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As of December 2023, Sierra Leone’s state-owned enterprises (SOEs) are grappling with a significant debt burden totaling US$36.54 million, according to recent reports.
The Sierra Leone Telecommunications Company (SIERRATEL) is the primary contributor, representing a staggering 80.71% of the total outstanding debt. This has raised concerns about the financial management and sustainability of these enterprises.
The Public Debt Management Division revealed that the bulk of SIERRATEL’s debt stemmed from loans aimed at modernizing and expanding the country’s telecommunications infrastructure. Projects such as the CDMA initiative, supported by Exim Banks from India and China, were key drivers of these loans. Other SOEs, such as the Guma Valley Water Company, hold significantly smaller portions of the total debt, primarily funding projects like the Freetown Wash and Aquatic Environment Revamping Project.
In 2023, Sierra Leone’s SOE debt rose from US$34.04 million to US$36.54 million, emphasizing the need for urgent fiscal reforms. The government had initially borrowed from external creditors and then reallocated the loans to SOEs. Domestic debt for 2023 was recorded at US$7 million, making up 19.2% of the overall total, while government on-lending to SOEs accounted for US$29.54 million.
The Electricity Distribution and Supply Authority (EDSA) follows SIERRATEL with 19.68% of the debt, largely tied to fuel purchases for electricity supply in Freetown. Meanwhile, smaller entities such as the Sierra Leone Postal Services and Guma Valley hold minor shares of the overall debt. Notably, the Sierra Leone Commercial Bank and Rokel Commercial Bank reported no outstanding loans during this period.
The debt pile will keep growing as the “drunken sailors” continue to have a good time. Compound that to the free-falling Leone, times have never been harder on Sierra Leoneans.
The Leone this week has just crashed the £1 to Le30,000 barrier. I am feeling sorry for anyone being paid in Leones.