By Zainab.joaque@awokonewspaper.sl
SIERRA LEONE, Freetown – Government budgetary operations resulted in an overall deficit of Le324.78 billion in the first quarter (Jan – Apr) of 2022, after recording a surplus of Le439.55 billion in Q4-2021.
The deficit ensued from a contraction in total government revenue which more than offset the decline in government expenditure and net lending.
Similarly, primary deficit widened to Le204.16 billion in Q1-2022, up from Le32.17 billion in Q4-2021, according to the Monetary Policy Report June 2022, published by the Monetary Policy Department.
The Central Bank said, total revenues and grants contracted by 40.06 per cent to Le1, 864.88 billion in Q1-2022 compared to Le3,111.29 billion in Q4-2021, driven largely by the decrease in foreign grants relative to the drop in domestic revenue.
In addition, foreign grants received declined significantly to Le244.41billion in Q1-2022, down from Le1,204.79 billion in Q1-2021. Domestic revenue collected fell to Le1,620.47 billion in Q1-2022, down from Le1,906.50 billion in Q4-2021.
The contraction in domestic revenue was attributed to the decline in customs & excise, goods & services tax and non-tax revenue, while income tax revenue increased in the review period.
Receipts from Goods and Services Tax (GST) fell to Le285.08 billion in Q1-2022 from Le326.99 billion in Q4-2021. Receipt from customs and excise tax dropped slightly to Le286.75billion in Q1-2022 from Le299.77 billion in Q4-2021.
Non-tax revenue decreased to Le379.66 billion in Q1-2022 from Le 624.65 billion in Q4-2021. Road user charges declined to Le53.17 billion in Q1-2022 from Le55.86 billion in Q4-2021.
Conversely, revenue generated from income tax increased to Le615.80 billion in Q1-2022 from Le599.23 billion in Q4-2021. Figure 35 shows components of domestic revenue in Q1-2022 and preceding quarters.
In the department’s analysis for the outlook for the fiscal sector, they stated that fiscal operations are expected to remain challenged at least in the near term given the high expenditure requirements of the government to support the recovery program and financing of the general elections in 2023.
However, expected improvement from domestic revenue with the commencement of iron ore operations, and coupled with expected inflows from development partners may help to moderate the likely fiscal pressures.
The Central Bank explained that the overall deficit of Le324.78 billion in Q1-2022 was financed through domestic, foreign and other sources. Of the total deficit, domestic financing amounted to Le767.66 billion, foreign financing amounted to Le70.75 billion, and other sources amounted to Le372.13 billion in Q1-2022. ZIJ/26/9/2022