Earlier today, Parliament of Sierra Leone unanimously approved the FY2023 Supplementary Budget, officially titled the Supplementary Appropriation Act 2023.
This Act authorizes expenditure from the Consolidated Revenue Fund for the services of Sierra Leone.
Minister of Finance, Sheku Fantamadi Bangura, presented the budget in Parliament, explaining the reasons for revising the original FY2023 budget.
He said the revisions were necessary due to changes in macroeconomic assumptions, unexpected expenses by Ministries, Departments, and Agencies (MDAs), limited fiscal space, new expenditure pressures from policy decisions, and global price increases of goods and services, along with the depreciation of the Leone.
The Minister emphasized that this supplementary budget aligns with the Government Manifesto’s “BIG FIVE” priorities, which encompass boosting food security (FEED SALONE), enhancing human capital development, supporting youth employment initiatives, improving infrastructure, and revitalizing the public service. These initiatives aim to foster resilience and promote sustainable economic growth.
Moreover, Minister Bangura stated the objective of reducing the budget deficit from 9.6% of GDP in 2022 to 5.4% in 2023. This reduction is expected to decrease the Government’s borrowing needs, particularly from the banking system, thereby complementing the efforts of the Bank of Sierra Leone in managing inflation, stabilizing the Leone’s depreciation, and curbing the pace of debt accumulation.
During his presentation, Minister Bangura also discussed the macroeconomic and budgetary performance in the first half of the year, projecting a moderate growth rate of 2.7% for 2023.
He acknowledged the challenges posed by the global economy’s uncertainties, higher food and fuel prices, exchange rate depreciation, weak purchasing power, and a tight fiscal stance, which may impact growth in 2023.
The Minister highlighted various measures to increase domestic revenue generation, noting that domestic revenue collected during the first half of 2023 exceeded the original target by NLe367 million. The Government is implementing the Finance Act, 2023, and the Medium-term Revenue Strategy (MTRS) approved by the Cabinet in April 2023, which are expected to generate additional tax revenues estimated at 1.8% of GDP in 2023 and 2024.
Regarding fuel subsidy, Minister Bangura disclosed that the Government forgone NLe783 million (US$35 million) in direct and indirect subsidies during the first half of the year. He noted that despite facing limited fiscal space and competing priorities, such as energy subsidies, provision of agricultural inputs to farmers, scaling up social safety nets, free healthcare, and free quality education, the Government remains committed to mitigating the impact of multiple crises on the people.
During the parliamentary debate, Members of Parliament commended the Minister, his team, and the Ministry of Finance for their efforts in managing the economy during challenging times. Additionally, they offered suggestions to improve revenue generation and maintain rational expenditure for the benefit of the people of Sierra Leone.
