Freetown, SIERRA LEONE – Government expenditure in Sierra Leone witnessed a significant increase of 14.92 percent to NLe5.17 billion in the second quarter of 2023, surpassing the quarterly ceiling of NLe5.12 billion, according to the Bank of Sierra Leone. Both recurrent and capital expenditures experienced upticks, with discretionary spending identified as the primary catalyst behind the overall rise in total expenditure.
In their Monetary Policy Report, the Bank highlighted that capital expenditure surged by 35.8 per cent to NLe1.85 billion in Q2-2023, up from NLe1.37 billion in Q1-2023. Meanwhile, recurrent expenditure rose by 5.9 per cent to NLe3.3 billion in the same period, driven by an increase in non-salary, non-interest expenditures. The wage bill witnessed a marginal increase, while debt service payments moderated.
Further analysis revealed that total revenue and grants contracted by 4.9 per cent to NLe2.8 billion in Q2-2023 compared to Q1 2023, falling short of the quarterly target of NLe3.2 billion. The reduction was primarily attributed to a decrease in foreign grants received.
Additionally, domestic revenue increased by 3.6 per cent to NLe2.4 billion in Q2-2023 compared to the previous quarter, albeit falling short of the NLe2.5 billion target. The report attributed the growth in domestic revenue to the recovery of tax arrears, the implementation of innovative mechanisms to enhance tax compliance using the Electronic Cash Register (ECR) Dashboard, as well as receipts from licenses and royalties from mining and other sectors.
Tax revenue exhibited an 8.7 percent increase to NLe1.75 billion in Q2-2023 compared to Q1-2023. This broad-based tax revenue increase was observed across all tax components. However, non-tax revenue declined by 9.5 per cent to NLe0.55 billion in Q2-2023 due to a drop in receipts from other departments. Meanwhile, foreign grants received contracted by 33.0 per cent to NLe0.44 billion in Q2-2023 from NLe0.65 billion in Q1-2023, significantly below the quarterly target of NLe0.67 billion. ZIJ/20/11/2023