has been a significant drop in payment of arrears from 169 billion Leones in 2017 to 86 billion Leones in 2019, public debt has increased substantially from 14.9 trillion Leones in 2017 to 21.5 trillion Leones in 2019.
“Even with all these measures to increase revenue, the government public debt continued to rise. In 2017, total debt was Le 14.9 trillion which represent 51% of the GDP. In 2018, it increased to Le 18 trillion (59% of GDP) and it further increased to Le 21.5 trillion (58% of GDP) in 2019,” the report states.
The study found out that the NRA is losing huge revenue due to the Covid-19 pandemic.
“The daily domestic revenue for April 2020 reduced by Le 6.2 billion compared to April 2019. This reduction was due to the slowdown in economic activities in the country caused by the COVID-19 raft of measures, which affected business operations,” the report states.
It explains further that if the situation persists NRA will not meet its revised revenue target for 2020 and that would have a significant impact on the proposed GDP target for 2023.
“The revised domestic revenue target for 2020 is Le 6.47 trillion and the total revenue collected so far (January to April) is Le 1.78 trillion, which represent 27.5% of the revised revenue target. If this trend continues, NRA may not meet its target for 2020,” PFMC warns.
The Consortium says that government is now spending more than it is collecting from domestic revenue on a monthly basis, adding that this situation has forced the government to adopt other measures to finance the gap through means such as selling of treasury bearer bonds, ways and means, among others.
PFMC recommends that: “Government should try to ensure that it decreases the big difference between operating expenses and domestic revenue, but social sector spending should not be affected as citizens need these services now more than before.”
I will like to propose doable measures: 1. Reduce number of ministers to 10 to 12, and similar for deputies, for example, by scrapping the role of Chief Minister and have a single Minister for Education, and similar duplicated ministries. We are a relatively smaller governance that can be effectively run with lesser officials. 2. Stop supply of imported rice to the forces and others that may benefit from it, and redirect savings of foreign currency exchange from purchase, shipping, storage and distribution, to the development of agriculture in all areas of our country. The free monthly supply of imported rice is a burden on reserve of foreign currency, and source of corruption, intimidation, and bullying of junior officials by their senior colleagues.
3. Engage in countrywide development of agriculture, with initial state sponsored multi farming systems in every chiefdom, using low to middle level mechanisation to create jobs, stop rural depopulation and urban repopulation, increase local food production, discourage import of foreign foods, and generate foreign exchange. 4. Focus on technical and vocational education to increase blue colour workforce, boost self employment, creativity, and the construction industry. 5. Reduce foreign trips by all government officials to cutdown on foreign currency allowances, and empower foreign based government officials like Ambassadors to negotiate businesses on behalf of our country. These are feasible and sustainable economic measures.
Patriotic and well meaningful contribution Mr. Victor Abu, welcome to this intellectual forum.
So, what are some of the possible solutions that could end this seemingly endless redundant state that we are in? Do we vote the current government out and replaced it with the same political faction, who for 11 strong years maintained a debased socioeconomic reality that was similar to the one that we currently have in our hands? Do we bring in a new political party, whose leader’s plan would more than likely be to swim the earth, in search of foreign entities to come colonize our economy in order for us to ‘thrive’ as a people – which history should have taught us by now never amounted to anything really worth exploring? Shall we proceed playing the same game of meet your new boss, same as the old, or do we take a stand and do something different?
Gentlemen, these questions need serious scrutiny, because I’m getting the feeling that our inept governing system is not simply based on corrupt individuals, who for some peculiar reason seem to be the ones who end up usurping our government body. For It is a known fact that most governments around the world are filled with scavengers, who purely feed on the blood of their zombie population who continuously vote on their behalf. We can even make a case that governments in some of the most thriving parts of the world are filled with these type of individuals. So how come these leaders have been able to maintain a conducive environment for their people to live in and ours haven’t? What is so ‘special’ about our leaders that to even put in place public bathrooms in a nation that they are adamant on selling as a tourist destination they cannot?
Is the global system of waiting for ‘multinational’ entities and foreign banking systems to feed us a viable option, since that seem to be the only plans that we got going for us? If so then what can we as a people do to attract their interest?
Government need to do more. This Government promised to cut down wastages, revamped the economy and vice versa but to the disappointment of every Sierra leonean, the economy is in shambles. Jobs are not enough, poverty is bitten deeply. We are not expecting this increased hardship in the country. With all the technocrats the New direction Government is boasting of, this government is a complete setback to the hopes and aspirations of it’s citizens.
Personally, I have never been a politician or even joined a political party, and I am not either an economist. The reality is, the New Direction government clearly stated that “they inherited the worst economy since independence”, and it was evident that most of the mining companies were closed. There was austerity and IMF and World Bank fled our country with their hands in their pockets due to the rampant corruption of the destructive APC party. The Almighty as always, came to our rescue by blessing our nation with one of the biggest diamonds in the world “ PEACE DIAMOND “ which was found by a PASTOR in Kono. Even the proceeds of that money is still unaccounted for by the lifetime chairman of the APC.
The New Direction government through the hard work of our current Finance Minister Mr. J.J. Saffa who was a former employee of the IMF, successfully convinced our international donors and Financial institutions to return as compared to other corrupt countries like Lebanon or Mali. He succeeded and promised to implement their conditions, which the NRA has been successful in implementing. Balancing our budget without including monies from our donor partners will definitely render this report inaccurate or inconclusive. The reality is Sierra Leone imports has always exceeded exports. Unless our country is free from the current IMF conditions and continues the diversification of our economy, the only solution we are left with is the “Magic Wand” from President Bio.
Finally, with the increase in spending for social development programs like the Free quality education, Health Care and Social Safety Net, more pincodes for government workers and new school approvals have been implemented which is responsible for the budget increase. Even the greatest country in the world USA that owes China over $1/trillion cannot balance their budget.
This one direction government under president Bio, is not capable of maintaining financial disciplines, even if we have a buoyant economy. And since our struggling economy is in a state of distress, it is hard to see how our country is going to avoid the headwinds of more economic distress due to the effects of the new bogeyman in town, the covid19 pandemic. You can’t grow your economy on the back of false accounting. It will not wash. Even with friendly international financial assistance, to help cushion the effects of the covid19 pandemic, the risks to early economic recovery will remain a distance pipe dream for now. And if you factor the effects of corruption and lack of sound economic decipline, our country is in for a bumpy ride over the next few years.
The balance between Government revenue generated through taxes collected and expenditure commitments, is out of sync with the economic reality of our country. Any government that comes after this government, whether its president Bio’s re-election, or someone else we never heard of, is going to inherit the same problems. Maybe even worst. To inoculate our economy from such outcome, we need good leadership, that invest in education and infrastructure projects, tackle corruption and stop waste. Right now our country needs every penny. May God bless Sierra-leone.
Finally someone with a good sense of judgement has decided to focus the dazzling bright lights at center stage where the main actor – a Hangman with a cruel financial noose is now standing complacent and unperturbed, doing his usual thing – strangling millions of our helpless poor starving people. Whosoever it was that thought he needed an executioner instead of a preserver and defender of the masses must have his own private malicious reasons for doing so, for it is only a twisted diabolical mind that will let nursing mothers and their tender suckling infants go to bed hungry, night after night in the most deplorable conditions and in utter frightful darkness, fully contented with themselves for wasting millions of dollars instead on superficial needless SUVS.
Hey! I am not surprised that the figures and projections they have provided to a gullible public do not add up – a fraudster raised in the den of devious foxes knows no better – thefts, deceits and double-dealing are seen as soft beds and warm pillows on which they can relax and receive solace, comfort and reassurances from without worrying about a damn freaking thing.
This government came in to power promising fiscal responsibility and cutting waste in government. What we have seen is quite the opposite creation of more roles and unsustainable spending far above revenue generation. We are totally disappointed in this government. This expectation that a political party when in government, has to provide jobs for their cronies, is contributing to the laziness of our people who are always looking for the easier option.