The Finance Minister of Sierra Leone Sheku A.F. Bangura has warned about the repercussions of high debts service payments influencing agricultural investment and other key areas.

Minister Bangura in his recent address outlined the burden that servicing the national debt is placing on the government’s ability to fund essential public services, particularly those that benefit the country’s most vulnerable populations.

While acknowledging that Sierra Leone’s public debt remains sustainable for now, Bangura pointed out that the country’s overall debt-to-GDP ratio has significantly decreased from 94% in 2022 to 53.4% in 2023, following a rebase of the GDP. However, this improvement is overshadowed by a troubling trend in the ratio of debt service to domestic revenue, which he described as a critical concern for fiscal stability.

In 2023, the government allocated about 50% of its domestic revenue to debt service payments, a figure expected to rise to 59% by 2025. “These high debt service obligations are squeezing out funding for critical sectors like agriculture, education, health, and infrastructure—areas that directly impact the lives of our poorest and most vulnerable citizens,” Bangura stated. He emphasized that this growing fiscal pressure threatens the government’s ability to maintain and expand investments in social services, which are crucial for long-term economic development and poverty reduction.

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To address these concerns, Minister Bangura outlined several key strategies aimed at reducing debt distress and ensuring fiscal sustainability. He stressed the importance of adhering to the macrofiscal framework set by the International Monetary Fund (IMF), which includes limiting domestic borrowing and strengthening efforts to mobilize domestic revenues. “We must continue to consolidate public finances by improving revenue collection and managing public spending prudently,” Bangura asserted, noting that reducing the budget deficit and controlling borrowing are essential to maintaining economic stability.

Bangura also emphasized the government’s commitment to securing grant financing and concessional loans for investments in priority sectors, including infrastructure development. Additionally, he revealed plans to issue medium- to long-term bonds as part of an updated Medium Term Debt Strategy (MTDS), which aims to extend the average maturity of the country’s debt and reduce short-term repayment pressures.

To bolster fiscal discipline, the Minister announced the implementation of an updated Arrears Clearance Strategy and the introduction of an Arrears Profiling System (APS). This initiative is designed to track and resolve outstanding invoices within the government’s financial management system, ensuring more efficient handling of arrears across ministries and agencies.

Furthermore, Bangura suggested exploring innovative financing mechanisms such as public-private partnerships (PPPs) and debt swaps to support key sectors like education, healthcare, and climate resilience. “We are actively exploring creative solutions to navigate our fiscal constraints while ensuring that we continue to invest in the future of Sierra Leone,” he said, highlighting the government’s efforts to balance fiscal prudence with long-term development goals.

As Sierra Leone grapples with the challenges of managing public debt, Minister Bangura’s remarks underscore a broader commitment to achieving sustainable economic growth while safeguarding social welfare. His vision for the future is one that prioritizes investments in essential services, ensuring that despite the fiscal pressures, the country remains on track to meet the needs of its citizens, particularly in agriculture, education, and health.

Bangura’s warning about the rising cost of debt service serves as a crucial reminder of the need for effective fiscal management, long-term planning, and innovative solutions to secure a prosperous future for Sierra Leone. With strategic reforms and international partnerships, the government hopes to strike a balance between managing its debt obligations and making the necessary investments to foster economic development and improve the quality of life for all Sierra Leoneans.

The Finance Minister of Sierra Leone, Sheku A.F. Bangura, has issued a warning regarding the negative impact of high debt service payments on agricultural investment and other critical sectors. In a recent address, Minister Bangura highlighted the strain that servicing the national debt places on the government’s ability to finance essential public services, particularly those that support the country’s most vulnerable populations.

While acknowledging that Sierra Leone’s public debt is currently sustainable, Minister Bangura noted a significant decrease in the country’s overall debt-to-GDP ratio, dropping from 94% in 2022 to 53.4% in 2023 following a rebase of the GDP. However, he expressed concern over the rising ratio of debt service to domestic revenue, describing it as a pressing issue for fiscal stability.

In 2023, the government allocated approximately 50% of its domestic revenue to debt service payments, a percentage expected to increase to 59% by 2025. Minister Bangura emphasized that these high debt service obligations are crowding out funding for crucial sectors such as agriculture, education, health, and infrastructure – areas that directly impact the well-being of the country’s poorest and most vulnerable citizens. He underscored that this mounting fiscal pressure jeopardizes the government’s capacity to sustain and expand investments in social services, which are vital for long-term economic growth and poverty alleviation.

To tackle these challenges, Minister Bangura outlined several key strategies aimed at reducing debt distress and ensuring fiscal sustainability. He emphasized the importance of adhering to the macro-fiscal framework established by the International Monetary Fund (IMF), which includes constraints on domestic borrowing and enhanced efforts to boost domestic revenue mobilization.

“We must prioritize the consolidation of public finances through enhanced revenue collection and prudent management of public spending,” asserted Minister Bangura. He emphasized the importance of reducing the budget deficit and controlling borrowing to uphold economic stability.

In addition to this, Bangura highlighted the government’s dedication to securing grant financing and concessional loans for investments in critical sectors such as infrastructure development. He also disclosed plans to issue medium- to long-term bonds as part of an updated Medium Term Debt Strategy (MTDS) to extend the average maturity of the country’s debt and alleviate short-term repayment pressures.

To reinforce fiscal discipline, the Minister announced the implementation of an updated Arrears Clearance Strategy and the introduction of an Arrears Profiling System (APS). This initiative aims to monitor and resolve outstanding invoices within the government’s financial management system, ensuring more efficient handling of arrears across ministries and agencies.

Furthermore, Bangura proposed exploring innovative financing mechanisms like public-private partnerships (PPPs) and debt swaps to support key sectors such as education, healthcare, and climate resilience. He emphasized the government’s commitment to finding creative solutions to navigate fiscal constraints while continuing to invest in Sierra Leone’s future.

As Sierra Leone faces the challenges of managing public debt, Minister Bangura’s statements underscore a broader commitment to achieving sustainable economic growth while safeguarding social welfare. His vision prioritizes investments in essential services, ensuring that despite fiscal pressures, the country remains on course to meet the needs of its citizens, particularly in agriculture, education, and health.