Freetown, SIERRA LEONE – In his comprehensive analysis of the potential risks to the implementation of the 2024 budget, Finance Minister Sheku A. F. Bangura has identified State-Owned Enterprises (SOEs) as a significant threat due to their weak financial performance and contingent liabilities.
Presenting the 2024 Budget Speech to Parliament on Friday, November 10th, 2023, Minister Bangura highlighted various factors that could potentially impede the successful execution of the 2024 budget and hinder the achievement of its objectives. Among these concerns are continued geopolitical tensions, including the Russian-Ukraine war escalation and the Palestine-Israel conflict. The Minister also pointed out the sustained rise in global food and energy prices, which could impact domestic prices, and the ongoing depreciation of the exchange rate, affecting the budget’s implementation.
Additionally, the Finance Minister expressed concerns about the weak recovery of the global economy and general economic uncertainties, which might lead to a decline in overseas development assistance and foreign direct investment (FDI) inflows. Other potential challenges include the delay and partial implementation of the Medium-Term Revenue Strategy, associated revenue shortfalls, and non-compliance by Ministries, Departments, and Agencies (MDAs) in adhering to budget limits, resulting in persistent in-year requests for extra-budgetary expenditures, including salary increases.
Addressing the governance of SOEs, Minister Bangura informed Parliament that the government is taking proactive measures to enhance their governance, focusing not only on financial strengthening but also on improving the quality of service delivery. The Ministry of Finance, in collaboration with the World Bank and the National Commission for Privatization (NCP) and other relevant MDAs, conducted a comprehensive diagnostic assessment of the corporate governance of SOEs. This assessment led to the formulation of an SOE Governance Policy.
Building on this policy, Cabinet approval has been obtained for an SOE Governance Bill. The objective is to fortify the governance framework, significantly impacting the performance of SOEs and encouraging potential involvement from private investors. Once enacted into law, the Bill will establish a new entity with a defined mission, outlining clear roles and responsibilities for all stakeholders involved in the governance and oversight of SOEs. ZIJ/15/11/2023