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On the 31st of July 2023, parliament members unanimously approved the FY2023 Supplementary Budget entitled the Supplementary Appropriation Act 2023, an Act to authorise expenditure from the Consolidated Revenue Fund for the services of Sierra Leone.
Presenting the budget in the Well of Parliament, the Minister of Finance, Sheku Fantamadi Bangura, highlighted the reasons for the revision of the original FY2023 budget ranging from changes in macroeconomic assumptions in the initial revenue and expenditure projections to some activities implemented by Ministries, Departments and Agencies (MDAs) not sufficiently budgeted for due mainly to the limited fiscal space, new expenditure pressures driven by policy pronouncements as well as the continued global rise in prices of goods and services, and the depreciation of the Leone.
He further mentioned that this supplementary budget would align new priorities of the Government articulated in the Government Manifesto-the BIG FIVE, which includes boosting food security (FEED SALONE), consolidating the gains in human capital development, supporting youth employment initiatives, improving infrastructure, and revamping the public service with the overall objective of boosting resilience and promoting sustainable economic growth.
He added that the aim is to reduce the budget deficit from 9.6% of GDP in 2022 to 5.4% in 2023. This, he said, will, in turn, reduce the borrowing requirement of the Government, especially from the banking system, thereby complementing the effort of the Bank of Sierra Leone in containing inflation, slowing down the depreciation of the Leones and reducing the pace of debt accumulation.
Minister Bangura Presented macroeconomic and budgetary performance during the first half of the year, citing a projected moderate growth of 2.7 per cent in 2023.
He also informed members of parliament that uncertainty in the global economy, higher food and fuel prices, exchange rate depreciation, weak purchasing power and tight fiscal stance will weigh on growth in 2023.
Sheku Ahmed Fantamadi Bangura highlighted several revenue generation measures to increase domestic revenue generation.
He explained that domestic revenue collected during the first half of 2023 amounted to NLe4.7 billion, exceeding the original target by NLe367 million.
He informed MPs that to achieve the projected increase in domestic revenues; the Government is implementing the Finance Act, 2023, the Medium-term Revenue Strategy (MTRS), which Cabinet approved in April 2023. Noting that these tax policy measures will yield additional tax revenues in 2023 and 2024, estimated at 1.8 per cent of GDP.
In the area of fuel subsidy, he stated that the Government forgone in the form of direct and indirect subsidies amounted to NLe783 million (US$35 million) during the first half of the year, noting that government will continue to implement measures to mitigate the impact of the multiple crises on the people despite the limited fiscal space amid competing priorities, such as energy subsidies, Provision of Agricultural Inputs to Farmers, scaling up Social Safety Nets, Free Health Care, Free Quality Education, School Feeding and more.
During the debate, Members of Parliament applauded the Minister and Team and the Ministry of Finance for their effort to maintain the economy during this challenging period. Also, they proffered suggestions on improving revenue and maintaining rational expenditure for the people of Sierra Leone.
Credit: MoF Communications
