Freetown, SIERRA LEONE – Sierra Leone’s debt service payments, accounting for an average of 25 per cent of domestic revenues, are projected to reach NLe4.1 billion in 2024. The Minister of Finance revealed this during his presentation of the 2024 Budget, emphasizing the impact on available resources for government priority programs.
According to Minister Sheku A.F. Bangura, the total interest payments for 2024 are expected to be NLe4.1 billion. Of this amount, NLe3.8 billion will be attributed to interest payments on domestic debt, with an additional NLe319 million on external debt.
To enhance the sustainability of public debt, Minister Bangura outlined fiscal consolidation measures. These actions aim to create fiscal space for scaling up spending on the Big Five Game Changers, which are crucial government priority programs.
The Ministry plans to introduce medium to long-term bonds to extend the average maturity, aligning with the updated Medium-Term Debt Strategy. External borrowing will be limited in accordance with program ceilings agreed upon with development partners. The government will also actively seek grant financing and borrow highly concessional loans, particularly for investments in key sectors such as infrastructure.
Additionally, Minister Bangura highlighted the exploration of non-debt-creating financing models, including Public-Private Partnerships (PPPs). Thorough analyses of potential fiscal risks will support these models, ensuring responsible financial management.
The Minister assured the implementation of the Medium-Term Debt Strategy annually to guide public debt management. This includes the execution of the updated Arrears Clearance Strategy and ongoing efforts to enhance debt reporting and transparency through regular publications of debt and contingent liabilities of State-Owned Enterprises (SOEs).
As part of the strategy to strengthen debt management, the government will review the Debt Management Act and deploy a contract profiling tool. Technical assistance from the West African Monetary Institute (WAMI) and the West African Institute for Financial and Economic Management (WAIFEM) will support the development of the domestic debt market, increasing the capacity of domestic investors to engage in longer-term domestic debt. ZIJ/15/11/2023