“Poor budget credibility has hindered the way ministries, department and agencies (MDAs) are able to deliver public services and has led to significant unpredictability in overall budget execution.” This is the view of the Consortium of Non-Governmental Organisations (NGOs) in their report titled “Budget Credibility report 2017-2019: How Credible is the Sierra Leone Government Budget?”
In his explanation, leading author of the report, Abu Bakarr Kamara of the Budget Advocacy Network (BAN) said that the current budget credibility assessment illustrates the persistent Public Financial Management (PFM) challenges. Significant issues he said are identified in the execution of the budget including unpredictable and untimely allocation, some MDAs getting more than their approved budget, some programs within an MDA getting more resources, and the implementation of new programs in-year.
Equally important he added is that aggregate level performance is the credibility of the budget in terms of allocations given to individual MDAs as this provides an indication of whether the MDAs are able to deliver on their key objectives. Although in 2018 and 2019 the Government underspent slightly on aggregate, some MDAs the analysis revealed received far more than Ministry of Energy, the Ministry of Finance and Economic Development. However, the National Electoral Commission had more resources allocated to them than their approved budget.
In 2018, allocations to the Office of the President, Correctional Services, pension payments and the Ministry of Works, Housing and Infrastructure exceeded their approved budget. In 2019, the Office of the President, Pension payments, Ministry of Foreign Affairs and International Cooperation and the Ministry of Works, Housing and Infrastructure were the main MDAs that had more resources than their approved budget. The report showed that allocations to the Office of the President, pension payments and the Ministry of Works, Housing and Infrastructure exceeded their approved budgets, owing to increase in overseas travel (Office of the President) and payment to contractors for road works (Ministry of Housing and Infrastructure).
In addition, allocations are not released on time and this has the tendency to affect the implementation of activities. “Improving budget credibility entails much more than keeping within the appropriation approved by Parliament” Kamara said. He clarified further that this also involves ensuring MDAs are able to get a significant portion of their approved budget on time. “It is imperative that the forecasting of revenues and expenditures over the medium term is improved in order to minimize the in-year adjustments, which have been a regular occurrence over the years.”
Kamara mentioned that with strict adherence to the PFM Act, 2016, and PFM Regulations, 2018, will also contribute towards the implementation of a credible and transparent budget throughout the year. “The new government has displayed commitment in the implementation of measures to increase revenue and rationalize expenditure. This has resulted in lower budget deficits in 2018 and 2019. However, there are major problems in the allocation of resources to MDAs with some getting more than their approved allocation.”
An evolving challenge that will impact on budget credibility for the 2020 budget is the outbreak of the COVID-19 pandemic. Given the fiscal constraint of government, additional resources will be reallocated to the Health sector given that this was an unforeseen situation. Despite this evolving challenge, government should ensure the process of allocating expenditure is done within the ambit of the Public Financial Management Act (PFM, 2016), which requires the submission of a supplementary budget to Parliament.
By Zainab Iyamide Joaque