Freetown, Sierra Leone — The National Social Security and Insurance Trust (NASSIT) faces criticism from the Budget Advocacy Network (BAN) for its failure to disclose information on social security contributions. This omission, according to BAN Coordinator Abu Bakarr Kamara, jeopardizes the accuracy of revenue assessment and hampers overall improvements in the Public Expenditure and Financial Accountability (PEFA) assessment.
On Thursday, November 9, 2023, at the Freetown City Council Hall, the budget watchdog unveiled two key reports: “Is the Sierra Leone Budget Credible? An Analysis of Budget Credibility for 2020-2022” and “Will NRA Meet its 2023 Domestic Revenue Target?” These reports have significant implications for the country’s fiscal transparency and accountability.
The PEFA program is an essential framework for evaluating and reporting on the strengths and weaknesses of public financial management (PFM) using quantitative indicators. In the PEFA 2021 report, Sierra Leone received an overall rating of C+ for PI-3 Revenue Outturn. This rating is based on an average of the two dimensions: Aggregate Revenue Outturn and Revenue Composition Outturn.
Sierra Leone achieved an “A” rating for accurate revenue forecasts, indicating that the National Revenue Authority (NRA) consistently collected the revenue it was authorized to collect. However, the report highlights an issue with revenue composition outturn as data compilation for revenue still does not adhere to the Government Financial Statistics (GFS) manual of 2014. Of particular concern is the absence of social security contributions in the budget profile, making it impossible to assess revenue outturn comprehensively.
The dimension for revenue composition outturn was introduced in the 2016 PEFA Framework, focusing on disaggregating tax revenue by primary tax types rather than a general category. Unfortunately, this approach is not yet operational in Sierra Leone, resulting in a score of “D*.”
While the NRA classifies over six revenue sources/streams, including grants, the calculation of revenue composition variance in 2020, 2021, and 2022 was 18.7%, 17.4%, and 25.7%, respectively. This indicates that the variance exceeded 15 per cent in two of the three years. However, the absence of social contributions in the calculation is a critical concern.
In response to the report, Phillip Kargbo from the NRA emphasized that their “A” rating was primarily due to their forecasting abilities. However, he cautioned that revenue outturn should not be confused with revenue adequacy, as only 60 per cent of the revenue is being utilized for government expenditure.
Kargbo mentioned that the NRA had engaged with NASSIT multiple times to obtain the necessary contribution data, but they faced challenges as NASSIT had not published this information. Alhaji Abdullah Alghali, Head of Finance Management at the Accountant General’s Department, acknowledged BAN’s role in advocating for good governance and urged collective commitment to transparency, accountability, and the common good.
Foday Bassie Swarray highlighted the power of the budget in addressing deep-rooted gender inequalities and transforming social and economic relations. He emphasized the need for credible budgeting as it plays a pivotal role in delivering public services and policy-making.
Chinsia Pascho-George, Senior Program Officer at Christian Aid, encouraged the government to improve expenditure rationalization to create an efficient fiscal space for enhanced service delivery. She also recognized the support from stakeholders and stressed the importance of the recommendations outlined in the report.
This intervention received financial support from the Irish Aid Programme Grant III, led by Christian Aid Sierra Leone, as part of BAN’s strategy to strengthen Public Financial Management (PFM) and enhance fiscal discipline.
Ibrahim Junisa, Director of Parliament Budget Office, applauded BAN’s efforts and the importance of the reports, emphasizing that donors often base their contributions on how countries utilize their own resources. He announced that his office had been legislated, which he believed would boost Sierra Leone’s Open Budget Survey score on Parliament. ZIJ/10/11/2023