Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698830144525.pdf (Sierra Leone)
MR. SPEAKER, HONOURABLE MEMBERS I rise to m ove that the Bill entitled “The A ppropriation A ct 2 02 0” being an A ct to authorise expenditure from the C onsolidated Revenue Fund for the services o f Sierra Leone for 2020, be read the first tim e” .

1.

Introduction Mr. Speaker, H onourable M em bers, last y ea r w hen I presented the 2019 Budget, we m ade two hundred and sixteen (216) com m itm ents across eleven (11) policy clusters.
A s at the end o f the third quarter o f this fiscal year, eighty-six (86) per cent o f these com m itm ents have either been com pleted or on track to be com pleted.

The positive gains achieved w ill be sustained in ensuing years.

W e also prom ised that despite the challenges we inherited, we w ill restore m acroeconom ic stability, fiscal discipline and create the en abling environm ent for sustainable growth.

2.
2.

On assum ption o f office governance in 2018, recognising that a stable econom y is a prerequisite for econom ic growth, w e im m ediately took steps to restore the derailed program m e w ith the International M onetary Fund (IMF) and im plem ented tough but necessary policy m easures.

3.
3.

Mr. Speaker, H onourable M em bers, as prom ised in m y address in early N ovem ber 2018, I am delighted to inform this Noble House that the Executive Board o f the IM F approved a new E xtended C redit Facility (ECF) Program m e for Sierra Leone in late Novem ber 2018.

The im plem entation o f the Program m e is progressing well.

The first review o f perform ance w as successful, and the Executive Board o f the IM F approved the disbursem ent o f balance o f paym ent and bu dget support in June 2019.
Technical discussions betw een the IM F and G overn m en t on the second perform ance review un der the program m e are ongoing.

Prelim inary data indicates that w e m et all the q u a n titative p erform an ce criteria and have m ade sign ifica n t p rogress in the im plem entation o f structural benchm arks.

4.
4.

The renew ed relationship w ith the IM F has restored the confidence o f other developm ent partners and has su bsequently led to the disbursem ent o f bu dget support that w as w ithheld under the previous regime.

5.

B uilding on the confidence reposed in the Bio Adm inistration, we have also m obilised about U S$413 m illion, and expect to m obilise an additional U S$200 m illion before the end o f D ecem ber 2019, m ainly from m ultilateral financial institutions.
This w ill bring the total external resources m obilised for variou s projects to U S$613 million, o f w hich 40 percent are grants and 60 percent are concessional loans.

Including resources provided by the E u ropean U nion (EU), United N ations Agencies, the United K in gd om ’s D epartm ent for International D evelopm ent (DFID) and other bilateral partners, total external resources m obilised so far am ounts to alm ost US$1 billion.

6.
6.

Mr. Speaker, H onourable M em bers, we have im proved dom estic revenue collection to 13.7 percent o f GDP in 2018 after stagnating at 12.2 percent in 2016 and 2017; creating the fiscal space to facilitate investm ents in our priority sectors.

7.

To consolidate these efforts, G overnm ent launched the M edium T erm N ational D evelopm ent Plan (2019-2023) in Febru ary this year.
The plan reflects the view s and aspirations o f Sierra Leoneans, lending further credence to the vision articulated in our ‘N ew D irection M an ifesto’.

8.

H um an C apital D evelopm ent, w hich lays the fou ndation tow ards achieving m iddle-incom e country status by 2039, is at the centre o f this Plan.

Accordingly, we are successfully im plem enting the Free Quality School E ducation Program m e launched in 2018.
W e are investing in our children - OUR FUTURE, by su bstantially increasing spen ding on the education sector.

D u ring the 2018/2019 academ ic year, we: i.

Paid exam ination fees for NPSE, B ECE and W ASSC E ; ii.

Provided textbooks, teaching and learning m aterials to schools; iii.

Paid tuition fees for all children in G overnm ent-ow ned and G overnm ent- assisted schools; iv.

Com m enced the School Feeding Program m e in selected districts; v. Provided school buses; vi.
O perationalised the Teach in g Service C om m ission (TSC) for teacher m anagem ent and teacher developm ent; 2 vii.

R evam ped the defunct Technical, Vocational and E ducational Train ing (TVET) Unit in the then M inistry o f E ducation Science and T ech n ology and upgraded to a D irectorate o f TV E T in the new ly-created M inistry o f Tech n ical and H igh er E ducation; and viii.

Launched the E ducation Challenge o f the H um an C apital D evelopm ent Incubator.

9.
9.

In the health sector, we continue to fund the Free H ealth Care Initiative and provide resources for both prim ary and secondary health care services at national and sub-n ation al levels.

W e are prioritising resource allocation to health services targeting our children, adolescents and wom en.

Funds recovered from corrupt persons, as part o f our anti-corruption drive, are also being ring-fenced for the construction o f an u ltra­ m odern diagnostic health centre.
G overn m en t also supports the m onthly national cleaning exercise to im prove sanitation and public hygiene nationwide.

10.

In our quest to leave no one behind, we are providing cash transfers to over 250,000 o f the poorest and m ost vu lnerable in our society.

This is being com plem ented by variou s ongoing you th developm ent and em pow erm ent program m es.

11.
11.

W e also su pported the Sierra Leone Prem ier League, w h ich had been abandoned, as w ell as other sports and recreative program m es to give our you th opportunities to exhibit their talents and im prove their livelihoods.

12.

Mr. Speaker, H onourable M em bers, G overn m en t is gradu ally diversifying the econom y. W e have adopted the N ational Agricu ltu ral Transform ation Program m e, w hich is com prehensive and focused on achieving rice self-sufficiency.
To support this program m e, we have established the Seed C ertification A gen cy and the Fertilizer R egu latory A gen cy to increase the role o f the private sector in the provision o f agricu ltural inputs.

In addition, Cabinet recently approved the Cocoa, Coffee and C ashew Policy to stim ulate production, reaffirm the im portance o f these traditional exports and im prove the livelihood o f our people in the rural areas.

13.
13.

In the fisheries sector, we are im plem enting reform s to ensure the sustainable m anagem ent o f our m arine resources to im prove the dom estic share in m arine catch, w hile creating jo b s for our people.

W e are m aking progress in controlling illegal, unreported and unregulated fishing activities and steps are being taken to address bottlenecks affecting the export o f our fisheries products.

14.
14.

Mr. Speaker, H onourable M em bers, G overnm ent is being deliberate w ith the scope and speed at w hich m easures aim ed at unleashing the full potential o f our tourism sector are being im plem ented.

W e have em barked on an aggressive m arketing cam paign to rebrand our cou n try’s im age and boost tourism to grow the econom y and create jobs.

3 15.
3 15.

Mr. Speaker, H onourable M em bers, interventions in the sectors leading our econom ic diversification agenda are being facilitated by increased investm ents in energy, infrastructure and reform s to im prove the business environm ent.

E lectricity supply has increased and is being extended to previously under-served areas including the Lum ley Beach.
The rehabilitation o f key trunk roads including the Pendem bu -K ailahun, Bo-B andajum a, Hillside B ypass Road Phase II, Lim kokw ing- R egent Road, Hill Cot Road, and Lum ley-Tokeh Road, are all in progress.

16.

Mr. Speaker, H onourable M em bers, building on these reform s, the G overnm ent has also intensified the fight against corruption to restore confidence in the public sector.
I w an t to thank this H onourable House for approving the am endm ent to the A n ti­ Corruption A ct 2008, w h ich provides a robust legal fram ew ork for the eradication o f corruption and further enhances our ability to achieve inclusive growth and development.

17.

Mr. Speaker, H onourable M em bers, it is this progress in the fight against corruption and w ider governance reform s that has resulted in Sierra Leone passing the scorecard o f the M illennium Challenge C orporation (M CC).
Sierra Leone is now eligible for C om pact F u n din g o f up to U S$600 m illion from the MCC.

To sustain this m om entum , Governm ent will continue to im plem ent reform s and undertake investm ents to address existing infrastructure deficits in key sectors.

18.

Mr. Speaker, H onourable M em bers, we cannot em bark on an econom ic diversification and inclusive grow th agenda w ithou t the strengthening and deepening o f our financial sector.
D ue to enhanced su pervision by the B ank o f Sierra Leone, including restrictions on unsecured lending to Politically E xposed Persons, the financial situation o f the two-state owned B anks, Sierra Leone Com m ercial B ank and R okel Com m ercial Bank, w hich had alm ost collapsed, is im proving.

These banks are now in a position to pay dividends for the first tim e in ten (10) years.
To fu rther im prove governance o f the banks, Cabinet has approved the rem oval o f su pervision o f these B anks from the N ational C om m ission for Privatisation and vest such su pervision in the M inistry o f Finance.

19.

Mr. Speaker, H onourable M em bers, our resolve to transform our econom y by m ainstream ing tech nology and innovation has never been stronger.

The D irectorate o f Science, Tech n ology and Innovation (DSTI) collaborating across G overnm ent is leading the efforts.
I am pleased to inform this Noble House that follow ing the launch o f the N ational Digital and Innovation Strategy by His Excellency, on 1st N ovem ber 2019, Sierra Leone is poised to be am on g global leaders in the digital econom y, governance, innovation and entrepreneurship, focusing on effective service delivery.

4 20.

Mr. Speaker, H onourable M em bers, despite these achievem ents, the legacy o f econom ic m ism anagem ent continues to linger.
The econom y is recovering but not sufficiently en ough to m ake a significant dent on poverty.

The 2018 Sierra Leone Integrated H ousehold Survey launched recently, estim ated overall poverty incidence at 56.8 percent and extrem e poverty at 12.9 percent.

21.

Furtherm ore, the M ining Lease A greem ents inherited have not im proved our earnings from the m ining sector.

This has adversely affected our export perform ance causing the Leone to depreciate.
Inflation though m oderating, rem ains high, w eakening the pu rch asing pow er o f our incom es and deepening poverty.

22.

This situation is com pounded by the huge stock o f arrears owed to dom estic suppliers and contractors.

These w ere accum ulated prim arily du ring 2016 and 2017.
The paym ent o f these arrears, together w ith the high debt service paym ents on dom estic debt, w hich w ere also accum ulated during the past ten years, have constrained the fiscal space for spending on the productive sectors and infrastructure.

This has underm ined the public and private sectors’ capacity to create jobs.

The consequence is high levels o f u nem ploym ent especially am ong our youth, w hich has given rise to the slogan, ‘Di Gron Dry’.

23.
23.

Mr. Speaker, H onourable M em bers, the 2020 B u dget is an attem pt to reverse this ugly situation.

W hilst the B u dget w ill continue to focus on scaling-up investm ents in hum an capital developm ent, it also lays out strategies and targeted interventions to develop skills and create jo b s for our citizens, especially w om en and youth.

This will create the w orkforce required for greater labour m arket participation and reduce poverty and inequality.

24.
24.

The B u dget w ill therefore focus on fiscal consolidation for hu m an capital developm en t and jo b creation, enhanced by a thriving private sector w hilst leveraging on science and technology.

25.

Let me at this stage provide you w ith an update on global developm ents and outlook and the relationship w ith the dom estic econom y. II.

Global Economic Developments in 2019 and Outlook 26.
Mr. Speaker, H onourable M em bers, after m ore than four years o f uninterrupted global growth, the pace o f econom ic activities has w eakened.

The global econom y is projected to slow dow n to 3.0 percent in 2019 from 3.6 percent in 2018.

This reflects the decline in m anufacturing output and global trade, due to higher tariffs and prolonged trade policy uncertainty.

5 27.
5 27.

The United S tates’ econom ic grow th is gradu ally slow ing dow n due to the w an in g im pact o f past fiscal stim ulus w hile the u ncertainty su rrou nding Brexit is w eaken in g grow th in Europe.

The Chinese econom y is also slow ing down, as it transitions from an export-led to a services- led grow th model.

28.

In Sub Saharan Africa, the grow th projection has been revised dow nw ards to 3.2 percent in 2019 from an initial projection o f 3.4 percent.
T his is the effect o f prolonged global policy uncertainty, the U S-C hina trade tensions, and w eak grow th in trading partn er countries.

29.

G lobal inflation is projected to rem ain low due to softening energy prices in developed countries and stable currencies in em erging and developing econom ies.

Iron ore prices are expected to fall to US$77 in 2020 from over U S$100 per m etric ton in Septem ber 2019, as a result o f the norm alisation o f m ining disruptions in B razil and Australia.
Sim ilarly, oil prices are projected to fall from $61.8 in 2019 to $57.9 per barrel in 2020.

30.

G lobal econom ic grow th is projected to recover slightly to 3.4 percent, and Sub Saharan A frica to 3.6 percent in 2020.

The global outlook rem ains highly uncertain and su bject to dow nside risks.

These include elevated trade tensions, policy uncertainties, and rising debt levels.

III.

Domestic Economic Developments and Outlook Macroeconomic Performance in 2019 31.
Mr. Speaker, H onourable M em bers, the Sierra Leone econom y is recovering from subdued grow th in 2017 and 2018.

Prelim inary data indicates that the econom y w ill grow by 5.1 percent in 2019 com pared to 3.8 percent and 3.7 percent in 2017 and 2018, respectively.

The recovery o f the econom y is u nderpinned by increased activities in the agriculture sector, higher production o f rutile, increased construction activities, and expansion o f the services sector.
E xcluding iron ore, the econom y is estim ated to grow by 4.5 percent in 2019.

32.

A fter a steady decline from 18.2 percent in A u gu st 2018 to 14.1 percent in Febru ary 2019, inflationary pressu res em erged in M arch 2019.

H eadline inflation increased to 14.8 percent and further up to 15.4 percent in A u gu st 2019.

The increase in dom estic prices in 2019, could be attributed to the depreciation o f the Leone exchange rate w ith pass-through effects on im ported food and non-food prices.
It is expected that the underlying inflationary pressures could m oderate to 14.0 percent by end D ecem ber 2019.

6 33.

Mr. Speaker, H onourable M em bers, the valu e o f exports m ore than doubled to US$556.6 m illion during Janu ary to June 2019 from US$ 234.6 m illion during the same period in 2018.

The sharp increase is accounted for m ainly by re-exports, w hich increased to US$270.7 m illion from U S$13.0 m illion over the corresponding periods.
D om estic exports increased by US$ 64.4 m illion to US$285.9 m illion du ring the first h a lf o f 2019 due to an increase in m ineral and agricultural exports.

34.

The value o f im ported goods increased by 13.5 percent to U S$ 753.8 m illion for the period Jan u ary to June 2019 from U S$ 661.8 m illion du ring the corresponding period in 2018 on accou nt o f the sharp increase in the im ports o f interm ediate and m anufactured goods,s as w ell as m achinery and transport equipm ent.
Food im ports however, dropped by 44.0 percent to U S$ 131.4 m illion during the first h a lf o f 2019.

The value o f rice im ports dropped by 16.4 percent to U S$ 76.6 m illion as im ported volu m es dropped by 13.6 percent to 176 thousand m etric tons du ring the sam e period.

Im port values for beverages and tobacco dropped by 44.2 percent and anim al and vegetable oils by 41.2 percent.

Fuel im ports also dropped by 17.5 percent to U S $ 1 14.8 million.

35.
35.

Due to the sharp increase in total exports including re-exports by US$322 m illion com pared to the increase in im ports o f US$92 m illion, the trade deficit decreased significantly to US$197.1 m illion during the first h a lf o f 2019.

36.
36.

Gross foreign reserves o f the B ank o f Sierra Leone increased to U S$ 533.2 m illion (3.5 m onths o f im port cover) as at end A u gu st 2019 from U S$483 m illion in D ecem ber 2018, reflecting m ainly the disbu rsem ent o f program m e and project grants and balance o f paym ent support by developm ent partners.

37.

The official exchange rate o f the Leone to m ajor international currencies cam e un der pressure during the year.
This reflects the low level o f dom estic exports, as w ell as speculative beh aviou r by local m arket participants.

A s a result, the Leone depreciated by 11.0 percent against the US dollar from D ecem ber 2018 to Septem ber 2019.

38.

Mr. Speaker, H onourable M em bers, relative to end D ecem ber 2018, the external debt stock increased by 2.5 percent to US$ 1.64 billion as at end June 2019.
D ebt owed to m ultilateral creditors am ounted to US$1.2 billion, accou nting for 73.2 percent; bilateral creditors, U S$210 m illion, accou nting for 12.8 percent; and com m ercial creditors, US$ 187 m illion, accou nting for 11.4 percent.

39.

The stock o f dom estic debt am ounted to Le 6.1 trillion, equ ivalent to U S$ 635.6 m illion as at end June 2019, an increase by 7.5 percent relative to the stock as at D ecem ber 2018.

7 Budgetary Performance in 2019 40.


Mr. Speaker, H onourable M em bers, public finances continue to im prove in 2019 reflecting the im pact o f G overn m en t’s sustained fiscal consolidation drive.

Total revenue collected during the first h a lf o f the year exceeded the IM F program m e target w hile overall expenditures rem ained w ithin the budgeted limits.
The im plem entation o f the 2019 budget w as how ever challenged by the need to pay som e o f the inherited dom estic arrears to ensure continued service delivery in strategic sectors.

The situation w as exacerbated by the high debt service paym ents, especially on dom estic debt.

D espite these constraints, the budget execu tion rate as at end Septem ber 2019 w as 72 percent.

41.
41.

Mr. Speaker, H onourable M em bers, total revenue collected betw een Jan u ary and Septem ber 2019, am ounted to Le4.1 trillion or 10.8 percent o f GDP.

T his exceeded the target for the first three quarters o f the yea r by Le278 billion.
Incom e taxes am ounted to Le1.42 trillion; Goods and Services T a x (GST), Le756.2 billion; Im port Duties, Le529 billion; Excise D uty on petroleum products, Le410 billion; M ineral royalties, Le196.3 billion; R oyalty on fisheries am ounted to Le77 billion; other M DAs including T S A agencies collected Le523 billion.

Road U ser charges am ounted to Le90.4 billion.

42.
42.

Mr. Speaker, H onourable M em bers, the key contributing factors to the im proved revenue perform ance include: broadening o f the T reasu ry Single Account; the continued im plem entation o f the liberalised petroleum pricing form ula; the m igration to A S Y C U D A W orld; the adoption o f the EC O W AS C om m on External T a riff (CET); im provem ent in tax en forcem ent by the N ational Revenue A u th ority (NRA); and intensive taxpayer education and trade facilitation.

43.
43.

B u dget grants received during Jan u ary to Septem ber 2019 am ounted to Le 815.3 billion.

O f this, Le 521.3 billion w as budget support, disbursed by the W orld Bank and the A frican D evelopm ent Bank.

Project grants am ounted to Le287.1 billion.

44.

Mr. Speaker, H onourable M em bers, total expenditure and net lending for Jan u ary to Septem ber 2019 is estim ated at Le5.9 trillion.
R ecu rrent expenditures am ounted to Le4.3 trillion, o f w hich w ages and salaries are Le1.8 trillion; subsidies and transfers, Le576.1 billion; and interest paym ents, L e 8 9 1.3 billion.

Dom estic capital expenditure am ounted to Le708.0 billion; foreign funded capital expenditures am ounted to Le639.6 billion.

45.

The overall deficit, including grants for Jan u ary to Septem ber is estim ated at Le1.6 trillion (4.2 percent o f GDP).
Including grants, the deficit is Le.756.8 billion (2.0 percent o f GDP).

8 Medium-Term-Economic Outlook: 2020-2022 46.

Mr. Speaker, H onourable M em bers, the m edium -term econom ic outlook is favourable.

The econ om y is projected to further expand by an average o f 4.7 percent du ring 2020 to 2022.
The m ain sources o f m edium -term grow th prospects are: (i) sector reform s to enhance productivity an attract investm ent in agriculture, fisheries and tourism ; (ii) scaled up G overnm ent investm ent in rice produ ction; (iii) resum ption o f iron ore m ining and expansion in other m ining activities; (iv) increased public and private investm ents in the energy sector; (v) scaling up o f construction and rehabilitation o f trunk, city and feeder roads; (vi) increasing investm ent in hum an capital developm ent with a focus on vocational and technical training; (vii) im plementation o f regu latory and financial sector reform s to im prove the ease o f doing business inclu ding the establishm ent o f the N ational Investm ent Board; (viii) increased support to Sm all and M edium Enterprises; (ix) establishm ent o f Special E conom ic Zones and (x) continued efforts to im prove governance including the im plem entation o f public financial m anagem ent reform s and intensifying the fight against corruption.
47.

O ver the m edium -term , inflation is expected to m oderate and return to single digits in 2021.

This w ill be driven by the expected increase in dom estic food production, stabilisation in the exchange rate, and proactive m onetary policy com bined w ith prudent fiscal policy.

48.

The im plem entation o f donor-funded projects is also anticipated to increase foreign exchange inflows, create jo b s and increase private consu m ption w ith positive im pact on econom ic growth.

49.
49.

The sustenance o f fiscal consolidation efforts w ill lead to a reduction in the overall budget deficit to an average o f 3.0 percent o f GDP during 2020-2023.

The current account deficit w ill n arrow dow n to 10.2 percent o f GDP in 2020 and fu rther dow n to 8.9 percent in 2022, as exports increase in the m edium -term .

Gross foreign reserves w ill rem ain above three m onths o f im port cover.

50.
50.

The favourable outlook o f the econom y w ill enable us to m ake significant progress tow ards m eeting the m acroeconom ic convergence criteria for the introduction o f the single currency in W est A frica in 2020.

Sierra Leone w ill benefit from a larger regional m arket, w hich will attract investm ent to the country thereby prom oting grow th and creating jo b opportunities.
To this end, the M inistry o f Finance, in collaboration w ith the B an k o f Sierra Leone, w ill continue to im plem ent prudent m acroeconom ic policies to ensure the achievem ent o f the convergence criteria.

9 Risks to the Outlook o f the Sierra Leone Economy 51.

Mr. Speaker, H onourable M em bers, while the m edium -term prospects o f the econ om y are bright, they are subject to dow nside risks w hich include: I .
C ontinued closure o f the iron ore m ines and its attendant negative im pact on growth, revenues, foreign exchange and inflation; II.

H igher-than-expected rise in international fuel prices w ould increase the im port bill and negatively im pact foreign reserves, exchange rate, and inflation; III.

D elays or non-disbu rsem ent o f bu dget support and other donor financing would constrain governm ent spending on priority sectors such as education, health, infrastructure, and social protection; IV.
N on-paym ent o f dom estic arrears w ould affect the stability o f the banking system , hence its ability to provide credit to the private sector w ith adverse im plications for grow th and em ploym ent; and V. Failure to m aintain the current m om entum in the im plem entation o f policy reform efforts w ould eventually lead to loss o f policy credibility and w eaken investor and donor confidence in the econom y. IV.

Macroeconomic Policies for Job creation 52.


Mr. Speaker, H onourable M em bers, you th u nem ploym ent is cu rrently high.

Therefore, it is im perative that em ploym ent creation be central to econom ic policy form ulation in the short to m edium -term .

In this context, the design and im plem entation o f m acroeconom ic policies in 2020 w ill not only aim at safegu arding m acroeconom ic stability but also focus on creating a supportive environm ent for em ploym ent creation.
Fiscal, m onetary, exchange rate and debt m anagem ent policies w ill be re-oriented to achieve em ploym ent growth, poverty reduction and m acroeconom ic stability.

Fiscal Policy 53.

Mr. Speaker, H onourable M em bers, fiscal policy in 2020 w ill seek to strike an appropriate balance betw een revenue m obilisation, trade facilitation and im proving the ease o f doing business, in order to achieve the twin objectives ofjob creation and hum an capital developm ent.
Domestic Revenue Mobilisation Measures (A) Investment-friendly Tax Policies 54.

Mr. Speaker, H onourable M em bers, the 2020 Finance Bill, w hich I w ill lay for enactm ent by this H onourable House, proposes several policy m easures to increase revenue and at the sam e tim e create the enabling environm ent for bu sinesses to thrive and create em ploym ent opportunities.

These include: 10 i .

R eduction in the Corporate Incom e T ax Rate from 30 percent to 25 percent.
Th is w ill not only strengthen tax com pliance but also enable SM Es to enter the form al sector and big bu sinesses to expand investm ent and increase productivity, thereby creating jo b opportunities; ii.

A ll raw m aterials, sem i-processed and finished products, properly labelled for use as input into the production o f goods by m anufacturing com panies w ill attract an im port duty o f 5 percent instead o f 20 percent; iii.
Products im ported by Packaging Industries w ill attract an im port du ty o f 10 percent; iv.

A ll aviation related charges w ill be exem pt from the paym ent o f GST.

These include landing and parking fees, aircraft towing, aircraft cleaning, baggage handling, aircraft security as w ell as aircraft fuelling.
The objective is to reduce the cost o f travel to Sierra Leone in order to boost tourism and create jo b opportunities; v. Exem ption o f GST on free and prom otional calls and free data use to the extent that the value o f such supply does not exceed 10 percent o f the total calls and data use in that period; vi.

Exem ption o f GST on financial services adm inistered by C om m ercial Banks, Com m unity Banks, Micro Finance Institutions and the A pex Bank.

vii.
vii.

Introduction o f credit relief utilisation for group o f com panies in order to ensure fast utilisation o f tax credits and reduce the overall tax burden on group o f com panies; and viii.

Introduction o f a rebate or refund system for personal incom e tax filers paying excess o f the actual assessed tax liability.

(B) Revenue Enhancing Tax Policies 55.

The 2020 Finance Bill is also proposing the follow ing revenue m easures: i.
In trod u ce tra n sfer p ricin g leg isla tio n to en su re co n sisten c y w ith international best practice and m inim ise transfer m ispricing and revenue loss from related party transactions; ii.

Section 2 o f the C ustom s A ct 2011 has been revised to clarify w hat constitutes raw m aterials, interm ediate inputs and packaging m aterials; and iii.

Introduce a specific provision for addressing m isuse on du ty waivers.

11 (C) Duty and Tax Waiver Policy 56.


Mr. Speaker, H onourable M em bers, every year, G overnm ent loses substantial revenues from tax and duty exem ptions.

For the first three quarters o f 2019 alone, revenue lost to im port GST and custom s duty w aivers am ounted to m ore than Le 500 billion.

O f this, 40.3 percent w ere those granted to international organisations, 23.5 percent to donor-funded projects and 16.5 percent to private investors.

57.
57.

In line w ith recom m endations o f the Review C om m ittee on D uty and Tax Exem ptions, a D uty and T ax W aiver Policy has been developed and w ill be subm itted to Cabinet for approval and subsequ ently a D uty and T ax Exem ptions Bill w ill be tabled before Parliam en t for enactm ent.

The aim is to rationalise and harm onise exem ptions in order to to m inim ise revenue loss and create a level playing field going forward.
C onsistent w ith this fram ework, G overnm ent w ill institute a review o f the fiscal regim es in all existing agreem ents.

In addition, we w ill soon conclude discussions w ith developm en t partners on elim inating D uty and T a x Exem ptions on all donor-funded projects.

(D) Improving Tax Administration 58.


Mr. Speaker, H onourable M em bers, in addition to the above policies, the N ation al Revenue A u th ority w ill be im plem enting several adm inistrative m easu res to boost revenue collection and prom ote trade facilitation: I. Digitising Tax Collection 59.

Mr. Speaker, H onourable M em bers, currently, m ost o f the tax collection processes are largely m anual and unintegrated.
To im prove the adm inistration o f dom estic taxes and boost dom estic revenue collection, the N ation al Revenue A u thority (N R A ) is autom ating and integrating the processes and procedures for collecting taxes.

In this regard, in 2020, the N R A w ill introduce the follow ing: i. the Integrated T ax Adm inistrative System (ITAS), to autom ate and integrate dom estic tax adm inistration; ii.
the E lectronic Cash Register (ECR) w ith the aim o f enhancing efficiency in the adm inistration o f GST and im proving com pliance; and iii.

the single electronic w in dow w hich w ill serve as a one-stop shop for the paym ent o f custom s and excise duty, GST and incom e taxes.

This will reduce clearance and transaction costs and help facilitate trade.

60.
60.

Mr. Speaker, H onourable M em bers, the introdu ction o f these digital system s w ill facilitate the availability o f tax adm inistration data for analytical work.

G overnm ent is therefore, collaborating w ith our developm ent partners to establish a data w arehouse.

This initiative w ill im prove transparency, efficiency and reduce leakages in tax adm inistration, thereby enhancing revenue m obilisation.

12 II.

Enforcing Tax Compliance 61.


The N ational R evenue Au th ority w ill continue to enforce existing and new tax legislation; including provisions in the F inance A cts in order to im prove tax com pliance.

To achieve this, the N R A w ill undertake the following: i .

Intensify the enforcem ent o f tax legislation throu gh enhanced m onitoring, intelligence and investigations; ii.
Strengthen collaboration w ith international partners to enhance N R A ’s capacity to undertake specialised tax and transfer pricing audits; iii.

C o n tin u e to im p lem en t a ro b u st tax ed u c a tio n p rogra m m e and com m unication strategy; iv.
U ndertake a rented property census in the m ajor cities, in collaboration w ith the City Councils, to establish a reliable and com plete rental incom e tax database; v. Im plem ent a special tax regim e for professionals and other ‘high net w orth ’ individuals; vi.

Im plem ent the D om estic T ax P rep arer’s Schem e and sim plify the tax regim e for SM Es to encourage them to enter the form al sector and create m ore job s; vii.
O perationalise the Excise Stam p D uty regim e to reduce sm uggling o f im ported alcoholic, tobacco, and other products; viii.

Enforce the provisions in the 2020 Finance A ct relating to custom ers who fail to request for GST receipts after pu rchasing from GST registered businesses; and ix.

Beneficiaries o f GST R elief Purchase Order (GRPO) are now required to m ake upfront tax paym ents and w ill be refunded w ithin 90 days upon filing o f a tax reclaim .

Local Councils Revenue Mobilisation 62.


Mr. Speaker, Honourable M em bers, in 2020, em phasis will be placed on building the capacity o f local councils to efficiently m obilise ow n-source revenue; beginning w ith the autom ation o f property cadastre system s in city and m u nicipal councils.

This will reduce their dependence on transfers from the C entral G overnm ent.

13 63.
13 63.

In this regard, the M inistry o f Finance and the M inistry o f Local G overnm ent w ill collaborate to undertake the following: i.

A utom ate the property cadastre system in C ity and M unicipal C ou ncils; ii.

C onduct a com prehensive chiefdom finance study; iii.

Provide technical support to local councils for the determ ination o f their individual revenue potentials; and iv.

Prepare and issue revised guidelines for revenue collection and sharing betw een local and chiefdom councils.

64.
64.

Mr. Speaker, H onourable M em bers, the ongoing review o f the D ecentralisation Policy and the Local G overnm ent A ct 2004, provides an opportunity to address som e o f the u n clear policies and conflicting laws that are constraining local revenue m obilisation efforts.

In order to strengthen fiscal decentralisation, the M inistry o f Finance w ill use the revised law to develop a fiscal decentralisation policy and strategy.
G overnm ent w ill also provide fun ding for revenue generating projects at the local level in a tim ely m anner.

Expenditure Management and Control Measures 65.


Mr. Speaker, H onourable M em bers, to im prove public expenditure m anagem ent and control, G overnm ent w ill em bark on reform s to im prove the integrity and sustainability o f the G overnm ent payroll; im prove the qu ality and efficiency o f non­ salary; n on-interest recurrent and capital expenditures; and strengthen expenditure controls on other recurrent expenditures.

(i) Improving the Integrity and Sustainability o f the Payroll 66.
Mr. Speaker, H onourable M em bers, several reform s to im prove the integrity and sustainability o f the G overnm ent payroll are ongoing.
Som e o f these reform s include the cleaning up o f N A S S IT and B B A N num bers o f public sector em ployees to address cases o f dual em ploym ent; autom ation o f the payroll o f Sub-Vented Agencies and public tertiary institutions; nationw ide biom etric verification o f all public sector em ployees; and the introduction o f payroll qu ality assurance m easures.

In the past year, the variou s clean-up exercises have resulted in the rem oval o f about 4,500 em ployees from the payroll.

67.
67.

W hile these reform s have to som e extent im proved the integrity o f the payroll, several anom alies continue to em erge, threatening the su stainability o f the W age Bill.

These include w eaknesses in m an-pow er planning; incom plete and inconsistent payroll records for som e em ployees; and the absence o f a body responsible for oversight 14 and developing polices relating to the term s and conditions o f public sector workers.
To address these anom alies and consolidate the gains m ade so far, the G overnm ent w ill continue to im plem ent the findings o f the N ational Civil Registration Au thority (NCRA) biom etric verification exercise; strengthen the m an-pow er planning process; and develop a follow-up Payroll Strategy.

68.

Mr. Speaker, H onourable M em bers, plans are at an advanced stage for the establishm ent o f the W ages and Com pensation Com m ission.
V ery shortly, I w ill be subm itting to this House a Bill for the establishm ent o f the Com m ission.

The W ages and C om pensation C om m ission w ill take forward som e o f the payroll reform s including aligning the m ultiple pensions laws and harm onising pay and rem u neration across the public sector.

(ii) Strengthening Expenditure Controls on Other Recurrent Expenditures 69.
Mr. Speaker, H onourable M em bers, the M inistry o f Finance w ill continue to vigorously pursue expenditure control measures, through rationalisation o f expenditures, backed by stronger com m itm ent control and cash m anagem ent.

This is aim ed at reducing w astefu l expenditures, reducing subsidies to State-O w ned Enterprises (SEOs) and forestalling the continuous build-up o f arrears that has been a m ajor fiscal challenge in recent years.
To this end, G overnm ent w ill im plem ent the follow ing m easu res: (a) Improving the performance of State-Owned Enterprises 70.

Mr. Speaker, H onourable M em bers, State-O w ned E nterprises continue to pose significant risk to the Budget.

There are issues o f poor financial perform ance, w eak governance, inadequate investm ent and substantial arrears.

The estim ated liabilities as at end 2018, is approxim ately Le1.5 trillion.

71.
71.

Between Janu ary and Septem ber 2019, the G overnm ent provided Le98.7 billion as subsidy to the E lectricity D istribution and Su pply A u th ority (EDSA) to ensure the sustainable supply o f electricity.

Should the cu rrent trend continue, E D SA w ould require about L e 3 1 1 billion in subsidies for the 2020 fiscal year due to technical and non -tech n ical losses.

This is clearly not fiscally sustainable.

72.


Mr. Speaker, H onourable M em bers, consistent w ith the Public Financial M an agem ent A ct 2016, m y M inistry w ill therefore continue to strengthen the fiduciary oversight o f SOEs and m anagem ent o f fiscal risks w ith the view to redu cing the burden on the budget.

To this end, a Fiscal Risk Com m ittee com prising high-level public officials, draw n from relevant M D As and the B ank o f Sierra Leone w ill be constituted.
15 (b) Fleet Management Policy 73.

To m inim ise expenditures on the repair and m aintenance o f vehicles assigned to public servants, G overnm ent has developed a Fleet M anagem ent Policy, w hich has been approved by Cabinet.

The M inistry o f Tran sport and A viation is leading the developm en t o f a detailed im plem entation plan w ith support from the M inistry o f Finance.

(c) Overseas Travel Policy 74.


Mr. Speaker, H onourable M em bers, G overnm ent has developed a policy regulating the provision o f D aily Subsistence A llow ance (D S A ) and other allow ances for official trips abroad.

The policy w ill be subm itted to Cabinet for approval.

This Policy w ill enable G overnm ent to rationalise expenditures and guide the selection process for official overseas travel.

75.
75.

This Policy w ill apply to all officials o f institutions covered by the Public Financial M anagem ent Act, 2016; all entities o f G overnm ent established by an A ct o f Parliam ent and any person selected as an agent o f G overnm ent or entities in w hich G overnm ent has controlling equity or exposure.

76.

The cost o f air tickets also increases G overnm ent expenditure on foreign travel.
To address this anom aly, G overnm ent will introduce the B illing and Settlem ent Plan (B S P) system designed to facilitate and sim plify the selling, reporting and rem itting procedu res betw een travel agents and airlines.

T h is w ill m itigate the cu rrent irregularities in travelling overseas by preventing fraud and over-invoicing.
It w ill also increase G overnm ent tax collection through a transparent database and ensure the application o f a single exchange rate for the issuance o f tickets in Sierra Leone.

Strengthening Commitment Controls 77.

G overnm ent w ill continue to strengthen com m itm ent control system s to avoid the accum ulation o f arrears.

In 2019, the M inistry o f Finance w ith support from DSTI autom ated the PET form s for the processing o f budgetary requests from M DAs.
The im plem entation o f the autom ated PET form s w ill com m ence in 2020 and is expected to m inim ise expenditure overruns and arrears build-up.

Upgrading IFMIS 78.

The Integrated Financial M anagem ent Inform ation System (IFMIS) has been rolled out to fifty-six (56) M DAs, thereby decentralising som e com ponents o f the paym ent process.
In 2020, the IFM IS w ill be upgraded to the w eb-based hybrid version, exten ded to Local C ouncils, and su b sequ en tly to ou r E m bassies and Project Im plem entation U nits (PIUs) to further decentralise and im prove accessibility.

16 Broadening the Scope o f the Treasury Single Account (TSA) 79.

Mr. Speaker, H onourable M em bers, the operation o f the T S A com m ence in 2018 w ith six sem i-autonom ous Agencies.

Follow ing the enactm ent o f the Finance Act 2019.
The coverage w as broden in 2019 w ith additional five (5) sem i-autonom ou s Agencies.

80.

W hile the T S A has enabled G overnm ent to m obilise additional revenue into the C onsolidated Fund, idle cash balances continue to exist in the accounts o f M DAs especially Sub-vented Agencies that receive bulk disbursem ents.

To ensure efficient cash m anagem ent, G overnm ent w ill com m ence the im plem entation o f Phase II o f the T S A in 2020.
This w ill broaden the scope o f the T S A to include all Sub-vented and Sem i­ A u ton om ou s Agencies.

81.

A n analysis o f receipts from T S A Agencies, show s that in 2019 total estim ated collection w as Le480.3 billion w hile transfers w ere Le399.7 billion.

This represents 83 percent o f total T S A collection.

W e are cu rrently analysing the operating expenses o f T S A A gencies and w ill com m ence negotiations w ith them to increase the am ou nt to be retained for use on goods and services.
Strengthening the Internal Audit Function 82.

Mr. Speaker, H onourable M em bers, in 2019, the G overnm ent A u dit Com m ittee w as established in the M inistry o f Finance, and over seventeen (17) A u d it Com m ittees w ere reconstituted in variou s MDAs.

The G overnm ent A u dit Com m ittee oversees the operations o f the other audit com m ittees and follow s up on unresolved au dit issues.
T h is a rr a n g e m e n t w ill c o n tin u e to e n h a n c e th e im p le m e n ta tio n o f a u d it recom m endations o f both internal and external au dit reports.

D edicated audit team s have been established to carry out regular audit o f the G overnm ent payroll and public debt paym ents.

The capacity o f the Internal A u d it Unit w ill also be strengthened to carry out ICT-related audits.

Institutionalising Public Expenditure Tracking Surveys 83.
Mr. Speaker, H onourable M em bers, the Public E xpenditure T rackin g Survey (PETS) has been revived to generate baseline data for im proving public financial m anagem ent and service delivery.

The 2019 PETS covered the procurem ent and distribution o f drugs; teaching and learning m aterials, and textbooks; paym ent o f school fee-subsidies to schools; and fertiliser to farm er-based organisations for the 2017 and 2018 financial years.
The findings w ill be discussed w ith stake holders and recom m endations w ill be im plem ented to im prove service delivery.

Developing an Electronic Funds Transfer System 84.

Mr. Speaker, H onourable M em bers, the m anu al processing o f paym ent instructions to the B ank o f Sierra Leone (BSL) by the A ccou n tan t G en eral’s D epartm ent (AGD) has resulted in delays and errors o f om ission and involves significant transaction 17 costs.
Th is is because in terbank funds transfer betw een B SL and the AGD cannot be done electronically as the IFM IS system at the AGD is not integrated w ith the system at BSL.

To address this constraint, an E lectronic Funds Tran sfer (EFT) System is being developed to carry out the follow ing functions: i.
Provide the A ccou n tan t G en eral’s D epartm ent w ith the capability to m ake cashless and paperless disbursem ents to recipients and beneficiaries o f G overnm ent paym ent obligations through the B ank o f Sierra Leone; ii.

Enable the real tim e processing o f all paym ent transactions from the A ccou n tan t-G en eral’s Departm ent; and iii.

Provide for a seam less reconciliation process betw een the B ank o f Sierra Leone and the A ccou n tan t G en eral’s Departm ent.
Rent for Government Offices 85.

Mr. Speaker, H onourable M em bers, G overnm ent spends billions o f Leones on rent for G overnm ent offices.

Prelim inary review s indicate that these rents are over­ bloated and there is possible collusion betw een occu pants and the landlords.

W hilst G overnm ent is seeking fundin g to construct perm anent structures for offices, effective Jan u ary 2020, the M inistry o f W orks and Public A ssets will assess the valu e o f all rented buildings.
H enceforth, all rental requests w ill be channelled throu gh the M inistry for assessm ent and approval before paym ent.

Strengthening Public Procurement 86.

Mr. Speaker, H onourable M em bers, the stringent policies o f the N ational Public Procu rem ent A u th ority (NPPA) and adherence to procurem ent processes resulted in huge savings to the value o f seventy m illion dollars ($70 million).
A m on g others, N PPA (i) introduced specialised standard bidding docum ents and now review s bidding docum ents and evaluation processes before aw ards are made; (ii) reviewed the Public Procu rem ent R egulations to include a clear m andate for the introdu ction and im plem entation o f electronic procurem ent; (iii) discouraged procuring entities from the use o f sole source and restricted bidding; and (iv) now produ ces quarterly price norms.

87.
87.

In the com ing years, the M inistry o f Finance, in collaboration w ith NPPA, w ill ensure that all procuring entities prepare credible and realistic procurem ent plans w hich are linked to the activities in their budgets and this w ill be the basis for disbursem en t o f bu dgetary resources.

The N PPA w ill also publish annu al procurem ent assessm ent reports, starting w ith the report on procurem ent activities o f M D As in 2018.

18 88.
18 88.

Mr. Speaker, H onourable M em bers, G overnm ent has realised that m ost o f the beneficiaries o f local contracts, even for local produ cts like firewood, vegetables and bread, are not resident in the delivery locality (districts) but in Freetow n or other regional capitals.

This does not facilitate the even spread o f the national w ealth and encou rages further m igration into the cities w here such opportu nities exist.

89.
In order to encourage local participation in our procurem ent processes, distribute the national w ealth am ong districts and encourage people to be resident in their districts, Cabinet has directed that effective Jan u ary 2020, only persons perm anen tly resident in the delivery locality (districts) w ill be eligible to apply for all contracts aw arded by Local and C entral G overnm ent for local products, such as firewood, vegetables and bread as w ell as civil w orks contracts not exceeding Le 500 million.
The M inistry o f Finance and the N PPA shall put in place the necessary statutory arrangem ents to effect this.

90.

Mr. Speaker, H onourable M em bers in a bid to strengthen transparency and accountability in public procurem ent, G overnm ent established the In dependent Procu rem ent R eview Panel (IPRP) pu rsu ant to Section 20 o f the Public Procurem ent A ct 2016.
The IPR P provides a com plaint m echanism for dissatisfied and aggrieved contractors to seek redress if they believe that there have been irregularities w ith the outcom e o f the procurem ent bidding and award o f contract process in w hich they participated.

91.

Since the reconstitution o f the Panel, in the last six m onths, the IPR P has review ed public procurem ent contracts am ounting to Le 40 billion.
The IPR P has restored confidence o f businesses as w ell as developm ent partners in our procu rem ent system .

Th ese dem onstrates that G overnm ent is serious abou t reducing w astages and providing an equitable and level playing field during the procu rem ent o f goods, w orks and services.

Contract Management 92.


In the area o f contract adm inistration, proper and effective procedu res w ill be established to ensure we have a firm grip over the creation, execution, and analysis o f G overnm ent contracts.

This is to m axim ise operational and financial perform ance w hile redu cing financial risks associated w ith those contracts, especially the build­ up o f arrears that could not be detected easily.

Improving the Management o f Donor and Domestic funded Capital projects 93.
Mr. Speaker, H onourable M em bers, G overnm ent w ill henceforth enter into contracts for the im plem entation o f dom estically funded capital expenditu res in local currency to lim it the exchange rate risk.
To speed up im plem entation and im prove quality o f delivery o f dom estic and foreign funded capital projects, the M inistry o f 19 Finance and the M inistry o f Planning and Econom ic D evelopm ent (MoPED) have established a tw o-tier oversight system : an Inter-M inisterial Com m ittee provides policy oversight o f projects w ithou t com prom ising laid down rules and procedures w hile a Tech n ical Im plem entation Com m ittee m onitors and evaluates the im plem entation o f developm ent interventions.
94.

To im prove efficiency in the public investm ent process, G overnm ent in collaboration w ith the Fiscal Affairs D epartm ent o f the International M onetary Fund (IMF) w ill condu ct a Public Investm ent M anagem ent A ssessm ent (PIMA) in Decem ber 2019.

T his assessm ent w ill highlight the strengths and w eaknesses o f our public investm ent system s and proffer recom m endations for im proving decision-m aking process and capital expenditure rationalisation.

95.
95.

Mr. Speaker, H onourable M em bers, in addition, G overnm ent is review ing the draft National Public Investm ent M anagem ent Policy for adoption before the end o f 2020 guide capital expenditure planning, execution and coordination; as w ell as appraisal o f developm ental projects for inform ed decision-m aking.

96.
96.

To im prove on the design o f projects and preparation o f national plans, G overnm ent w ill introduce a planning system that links W ard-level planning w ith Districts to M DAs and the national portfolio o f Public Investm ents Projects (PIP).

MoPED w ill collaborate w ith the M inistry o f Local G overnm ent to develop the system .

97.
97.

Furtherm ore, G overnm ent has operationalised the N ational M onitoring and Evaluation Departm ent (NaMED) in the M inistry o f Planning and Econom ic D evelopm ent (MoPED).

NaM ED, in collaboration w ith DSTI, is developing an autom ated M anagem ent Inform ation System for m onitoring and evaluation o f public expenditure on developm ent projects in the M edium -Term N ational D evelopm ent Plan.
The disbursem ent o f budgetary allocations to projects w ill henceforth be triggered by the su bm ission o f satisfactory m onitoring reports by NaM ED.

98.

On the im plem entation o f feeder roads, G overnm ent w ill establish a Feeder Road B asket Fund in w hich all funds for feeder roads w ill be channelled.

This is to facilitate the coordination o f the im plem entation o f feeder roads projects.

4.2 Public Debt Policy 99.


Mr. Speaker, H onourable M em bers, as reported earlier, external debt is estim ated at US$1.6 billion and dom estic debt at Le6.1 trillion (about U S$650 million) as at end June 2019.

The total stock o f public debt (external plus dom estic) is equivalent to 62.8 percent o f GDP as at end Ju ne 2019, m aking Sierra Leone one o f the highly- indebted countries in Sub-Saharan Africa.
The current level o f public debt is a consequence o f aggressive borrow ing by the past adm inistration, particu larly after Sierra Leone benefitted from about 70.0 percent reduction in the stock o f external debt un der the H IPC and M D RI debt relief Initiatives in 2016.

20 100.

Given the high stock o f dom estic debt, debt service paym ents accou nt for about 25.0 percent o f dom estic revenue, crow ding out poverty-related spending, particularly in health and education.
It also poses significant rollover and refinancing risks w hich im pedes G overnm ent efforts to drive dom estic interest rates downw ards.

101.

Mr. Speaker, H onourable M em bers, G overnm ent rem ains com m itted to prudent debt m an agem ent practices anchored on the M edium -Term D ebt M anagem ent Strategy, w hich addresses key issues in both dom estic and external debt.
G overnm ent w ill im plem ent the new Strategy to enable it to m eet its financing needs at m inim al cost consistent w ith pru dent degree o f risks.

R egular D ebt Sustainability Analyses (DSA) w ill also be undertaken ahead o f the annu al budget cycle to provide early w arning signals on debt levels and the risks o f debt distress to inform debt m anagem ent policy.
In line w ith the M edium -Term D ebt Strategy, G overnm ent w ill introduce m edium to long-term bonds for long-term financing needs such as infrastructure w hile utilizing short-term treasury bills for cash m anagem ent and short-term bu dget financing needs.

Th is w ill also help low er refinancing and foreign cu rrency risks.

102.
102.

To ensure debt sustainability, G overnm ent w ill continue to seek grant financing or borrow at highly concessional term s to finance investm ents in key sectors o f the econom y in cluding infrastructure.

G overnm ent w ill also explore non-debt creating financing m odels such as Public-Private Partnerships supported by a thorough analysis o f the potential fiscal risks and w ithou t recourse to G overnm ent guarantees.

Clearance o f Verified Domestic Suppliers and Contractors Arrears 103.
Mr. Speaker, H onourable M em bers, the debt situation is com pounded by the huge stock o f dom estic suppliers and con tractors’ arrears accrued by the past Adm inistration.

The total am ount o f claim s o f arrears, subm itted to the A u ditor General for verification, w as estim ated at Le10.7 trillion inclusive o f unpaid chequ es o f Le 909 billion held at the B ank o f Sierra Leone.
Recent arrears verification by G overnm ent, in collaboration w ith the IMF, estim ates that as at A p ril 2018, dom estic arrears am ounted to Le 3.2 trillion (about U S$340 m illion) o f w hich, 90 percent w ere accrued in 2016 and 2017.

104.

The accum ulation o f arrears owed to dom estic contractors does not only threaten m acroeconom ic and banking sector stability, it also underm ines G overnm ent’s efforts in im plem enting econom ic recovery program m es.
It also im pacts negatively on private sector businesses, particularly those w hose exposu res to their bankers continue to accum ulate interest charges.

105.

Mr. Speaker, H onourable M em bers, to address this situation, G overnm ent, in collaboration w ith the IMF, has developed an A rrears Clearance Strategy w ithin the context o f the M edium -Term Expenditure Fram ew ork w ithou t constraining financing o f new program m es.
The strategy will be u nderpinned by transparency, fairness and equity in the treatm ent o f the suppliers and contractors.

21 106.

Given the lim ited fiscal space, the strategy involves a com bination o f outright cash paym ents at deep discounts or ‘h aircu t’ and agreeing on a credible m edium -term paym ent plan w ith the creditors, backed by the issuance o f prom isory notes or zero- coupon instrum ents.

Securitisation is considered as the last option.


Priority w ill be given to social security and w age arrears as w ell as those affecting grow th sectors.

A rrears that threaten financial sector stability w ill also be prioritised.

107.

Mr. Speaker, H onourable M em bers, the clearance strategy w ill be financed from increased bu dgetary support disbursem ent from our donor partners as w ell as resources from our enhanced dom estic revenue m obilisation drive.
G overnm ent has com m itted about US$30 m illion in 2020 as outright cash paym ent to partially liquidate the stock o f arrears.

Monetary Policy 108.

Mr. Speaker, H onourable M em bers, the objective o f m onetary policy in 2020 is to lower and stabilize dom estic prices in order to support the m uch-needed investm ents that w ould lead to sustainable econom ic grow th and jo b creation.
W hile price stability rem ains the core m andate o f the B ank o f Sierra Leone, the stance o f m onetary policy w ill also take into consideration the need to support private sector investm ents.

This w ould be through increased and affordable credit to the private sector, w ith a view to creating jo b opportunities.
The B SL w ill continue its assessm ent o f prevailing econom ic conditions and m ake adjustm ents to the m onetary policy rate to control inflationary pressures w ith out constraining econom ic recovery.

This policy stance will be supported by the fiscal consolidation efforts o f G overnm ent and the ongoing financial sector reform s. 109.
The availability o f unique identification num bers from the biom etric civil registration exercise and K IV A project, w ill enhance credit risk assessm ent by the C redit R eference Bureau.

Th is com bined w ith the C ollateral Registry w ill increase com m ercial ban k lending to the private sector, thereby su pporting investm ents and creating jobs.

110.
110.

Mr. Speaker, H onourable M em bers, the B SL w ill also seek to fu rther develop and deepen the interbank m arket to enable m arket participants to respond effectively and appropriately to m onetary policy signals.
The B ank o f Sierra Leone w ill continue to enhance its com m unication strategy w ith stakeholders such as com m ercial banks, m anufacturers, petty traders, the C ham ber o f C om m erce and Industry, im porters and exporters, the D ollar Boys and Forex B ureau s on m onetary policy issues.

22 Exchange Rate Policy 111.

Mr. Speaker, H onourable M em bers, the exchange rate w ill rem ain ‘m arket- determ in ed ’ to ensure the com petitiveness o f the econom y and adjustm ent to shocks.
This is expected to benefit businesses engaged in export-oriented activities in the m edium -term .

112.

Mr. Speaker, H onourable M em bers, the foreign exchange m arket w as m arred by excess volatility in 2019, attributed m ainly to the increased dem and for foreign exchange for the im portation o f fuel and rice com bined w ith speculative activities.

The B ank o f Sierra Leone considers exchange rate as a key determ inant o f econom ic grow th, m acroeconom ic and financial stability.
Therefore, the B ank o f Sierra Leone recently issued directives aim ed at reducing the hoarding o f foreign cu rrency and redirecting it to the banking system , as w ell as prohibiting off-shore forex transactions.

113.

The B SL w ill continue w ith efforts to sm oothen excess volatility in the exchange rate through its intervention in the W holesale Foreign Exchange M arket as and w hen necessary.

The B ank w ill also enforce the provision in the B SL A ct 2019 on quoting and trading in Leones.
This im plies that it is illegal for individuals and bu sinesses to condu ct transactions in Sierra Leone using any currency other than the Leone.

114.

The B SL is also w orkin g w ith relevant stakeholders to develop guidelines for enforcing the requirem ent to repatriate export proceeds through the dom estic banking system .
T h is w ill be com plem en ted by G overn m en t efforts to facilitate tim ely disbursem ent o f project and program m e loans and grants in order to increase the supply o f foreign exchange in the banking system .

G overnm ent is also im plem enting reform s to enhance the productivity o f the sectors o f the econom y w ith the potential to generate foreign exchange from exports.

Financial Sector Reforms 115.


Mr. Speaker, H onourable M em bers, the B an k o f Sierra Leone rem ains com m itted to deepening financial interm ediation, prom oting financial inclusion and safeguarding the stability o f the financial system.

116.

A s part o f on-going efforts, the B SL conducted stress testing o f the resilience o f the ban king system in 2019.
K ey financial sou ndness indicators revealed that the ban king sector is w ell capitalised, liquid, profitable, and w ith a continuou s reduction in non -perform in g loans (NPLs).

117.

In 2020, the B ank o f Sierra Leone w ill continue to strengthen the financial sou n dn ess o f banks, w hile exertin g stronger oversight over their cross-border relationships.

The B ank o f Sierra Leone is also developing a D eposit Insurance Schem e to prom ote financial sector stability.

23 118.
23 118.

Mr. Speaker, H onourable M em bers, w hilst the two state-ow ned banks are now profitable, in line w ith the recom m endations o f the recent W orld Bank/ IM F diagnostic study, en h anced-supervision by the B ank o f Sierra Leone w ill rem ain.

T his will continue until Sierra Leone Com m ercial B ank and the R okel Com m ercial B ank develop sound long-term business strategies and a legal and regulatory fram ew ork for corporate governance, am ong others.

119.
119.

In a bid to strengthen the regulatory fram ew ork for digital financial services, the B an k o f Sierra Leone is developing several guidelines including: T iered K now -Y our- C ustom er Fram ew ork; A gen t N etw ork Guidelines; E-M oney Guidelines; and will am end the O ther Financial Services A ct o f 2001.

120.
120.

To accelerate financial inclusion, the B ank o f Sierra Leone is collaborating w ith local and international partners to leverage on em erging technological advancem ents in the financial sector.

A s part o f the W orld B ank funded Financial Sector D evelopm ent Project, the procurem en t o f the N ational Sw itch is in progress.

Once operational, the N ation al Sw itch w ill create a single, integrated and efficien t platform for the settlem ent o f interban k electronic paym ents.
It w ill also allow u niversal access to digital transactions, th ereby reducing the dependency on cash and associated risks.

B ank cu stom ers w ill be able to m ake w ithdraw als from any A T M , irrespective o f w hich institution they bank with.

Eventually, E-com m erce activities w ill be user-friendly, safer and faster, through the electronic settlem ent o f all financial transactions.

121.
121.

Mr. Speaker, H onourable M em bers, w ork on enhancing the collateral registry at the B ank o f Sierra Leone is in progress.

This is being augm ented by the creation o f a credible C redit R eference Bureau based on a nationw ide digital identification system .

Th is w ill ultim ately provide credit and financial histories for citizens, ensure the availability and exchange o f reliable credit inform ation and u ltim ately accelerate nation-w ide financial inclusion.
V. Sectoral and Structural Policies for Job Creation 122.

Mr. Speaker, H onourable M em bers, G overnm ent w ill adopt a tw o-pronged approach to em ploym ent creation in 2020.

Firstly, G overnm ent w ill continue to im plem ent the enabling policies to attract foreign and dom estic investm ent to create job opportunities.

Secondly, G overnm ent w ill com plem ent these m easures w ith sector specific and targeted interventions to create jobs for our youths.
Enabling Policies to attract Private Investments for Job creation 123.

Mr. Speaker, H onourable M em bers, G overnm ent recognises that the private sector is the engine o f econom ic growth, econom ic transform ation and the provider o f qu ality jobs.

G overnm ent w ill therefore im plem ent the follow ing m easures: 24 Improve the Ease o f Doing Business 124.
Mr. Speaker, H onourable M em bers, according to the W orld Bank, im proved perform an ce on the D oing B u siness indicators could resu lt in low er levels o f un em ploym ent and poverty.

The recently launched 2020 W orld B ank D oing B usiness R eport ranked Sierra Leone at 163 out o f 190 countries w ith a score o f 47.5 out o f 100, w hich is below the Sub-Saharan average score o f 51.8.
A part from the ‘Starting a B u sin ess’ Indicator, where Sierra Leone is ranked 58, better than other reform ers like G h an a and K enya, our perform ance over the years in the other indicators such as Paying Taxes, G etting Electricity, R egistering Property, D ealing w ith Construction Perm its and Protecting M inority Investors has been relatively weak.

125.
125.

A s part o f this A d m in istration ’s plan for au tom ating G overnm ent services, D STI in collaboration w ith the M inistry o f Trade and Industry, the M inistry o f Finance and other M DAs, has collected and analysed data on ongoing reform s and existing processes; produced and validated end-to-end business process m aps for the ten ranked D oing B usiness indicators.

126.
126.

Mr. Speaker, H onourable M em bers, to su pport efforts at im proving our ranking, the G overnm ent and the W orld B ank are in the process o f finalising an E conom ic D iversification Project, w hich has a com ponent focused on im plem enting selected D oing B usiness reform s. 127.

In preparation for the ‘Doing Business’ com ponent o f this project, the Governm ent in collaboration w ith the W orld Bank, has developed a D oing B u siness R oadm ap.
The recom m endations contained in this Roadm ap and the m apping process done by the DSTI w ill inform the preparation o f a com prehensive ‘D oing B u siness A ction P la n ’.

Establishment o f the National Investment Board 128.

Mr. Speaker, H onourable M em bers, we believe that there is the need for a central institution backed by the highest office in the land to provide a single-w indow for investm ent, especially in critical sectors o f the econom y.
In light o f this, C abinet has approved the establishm ent o f the N ational Investm ent Board (N IB ).

The policy and legal fram ew ork for the Board are being put together for Cabinet approval and su bsequ en t ratification by Parliam entary.

129.

The NIB w ill be the G overn m en t’s principal policy-m aking body on investm ent, responsible for facilitating and coordinating all issues relating to investing in the country.
Chaired by His Excellency the President , the Board w ill bring together Senior M inisters to coordinate the delivery o f investm ent priorities across MDAs.

The operational arm o f the Board w ill provide pre-start up, start-up and post-care services to investors.

25 Establishment o f Special Economic Zones (SEZs) 130.
Mr. Speaker, H onourable M em bers, the establishm ent o f Special E conom ic Zones (SEZs) w ill facilitate rapid econom ic grow th and create jo b s by leveraging tax and non-tax incentives to attract m ore investm ents.

131.
To this end, in 2020, G overnm ent under the leadership o f the M inistry o f Trade and Industry and the M inistry o f Finance will: (i) review the existing SEZ policy to ensure that it is responsive to the latest global developm ents and is aligned w ith the w ider grow th strategy o f the Governm ent; (ii) produce a clear im plem entation strategy for SEZ developm en t fully integrated in national indu stry policy and econom ic developm en t strategy; (iii) undertake feasibility studies and develop a m aster plan to ensure the viability and long-term sustainability o f the SEZs based on real m arket dem and; (iv) establish a sound legal and regulatory fram ew ork for transparent SEZ operations and to provide protection and certainty to developers and investors; (v) establish high-level leadership and inter-agency coordination involving m any governm ent stakeholders; and (vi) ensure careful planning o f zone developm ent, inclusive o f assessm ents o f basic infrastructure, such as energy, w ater and roads.
132.

Mr. S p eak er, H on ou ra b le M em bers, G overn m en t w ill also stren gth en com plem entary policies required for the success o f SEZs such as building local supply capabilities, im proving hum an resource developm ent throu gh skills training, providing specialised infrastructure such as energy and roads, and strengthening labou r m arket regulations and social protection.

Investing in Critical Infrastructure 133.


Mr. Speaker, H onourable M em bers, the im pact o f w eak infrastructure on the operating costs o f businesses, especially firm s in the m anufactu ring industry, cannot be overem phasised.

To this end, we are investing in infrastructure such as energy, transport and ICT that are critical for reducing the cost o f business transactions and connecting businesses to m arkets.

134.
134.

Plans are u nderw ay for the rehabilitation o f the therm al pow er plants at the Kingtom Pow er Station.

The construction o f the 6 M W Solar Park at New ton w ill be com pleted in 2020.

G overnm ent is also im plem enting the W orld B ank funded E nergy Utility Reform Project to rehabilitate the transm ission and distribution lines in Freetow n to reduce technical losses in electricity generation.

135.
135.

Th e D ep artm en t for In tern ation al D evelopm ent (DFID) and the A frican Developm ent Bank (ADB) are funding the rehabilitation and extension o f the transmission and distribution netw ork in Bo, K enem a and su rrou nding villages.

The rehabilitation o f the Dodo H ydro dam and the DFID funded constru ction o f 100 m ini-grids for rural com m unities is in progress.

The Cote D ’Ivoire, Liberia, Sierra Leone and G uinea (CLSG) regional electricity project is at an advanced stage.
The project is expected to im prove 26 access to cheap and reliable electricity in Bo, Kenem a, Freetow n and other parts o f the country.

G overnm ent w ill also restore electricity to Kailahun, Bonthe, Pujehun, M oyam ba, Kabala, and K am bia towns.

136.

Mr. Speaker, H onourable M em bers, G overnm ent w ill continue investing in the construction and rehabilitation o f roads nationwide.
W hilst we rem ain com m itted to com plete on goin g road construction projects, we w ill be guided by the principles o f prudent financial m anagem ent.

Follow ing a stocktake o f ongoing road construction projects, G overnm ent signed M O U s w ith six road contractors to com plete the construction o f m ore than 58 km o f roads across the country.

G overnm ent plans to undertake feasibility studies for the construction o f an additional 1,944 km o f roads nationw ide.

137.
137.

Mr. Speaker, H onourable M em bers, to im prove our ICT infrastructure, G overnm ent has acquired a concessionary loan o f US$30 m illion through Exim B ank o f China for the residual w ork on the N ational Fibre O ptic B ackbone Infrastructure Project.
W e have initiated engagem ents w ith relevant stakeholders, both in the public and private sectors, to kick start the procurem ent process for the deploym ent o f a Digital Terrestrial M ultim edia Broadcast (DTMB) platform that w ould im prove the broadcast sector nationwide.
W e are also actively engaging the private sector to scale-up investm ents in the infrastructure needed for the delivery o f affordable, reliable and accessible m obile and internet connectivity, to drive the cou n try’s digital revolution.

These investm ents w ill be com plem ented by other initiatives to im prove our hum an capacity in digital skills and knowledge; ICT related policy, legal and regulatory fram ew orks; and im proving Inform ation and C yber Security.

Improving Governance 138.


Mr. Speaker, H onourable M em bers, to enhance the potential im pact o f business regulatory reform s in im proving the business clim ate, G overnm ent w ill continue to strengthen econom ic governance.

E m pirical evidence show s that there is a positive relationship betw een good governance and the direction and volu m e o f both foreign direct and local private investm ents.

139.
139.

The G overn m en t’s com m itm ent to im proving transparency and accou ntability has resulted in Sierra Leone scoring 50.9 in the 2018 Mo Ibrahim Index and ranking 26 out o f 54 countries.

Sierra Leone also m aintained a score o f 3.2 in the 2018 W orld B ank C ountry Policy and Institutional A ssessm ent (CPIA) and is im proving its perform ance on other international governance benchm arks.

140.
140.

Mr. Speaker, H onourable M em bers, Governm ent rem ains com m itted to tackling corruption in accordance w ith the A n ti C orruption A ct 2008 (as am ended) and investing in m easu res to drive the needed behavioural change.

27 141.

Mr. Speaker, H onourable M em bers, in his address to this Noble House, the President reiterated his G overn m en t’s com m itm ent to drive behavioural change by lau nch in g a N ational Civic Education Program .
The overarching goal o f the Civic Education for D evelopm ent Program is to em pow er citizens through know ledge and skills acquisition, to internalise positive attitudes and valu es to m ake m eaningful contributions to sustainable developm ent processes.

Accordingly, the N ational Council for Civic Education and D evelopm ent (NaCCED) has been established as an institution.

142.
142.

In 2020, NaCCED will design and com m ence the im plem entation o fa Com m unity Civic E ngagem ent for D evelopm ent program that will enable com m unities across the coun try to keep abreast w ith h appenings at the national level through video m essaging and com m u nity feedback.

143.

Sustained good governance and econom ic stability are expected to strengthen donor and investor confidence.

W e will, therefore, continue in this direction.

Targeted Interventions for Job Creation 144.


Mr. Speaker, H onourable M em bers, w hile im plem enting m acro-econom ic policies and im proving the business clim ate rem ain essential, the benefits o f these policies and their im pact on living standards m ay take tim e to yield the desired results in term s o f em ploym ent growth.

Therefore, these policies should be com plem ented w ith targeted interventions to support jo b creation and higher utilisation o f hum an capital.

145.
145.

Mr. Speaker, H onourable M em bers, the availability o f jo b s is the m ost predictable m eans by w hich our you th s can acquire the m uch needed ‘bread and butter’.

Given the urgent need to create jo b opportunities for our youth, especially those in the inform al sector, G overnm ent w ill be im plem enting the follow ing job- creating targeted interventions in 2020: Supporting Small and Medium Scale Enterprises (SMEs) 146.
Mr. Speaker, H onourable M em bers, as a result o f ru ral neglect, since the 1980s, w e have experienced increased m igration to urban towns, particularly Freetow n and the provincial capitals.

W e have also experienced an increase in the num ber o f early school leavers.

These m igrants and the early school leavers, as w ell as our m others and sisters, are engaged in inform al activities on sm all and m edium -scale.

147.
147.

Overall, at least 70 per cent o f the active labou r force in urban tow ns is engaged in inform al sector activities.

Existing research suggests that lim ited access to finance constitutes the critical barrier to start or expand on sm all businesses.

Currently, a few NG O s and financial institutions provide finance for SM E activities.

Past interventions o f G overnm ent have been politicised, faced w ith faulty im plem entation strategies or delivery m echanism s, m aking them unsustainable.
28 148.

Mr. Speaker, H onourable M em bers, after a careful review, G overnm ent is re­ introdu cing a national m icro credit schem e. The schem e w ill be executed by the M inistry o f Trade and Industry using NGOs, M icro Finance Institutions, Com m ercial B an ks and C om m u n ity B an ks as im plem enting partners.
The design w ill conform to all principles o f a sustainable m icro-credit schem e and a com prehensive operations m an ual w ill be developed to guide the im plem entation and m onitoring.

149.

Betw een 2020 and 2022, G overnm ent w ill provide Le 100 billion for m icro­ enterprises developm ent targeting 20,000 people o f w hich seventy percent are w om en and thirty percent are youth.
In 2020, Le 21 billion has been allocated to setup and pilot the schem e. Th is am ount w ill be progressively increased in ensuing years.

150.

Mr. Speaker, H onourable M em bers, additionally, an am ou nt o f U S$ 20.3 m illion has been allocated under the planned W orld B ank funded Sierra Leone E conom ic D iversification P roject to facilitate SM E grow th and stim ulate entrepreneu rship in high-grow th productive sectors by addressing critical firm level and sector level constraints.
The project also includes the establishm ent o f two SM E business solution centres to im prove access to services such as registration, licensing and perm its, and business advice and technical assistance for SM Es and startups.

T his project will support the regularisation o f SM Es that are still in the inform al sector w hile the G overnm ent continues to sim plify the process o f doing business.

Labour Based Public Works 151.


Mr. Speaker, H onourable M em bers, over the years, in spite o f the vast resources spent on road construction and rehabilitation, m ost o f the feeder roads, especially in the ru ral areas rem ain in deplorable conditions.

T h ey need to be rehabilitated after every rainy season.

The Local C ouncils and the Sierra Leone R oads A u th ority have no capacity in term s o f equipm ent and trained labour at the district level to rehabilitate and m aintain roads.

152.
152.

Th e practice has been to contract feeder road reh abilitation and road m aintenance to private com panies.

The costs o f these contracts have often been over­ bloated and the quality o f the w ork has been poor.

Also, the protracted contracting processes result in delays in m aintenance, leading to further deterioration o f the roads.

153.
153.

C om m encing in 2020, the SLRA, in collaboration w ith the Local Councils, will be required to procure and contract road construction and m aintenance services locally and em ploy you th s from their com m unities throu gh labou r-based public w orks supported by m achinery.

Therefore, you th s w ill be engaged in the rehabilitation, reconstruction and u pgrading o f feeder roads nationwide.
T h ey w ill be provided w ith the requisite capacities to undertake public w orks at chiefdom and district levels.

29 154.

G overnm ent w ill strengthen the capacity o f Sierra Leone R oads Au thority (SLRA) at the district level by providing equipm ent including graders, excavators, loaders etc.

G overnm ent w ill source external support to acquire the equipm ent for all 22 Local Councils.

E very year, the SLR A w ill consult w ith each Local C ouncil to decide on specific roads to be rehabilitated.
155.

Mr. Speaker, H onourable M em bers, in 2020, the G overnm ent has earm arked a total o f 1,000 km o f roads across the country for reconstruction w ith the potential o f em ploying 5000 youths.

Therefore, G overnm ent through the bu dget and the Road M aintenance Fund, w ill provide the required funding for operational costs, labour and m aintenance o f the equipm ent.

The m ode o f collaboration betw een SLR A and Local C ouncils w ill be defined in the form o f an MoU.
The M inistry o f W orks and Public Assets, the Sierra Leone Roads Authority, the Road M aintenance Fu nd and M oPE D w ill all m aintain their oversight and quality assurance roles to ensure valu e for m oney.

Establishing Chiefdom Youth and Military Farms 156.

Mr. Speaker, H onourable M em bers, at least tw o-thirds o f our you th are in agriculture, m ainly rice farm ing.

Thus, the best option is to su pport them to engage in agriculture.
In line w ith President B io ’s pledge, G overnm ent through the M inistry o f You th Affairs, w ith strong technical support from the M inistry o f Agriculture and Forestry, w ill provide assistance in the form o f tractors, im proved seedlings, processing equipm en t and training in extension services to our youth, in selected chiefdom s in all districts.

157.

Mr. Speaker, H onourable M em bers, G overnm ent spends large am ounts o f m oney on the purchase o f im ported rice for the security forces.
W ith technical support from the M inistry o f A griculture and Forestry (MAF), the A gricultural U nit o f the M ilitary w ill be supported to cultivate 5,000 hectares o f land.

W ith expected yield o f three m etric tons per hectare, total produ ction is estim ated at 15,000 m etric tons.

This w ill partly substitute im ported rice provided to the Military.
It is projected that in three years, all rice consum ed by the security forces w ill be produced locally through this schem e. Tree Planting and Afforestation 158.

Mr. Speaker, H onourable M em bers, there is w orrying evidence o f deforestation for varying purposes.

In light o f this, and against a background o f m udslides and several flash floods, G overnm ent w ill lau nch a N ational Afforestation Program m e to be im plem ented through the M inistry o f A gricu ltu re and Forestry.
The com ponents shall include the provision o f im proved variety tree seedlings, tools and equipm ent, training and civic education and social m obilisation for environm ental protection.

This program m e w ill initially target 10,000 youths, o f w hich at least 50 per cent w ill be wom en.

30 Expanding Technical and Vocational Education and Training 159.
Mr. Speaker, H onourable M em bers, G overn m en t’s utm ost priority is to ensure that our you th acquire the requisite skills and training to su pport m eaningfu l em ploym ent.

160.

To achieve this, the M inistry o f T ech n ical and H igher Education has developed the Tech n ical and V ocational Education Train in g (TVET) Policy and revam ped the Tech n ical and V ocational E ducational Train in g (TVET) D epartm ent in the M inistry.
This policy w ill guide the review and standardisation o f the curriculum and certification for TV E T to produce candidates with the skills needed in both the public and private sectors.

It will also provide the fram ew ork for the im plem entation o f m easures aim ed at im proving the quality o f TV E T provision, particu larly in areas w ith a high potential for jo b creation.

161.

In addition, G overnm ent w ith the support o f partners is establishing T echnical Institutes in all sixteen districts.
However, som e o f the facilities require rehabilitation w hile m ost lack the requisite tools and equipm ent for effective technical education.

Therefore, G overnm ent w ill rehabilitate the existing facilities, construct additional facilities and provide them w ith the required furniture, tools and equipm ent.

Training w ill take place in rented prem ises in districts w here there is no perm anent structure and resou rces w ill be m obilised to constru ct perm anent structures in the next three years.
Establishing a National Apprenticeship System 162.

Mr. Speaker, H onourable M em bers, w hile the form al TV E T w ill target early school leavers and those w ho cannot pursue university education, G overnm ent will collaborate with partners to establish a N ational Apprenticeship System .

This system w ill target you th w ho cannot read or write or have very low level o f form al education.

Such a system w ill serve as a pathw ay for getting you n g people into skilled trades.

163.
163.

Mr. Speaker, H onourable M em bers, Apprenticeship schem es have been su ccessful all over the world.

The M inister o f H um an R esource D evelopm ent in India once said, “The apprenticeship training is one o f the sources to develop skilled m an pow er for industry, by using training facilities available in the establishm ents w ithou t putting an extra burden on the E xchequ er to setup training infrastru ctu re” .
I im plore Private Sector Partners, Non G overnm ental O rganisations and D evelopm ent Partners, to support us in this venture.

Empowering Persons Living with Disability 164.

Mr. Speaker, Honourable M em bers, this Governm ent is an inclusive Government.

W e w ill leave no one behind.

Our brothers and sisters w ho live w ith disabilities rely on handouts for their livelihood.

It is em barrassing to see them chasing vehicles for handouts and sleeping in shanty hom es and shops.
A s a caring Governm ent, w e will 31 com m ence a project that w ill provide skills training and m icro credit for persons living w ith disabilties.

It is estim ated that 2,000 persons living w ith disability w ill be targeted in the next three years for econom ic em powerm ent.

Beach Sanitation, Security and Safety 165.

Mr, Speaker, H onourable M em bers, Sierra Leone is endow ed w ith vast stretches o f beaches, m ost o f w hich are pristine.
In recent years, seaw eed and challenges w ith proper solid w aste disposal during the rainy season m ake the beaches filthy and unfit for use.

W hile we are electrifying the beaches and providing w ater facilities, we m ust also im prove sanitation, secu rity and safety along the beaches.

This w ill prom ote both international and dom estic tourism .

166.

G overn m en t w ill hire you th to serve as beachcom bers (cleaners), beach m arshals (security) and lifeguards throu ghou t the year.
In 2020, G overnm ent plans to em ploy at least 3,000 you th s for the cleaning, secu rity and safety o f our beaches, m ostly in the W estern Area.

Sports 167.

Mr. Speaker, H onourable M em bers, the condu ct o f a su ccessfu l Prem ier League in the 2018 to 2019 football calen dar provides abundant evidence that sports, is a significant source o f direct and indirect jo b s for our youths.

A dditionally, football stim ulates econom ic activities.
Therefore, G overnm ent w ill increase its su pport to the condu ct o f the national football league.

Entertainment 168.

Mr. Speaker, H onourable M em bers, a unique com ponent o f our tourism prom otion strategy is the developm ent o f our local entertainm ent industry.

Throu gh this industry, we can further engage the w ider w orld on our folklore, culture and traditions through m usic, dram a, film and other creative arts.

169.
169.

Therefore, as the final com ponent o f our sectoral strategy for jo b creation G overnm ent will, therefore, provide resources to strengthen the collaboration betw een the private sector and relevant state institutions to drive the developm ent o f Sierra L eon e’s entertainm ent industry w ith a focus on jo b creation and creating linkages w ith international m arkets.

VI The 2020 Budget Total Resource Envelope for FY 2020 170.
Mr. Speaker, H onourable M em bers, the projected total bu dgetary resources for the 2020 Financial Y ear processed through the C onsolidated R evenue Fund will am ount to Le8.24 trillion com prising dom estic revenue o f Le6.47 trillion, budget support o f Le 1.0 trillion, and dom estic financing o f Le873.9 billion.

32 171.
32 171.

The other category o f resources com prising project loans and project grants to be disbursed by developm ent partners through com m ercial banks and in som e cases the B ank o f Sierra Leone for the financing o f projects in variou s sectors are projected at Le1.08 trillion.

172.
172.

Mr. Speaker, H onourable M em bers, on the basis o f the expected increase in econom ic activities and the revenue m obilisation m easures highlighted earlier in this Statem ent, dom estic revenue is projected to increase to Le6.47 trillion (14.9 percent o f GDP) in 2020 from the estim ated am ount o f Le5.30 trillion (14.3 percent o f GDP) in 2019.
Incom e T axes w ill contribute Le2.27 trillion; Goods and Services T a x (GST), Le1.24 trillion; C ustom s and Excise Duties, Le1.46 trillion, R oyalty and Licenses on m inerals and petroleum , Le322.1 billion; Royalties and Licenses on fisheries, Le122.7 billion; Parastatals dividends, Le60.0 billion; revenues from other G overnm ent departm ents includin g TS A agencies and royalty on tim ber exports w ill am ount to Le789.7 billion.
Road U ser C harges and vehicle licenses w ill contribute Le124.8 billion to dom estic revenue in 2020.

Expenditure Priorities and Allocations 173.

Mr. Speaker, H onourable M em bers, total expenditure and net lending for 2020 w ill am oun t to Le9.35 trillion (21.5 percent o f GDP) com pared to the estim ated Le7.69 trillion (20.5 percent o f GDP) for 2019.
O f this, recurrent expenditure w ill am ount to Le6.48 trillion (14.9 percent o f GDP) and capital expenditure and net lending to Le2.7 trillion (6.6 percent o f GDP).

Foreign-financed capital expenditures are projected at Le1.81 trillion (4.2 percent o f GDP) and dom estic funded capital expenditu res at Le1.1 trillion (2.6 percent o f GDP).

Wages and Salaries 174.

The G overnm ent w age bill is projected to increase to L e 3 .17 trillion in 2020 from Le 2.59 trillion in 2019.
The increase o f Le586.6 billion w ill cover the w age bill o f the U niversities and Colleges, bringing into the payroll 5000 teachers, 3000 health sector w orkers and 1000 police office in 2020.

175.

Follow ing the im provm ent in the conditions o f service o f health w orkers salaries o f teachers are increased by 30 percent, to su pport hum an capital developm ent effective A p ril 2020.
To im prove the living conditions o f low -incom e earners, G overnm ent is increasing the m inim um w age from Le500,000 to L e6 0 0 ,000 per month.

176.

Mr. Speaker, H onourable M em bers, the role o f the political leadership in councils is critical in the delivery o f services that supports local econom ic developm ent.

However, this has not reflected in the rem uneration o f M ayors or C hairpersons and their Deputies.
This has negatively affected the m orale and effectiveness o f council political leadership.

W hilst we expect the review o f the D ecentralisation Policy and Local G overnm ent A ct to su bstantively address these issues am ongst others, a first step is taken to introduce paym ent o f salaries to M ayors/C hairpersons and their D eputies effective A pril 2020.

In the sam e vein, sitting fees and transport allow ances for C ouncillors w ill also be increased.

33 177.
33 177.

Mr. Speaker, H onourable M em bers, in addition to the political leadership in councils, the core s ta ff o f councils are w orkin g in a very difficult condition w ith low salaries and m orale.

This situation has posed a challenge to attract and retain com petent and qualified sta ff to w ork in local councils.

T his m ust change if councils are to truly deliver im proved services at the local level.
A s a first step in this direction, the salaries o f core s ta ff o f councils w ill be increased effective A pril 2020.

178.

Mr. Speaker, H onourable M em bers, G overnm ent is aw are o f the critical role o f Param ou nt C hiefs in supporting service delivery at the local level.

To this end, G overnm ent is com m itted to restoring the dignity o f Param ount Chiefs and Tribal Heads in the W estern Area.
A s a first step in this direction, G overnm ent w ill increase rem uneration to Param ou nt Chiefs and 12 other chiefdom functionaries.

179.

However, a Local and C hiefdom C ouncils s ta ff audit and biom etric verification w ill be conducted before the increase is effected.

Debt Service Payments 180.

Total interest paym ents w ill am ount to L e 1 .23 trillion in 2020.
O f this, interest paym ents on dom estic debt w ill am ount to Le1.10 trillion w hile Interest paym ents on external debt, Le120.5 billion.

The repaym ent o f principal on external debt is projected to am ou nt to Le579.1 billion in 2020.

Other Recurrent, Domestic and Foreign Capital Expenditures 181.

Mr. Speaker, H onourable M em bers, the bu dgetary allocations for 2020 is consistent w ith the priorities o f Governm ent, as articulated in the M edium Term N ational D evelopm ent Plan (2019-2023).
H um an C apital D evelopm ent rem ain the topm ost priority o f G overnm ent, followed by econom ic diversification and infrastructure developm en t to prom ote sustainable econom ic grow th and jo b creation.

Cluster One: Human Capital Development Education 182.

Mr. Speaker, H onourable M em bers, total bu dgetary allocation to the education sector is Le1.4 trillion, representing 22 percent o f total prim ary expenditures.
The Free Q uality School Education Program m e rem ains G overn m en t’s flagship.
To deepen its im plem entation, G overnm ent is allocating Le317.2 billion in the dom estic capital bu dget to cover the procurem ent o f teaching and learning m aterials, school fee subsidy, school feeding program m e, and paym ent o f exam ination fees for NPSE, BECE, and W ASSC E. The sum o f Le3.0 billion is provided for rehabilitation and refu rbishm ent o f D istrict T echnical Institutes and T eacher T raining Colleges.
G overn m en t’s counterpart contributions to the rehabilitation o f Fou rah B ay College w ill am ount to Le5.0 billion and to the construction o f the new IPAM cam pu s is also Le 5.0 billion.

34 183.

The w age bill for teahers is projected at Le657.6 billion w hile that o f Tertiary U niversities and C olleges w ill am ount to Le200.5 billion.
From the recurrence budget the sum o f Le122.0 billion is allocated to the M inistry o f H igher and Tertiary E ducation including Le80.0 billion as grant in aid.

The M inistry o f B asic and Secondary E ducation is allocated Le26.1 billion including Le10.2 billion as G rants to G overnm ent B oading Schools.

184.

D evelopm ent partners inclu ding the W orld Bank, BADEA, Saudi Fund, OFID, EBID and DFID will disburse L e 1 .92 trillion to support variou s projects in the education sector.
Transfers for the devolved fu nctions in the E ducation Sector w ill am ount to Le9.4 billion leones.

Health 185.

The H ealth sector is allocated Le674.2 billion, representing 11 percent o f the total budget.
O f this am ount, Le51.2 billion is from the recu rrent budget including Le13.1 billion to support prim ary health care services for M alaria, TB and H IV/AID S prevention and control; Le5.5 billion for Reprodu ctive and Child Health Care Services; Le19.2 billion for H ospital and Am bu lance Services.

The W age bill for H ealth sector w orkers w ill am ount to Le345.1 billion in 2020.

186.

In addition, a total o f Le37.2 billion is allocated to the health sector from the dom estic capital budget.
O f this, Le7.0 billion in addition to the Le15 billion from recovered m oney from the A C C is for the constru ction o f a D iagnostic H ealth Centre and Le1.0 for the construction o f a W arehou se at K erry Town.

A n am ount o f Le51.3 billion is allocated to the N ational M edical Supplies A gen cy for the procu rem ent o f Free H ealth Care and C ost R ecovery Drugs.

187.
187.

The W orld Bank, G lobal Fund, GAVI, CDC, IDB Kuw aiti Fund and B AD E A will disburse about Le 291.2 billion for the im plem entation o f variou s projects in the health sector.

G overn m en t’s counterpart contribution to these projects w ill am ou nt to Le24.0 billion.

188.

The am oun t o f Le82.3 billion allocated for devolved functions in the health sector covering solid w aste m anagem ent, m onthly cleaning exercise, District H ospitals and Peripheral H ealth care services (PHCs).
Social Protection 189.
A n am ount o f Le44.5 billion is allocated from the recu rrent bu dget to the Social Protection Sector, including Le7.2 billion for Social Protection, Le8.7 billion leones for Pilgrim age under the M inistry o f Social W elfare G ender and C h ild ren ’s Affaire; N aC SA Le 2.1 billion; M inistry o f Labou r and Social Security; Le4.4 billion; M inistry o f You th A ffairs Le5.5 billion, o f w hich the N ational Y ou th C om m ission Le3.1 billion; M inistry o f Sports Le16.6 billion; and N ational You th Service Le2.4 billion.
A n am ount o f Le 2.2 billion is allocated for devolved functions relating to you th and sports services at the local level.

G rants for devolved social w elfare services w ill am ou nt to Le1.5 billion.

35 190.

From the dom estic capital budget, the M inistry o f Y ou th w ill also receive the sum o f Le56.4 billion for the im plem entation o f variou s you th developm ent and em pow erm ent program m es.
These include Le30.0 billion for You th Entrepreneurship; L e 2 1 billion for the establishm ent o f Y ou th Farm s; Le3.4 billion for Y ou th in Fisheries; Le2.0 billion for the Car W ash Project and Le1.0 for Y ou th E m pow erm ent Fund and Le400 m illion for the establishm ent o f the N ational A pprenticeship Schem e. 191.

From the dom estic capital budget, Le14.7 billion is allocated to NaCSA.
O f this am oun t Le 5.0 billion is for the construction and rehabilitation o f com m unity facilities and an initial am ount o f Le5.0 billion for Econom ic E m pow erm ent for Persons Living w ith Disability.

C oun terpart contributions to donor-funded projects, im plem ented by NaCSA, w ill am ount to Le4.7 billion.

192.

The W orld Bank, IDB, KFW , GIZ and U N H C R w ill disburse Le89.9 billion for the im plem entation o f variou s social protection program m es im plem ented by NaCSA.
Cluster Two: Diversifying the Economy Agriculture 193.

Mr. Speaker, Hon.

M em ber, to support the im plem entation o f the N ational A gricu ltu ral Tran sform ation program m e, G overnm ent is allocating Le348.8 billion to the agriculture sector, accou nting for 6 percent o f the total prim ary expenditure.
O f this, Le38.9 billion is from the recurrent budget to su pport the rehabilitation o f existing plantations, rehabilitation o f Inland V alley Swam ps, procu rem ent o f livestock and anim al vaccines, fertilizers and seedlings, as w ell as support the Fertizer R egulatory A gen cy and the Seed C ertification Agency.

194.

Transfers for devolved functions in the agriculture and fisheries sectors will am oun t to Le8.3 billion.

195.
195.

Mr. Speaker, H onourable M em bers, G overnm ent is allocating Le109.4 billion from the dom estic capital budget to the M inistry o f A griculture and Forestry.

O f this am oun t Le61.6 billion is allocated for the establishm ent o f the C hiefdom You th and M ilitary Farm s and Le10.0 billion to su pport the N ational R eafforestation program m e. Also, Le2.0 billion is provided for the rehabilitation o f the M usaia Livestock Station.
A n am ount o f Le500 m illion is allocated to finance the feasibility study for the establishm ent o f D istrict Farm Service Centres.

196.

The W orld Bank, IFAD, AfD B, IDB and DFID w ill also disburse the sum o f Le190.9 billion for the im plem entation o f variou s projects in the agriculture sector.

36 Fisheries 197.
36 Fisheries 197.

A s part o f G overn m en t’s efforts to im prove the productivity o f the fisheries sector, the M inistry o f Fisheries and M arine R esou rces is allocated Le12.6 billion from the recurrent budget.

O f this am ount, Le7.6 billion is for the procurem ent and distribution o f appropriate fishing gear and training on sustainable fishing practices.

A n am ou nt o f Le3.1 billion is allocated to establish and operationalise a Fish Testing Laboratory.

198.
198.

G overnm ent is also allocating Le7.5 billion from the dom estic capital budget to support the fish stock assessm ent, rehabilitation and construction o f fisheries infrastructure, support to w om en in fisheries, m onitoring and surveillance and im proving qu ality and safety standards for fish exports.

Tourism 199.
Tourism 199.

G overnm ent is allocating Le7.7 billion from the recu rrent budget including Le4.2 billion to the N ational Tou rist Board, for the im plem entation o f the Tourism M arketing Strategy and Le2.2 billion to the M onu m ents and Relics C om m ission for the rehabilitation o f variou s historic buildings and sites nationw ide.

The N ational and R ailw ay M useum s w ill receive Le1.2 billion.

200.
In addition, an am oun t o f Le17.1 billion is allocated from the dom estic capital bu dget to the tourism sector, o f w hich L e 1 .9 billion is to the M inistry ofT ou rism for the developm en t o f five ecotourism sites; Le8.2 billion to the N ational Tou rist Board for several tourism projects, including the Peninsu la B eaches Sanitation and Security Project and Le7.0 billion to the M onum ents and Relics C om m ission for the restoration o f Old Fourah B ay College, construction o f a M useum and H eritage Centre in Bonthe and restoration o f proclaim ed and protected sites.
201.

D evelopm ent partners including the U N D P and the U SA w ill disburse Le33.0 billion for im plem entation o f variou s projects in the tourism sector.

G overn m en t’s counterpart contribution to these projects in the tourism sector w ill am ount to Le5.0 billion.

Trade, Manufacturing and Services Sectors 202.


A s part o f the efforts to prom ote trade and investm ents for jo b creation especially for the youths, G overnm ent is allocating from the recu rrent bu dget an am oun t o f Le14.8 billion to the M inistry o f Trade and Indu stry to support various agencies engaged in im proving the business environm ent and the prom otion o f investm ent and export activities.

203.
203.

In addition, Le22.0 billion is allocated from the dom estic capital budget as support to M icro, Sm all and M edium Scale Enterprises.

37 Cluster 3: Managing Natural Resources 204.

Mr. Speaker, H onourable M em bers, to support the efficient m anagem ent o f our natural resources, G overnm ent is allocating Le3.4 billion to the M inistry o f M ines and M ineral R esources including Le1.8 billion to the N ational M inerals Agency.
In addition, Le6.0 billion is allocated to the Petroleum D irectorate for the effective governance and m anagem ent o f upstream petroleum resources.

The Petroleum R egulatory A gen cy is allocated Le10.2 billion.

A n am ount o f Le3.7 billion is allocated to the M inistry o f Lands, H ou sing and the E n vironm ent for the im plem entation o f the developm ent o f the legal fram ew ork for the Land C om m ission and C u stom ary Land R ights Bill.
Cluster Four: Governance and Accountability for Results 205.
Mr. Speaker, H onourable M em bers, to prom ote good governance and efficient m anagem ent o f the econom y, G overnm ent is allocating from the recu rrent budget, Le7.2 billion to the A u d it Service Sierra Leone; Le8.0 billion to the A n ti C orruption Com m ission; Le17.0 billion to the Judiciary; Le18.8 billion to the Law O fficer’s Departm ent; Le93.0 billion to the M inistry o f Foreign A ffairs and International Cooperation; Le83.0 billion to the M inistry o f Finance; Le43.5 billion to the M inistry o f Plan nin g and Econom ic D evelopm ent; Statistics Sierra Leone, Le5.6 billion; Le193.9 billion to the N ational Revenue Authority; Le35.0 billion to the A ccou n tan t-G en eral’s Departm ent; Le1.1 billion to the N ational C om m ission for D em ocracy; Le2.0 billion to the N ational C ouncil for Civic Education and D evelopm ent (NACCED): Le70.8 billion to the M inistry o f Defence; Le60.1 billion to the Sierra Leone Police; Le43.8 billion to the Sierra Leone C orrectional Services; and Le3.4 billion to the N ational Fire Authority.
The bu dgetary allocation to the House o f Parliam ent is increased to Le37.2 billion in 2020.

206.
In addition, G overnm ent is allocating from the dom estic capital budget, Le89.6 billion to su pport variou s governance related activities inclu ding Le19.6 billion for the rehabilitation o f foreign m issions; Le6.0 billion for the integrated Civil Registration and Vital Statistics and ID M anagem ent system s; Le500 m illion for the establishm ent o f the W ages and C om pensation Com m ission; Le10.0 billion to the N ational Council For Civic Education and D evelopm ent (NACCED) for strengthening com m unity civic engagem ents; Le7.0 billion for the new construction and rehabilitation o f police stations; Le12.0 billion as support to the M ilitary for Food Production; Le3.0 billion for construction o f m ilitary barracks; Le5.0 billion for A u d it Service Sierra Leone headquarters; Le5.0 billion for the constru ction o f A nti Corruption Building; Le2.0 billion for the rehabilitation o f Correctional C entres and facilities; and Le700 m illion for the rehabilitation o f Statistics Sierra Leone H eadquarters.
207.

In addition, the W orld B ank and FAO are disbursing Le2.9 billion to Statistics Sierra Leone to support the conduct o f various surveys.

G overn m en t’s counterpart contribution to these surveys w ill am ount to Le1.8 billion.

38 Cluster Five: Infrastructure Development and Economic Competitiveness 208.

Mr. Speaker, H onourable M em bers, the developm ent o f infrastructure rem ains critical in im proving the business environm ent to attract investm ent for jo b creation.
Improving Electricity Supply 209.

Given the critical im portance o f the energy sector to sustainable grow th and jo b creation, G overnm ent is allocating an am ount o f Le127.5 billion from the recurrent bu dget to the M inistry o f Energy.

O f this am ount, energy subsidies including fuel for Indepen dent Pow er Providers, is Le124.1 billion.

210.
210.

G overnm ent is also allocating from the dom estic capital budget an am ount o f Le42.1 billion to the energy sector including Le20.0 billion for electrification o f six district capital towns; Le5.0 billion for rehabilitation o f E lectricity House, Le5.0 billion for rehabilitation o f EGTC therm al plants, and Le2.0 billion for the rehabilitation o f the D odo H ydro dam.

211.
211.

The Abu Dhabi Fund, African D evelopm ent Bank, W orld Bank, DFID, and Indian Exim B ank will disburse Le323.4 billion tow ards the im plem entation o f variou s projects in the energy sector.

G overnm ent’s counterpart contribution towards the implem entation o f these projects w ill am ount to Le10.2 billion.

Improving Water Supply 212.


A n am oun t o f Le11.3 billion is allocated from the recurrent bu dget to the M inistry o f W ater Resources, o f which, Le5.2 billion as grants to SALW ACO and Le2.1 billion to the W ater Resource M anagem ent Agency.

213.
213.

A n am ount o f Le21.0 billion is allocated from the dom estic capital budget to SALW ACO to finance the com pletion o f w ater supply projects in all districts, construction o f solar-pow ered bore holes in 13 districts, construction o f w ater supply system s in B onthe M unicipality and construction o f industrial bore holes in urban areas; the procu rem ent and installation o f m etres, billing software and laboratory equipm ent.
A n am oun t o f Le6.0 billion is allocated to the N ational W ater Resource M anagem ent A gen cy for the construction o f 10 hydrological m onitoring netw orks and 25 ground w ater m onitoring stations.

In addition, Le3.0 billion is allocated to G U M A V alley W ater C om pan y for the em ergency w ater supply project in the W estern Area.

214.
214.

D evelopm ent partners, including the African D evelopm ent Bank, W orld Bank, DFID, Kuw aiti Fund, Saudi Fund w ill disburse Le253.0 billion for the im plem entation ofvarious water projects by GUMA and SALW ACO .

Governm ent’s counterpart contribution to these projects w ill am ount to Le34.7 billion.

39 Improving the Road Network 215.


G overnm ent is allocating from the dom estic developm ent bu dget the sum o f Le217.0 billion to the Sierra Leone Roads A u th ority (SLRA) to su pport Labour Based Public W orks program m es for youths at the district level; spot im provem ent o f highways; com pletion o f tow nship roads; construction o f the B o-M attru Road, Bandajum a- Pu jehu n -G bondapi Road, the Hill-Side Bye Pass Road and for feasibility studies for the construction o f m ajor highways.

216.
216.

D evelopm ent partners including EU, AfD B, OFID, IDB, Kuw aiti Fund, Saudi Fund, and Peoples Republic o f China are disbursing Le236.0 billion for the com pletion ofM agbele, M abang and Kpangbam a bridges and Bo-Bandajum a, Pendem bu-Kailahun, Lum ley-Tokeh, Lim kokw ing-R egent Roads.

G overnm ent cou nterpart contribution to these roads and bridge projects w ill am ou nt to Le45.0 billion.

Cluster Six: Addressing Women, Children and Disability Issues 217.
Mr. Speaker, H onourable M em bers, to address som e the challenges facing w om en and children, G overnm ent is allocating from the recurrent budget, Le3.3 billion for G ender and C h ild ren ’s program m es u nder the M inistry o f Social W elfare, Gender and C h ildren ’s A ffairs and Le1.3 billion as su pport to the N ational C h ild ren ’s Com m ission.

In addition, an am ount o f Le1.0 billion is allocated from the dom estic capital budget to support w o m en ’s em pow erm ent.
Transfers for devolved fucntions for G ender and C h ild ren ’s A ffairs w ill am ount to Le1.8 billion.

Cluster Seven: Addressing Vulnerabilities and Building Resilience (Environment, Climate Change and Disaster Management) 218.
Mr. Speaker, H onourable M em bers, as part o f G overn m en t’s efforts to address environ m en t and clim ate change challenges, G overnm ent is allocating from the recurren t budget, Le28.5 billion to the Sierra Leone E nvironm ental Protection Agency, Le1.9 billion to the N uclear Safety and Radiation Protection A gen cy and Le1.4 billion to the Sierra Leone M eteorological Agency.
In addition, G overnm ent is allocating from the dom estic capital budget Le2.2 billion to the N ational Protected A rea Authority.

Budget Deficit and Financing 219.

The overall deficit, including grants is projected at Le1.1 trillion (2.6 percent o f GDP).

E xcluding grants, the deficit is projected at Le2.9 trillion (6.6 percent o f GDP).

The prim ary deficit is projected at Le156.7 billion (0.4 percent o f GDP).

The deficit will be financed by both dom estic and foreign sources.
Foreign financing in the form o f project loans and grants is projected at Le1.08 trillion.

D om estic financing w ill am ount to Le873.9 billion.

40 VII.

Risks to the Implementation o f the Budget 220.

Mr. Speaker, H onourable M em bers, the potential risks that could derail the im plem entation o f the G overn m en t’s B u dget have been identified and discussed in the G overn m en t’s Fiscal Strategy Statem ent for 2020 to 2022.
For the 2020 Budget, the follow ing risks have been identified: (i) C ontinued closure o f the iron ore m ines and its im plications for growth, exports, dom estic revenue and foreign exchange earnings; (ii) Increase in the price o f fuel in the international m arket and its im plications for G overnm ent expenditure, foreign exchange reserves and stability o f the exchange rate; (iii) Rising inflation and dom estic interest rates and its im plications for G overnm ent expenditure on the w age bill, goods and services and interest paym ents on dom estic debt; (iv) Increase in subsidies to ED SA and other SOEs; (v) U nexpected shortfall in dom estic revenue collection; (vi) D elays in the disbursem ent o f budget support by developm ent partners; (vii) W eak im plem entation o f structural reform s and non-adherence to the IM F program m e targets, w hich could derail the program m e w ith the Fund; and (viii) The occurrence o f natural disasters and associated expenditure, w hich could derail the im plem entation o f the budget.
VIII.

Conclusion 221.

Mr. Speaker, H onourable M em bers, the 2020 B u dget focuses on consolidating hum an capital developm ent and stim ulating the econom y to create jo b opportunities, especially for the youths.

The policy m easures I have announced are deliberate, specific and targeted.

T h ey w ill have im m ense im pact on incom es, hum an developm ent and social security o f our people.

Thus, the them e o f this B u dget is ‘Fiscal Consolidation for Human Capital Development and Job Creation’.
222.

The econom ic policies articulated in this budget build on the progress m ade in fiscal consolidation efforts o f the previous year.

These policies, com bined w ith the sectoral policies and program m es, w ill facilitate the scaling up o f investm ents in hum an capital developm ent, infrastructure and productive sectors supported by science, technology and innovation.

The ultim ate goal is to create jo b s for our youth.
This B u dget seeks to enable the youth, w ho are our m ost valuable resource to take their rightful place in society by equipping them w ith the right skills and em pow ering them 41 w ith financial resources to m ake their dream s com e true.

The tim e for using and abusing the you th as agents o f crim e and other social ills is over.

W e must, and we will, increase their participation in the developm ent process o f this country.

223.
223.

Mr. Speaker, H onourable M em bers, as a ‘Talk and D o ’ Governm ent, we will w ork tow ards the delivery o f these com m itm ents.

For this to happen , core interventions have been shifted from the recurrent to the capital bu dget to ensure effective im plem entation o f projects as w ell as m onitoring and evalu ation o f results.

It is also clear that ach ieving all these objectives w ill require investm ents from a range o f different resources.
To this end, a C onsultative Group M eeting for the M edium Term N ational D evelopm ent Plan is planned next yea r to m obilise resources for its im plem entation.

T his w ill include confirm ing already com m itted internal and external resources; raising funds through the restructuring o f existing public debt; and m obilising additional resources through private sector and other innovative financing.

224.
224.

Let me at this point thank His Excellency, the President Dr. Ju liu s M aada Bio for his vision set out in the Presidential Address to this Parliam ent; continuous guidance provided directly to the political leadership, and throu gh the regular econom ic m anagem ent briefing.

225.

To the Vice President, Dr. M oham ed Ju ldeh Jalloh, w ho launched the B udget H earing M eetings, and m aintains regular contact w ith the M inistry o f Finance on variou s issues, I say thank you very much.

226.
226.

The C h ief M inister, other Cabinet colleagues, you have been very helpful.

You have dem onstrated u nderstanding in the m idst o f scarce resources.

Y ou have been frank and sincere in all our bilateral engagem ents and have em braced the national agen da even at the expense o f you r sector priorities.

From the bottom o f m y heart, I th an k you and prom ise to allocate additional resources as the situation im proves.

227.
227.

Mr. Speaker, H onourable M em bers, I w ish to express m y sincere gratitude to the D eputy M inister o f Finance, the Financial Secretary, the Principal D eputy Financial Secretary, the C h ief Econom ist, all D irectors and s ta ff in the M inistry o f Finance for their support in the design and im plem entation o f policies, inclu ding this B u dget Policy Statem ent.
W e also appreciate the M inister o f Planning and E conom ic D evelopm ent, the D evelopm ent Secretary and s ta ff o f M inistry o f Planning and E conom ic D evelopm ent for their contribu tion to the preparation o f the capital budget.

42 228.

The Governor, D eputy Governor, m anagem ent and sta ff o f the B ank o f Sierra Leone are appreciated for their cooperation in further enhancing the coordination o f fiscal and m onetary policies for the betterm ent o f all Sierra Leoneans.
The Com m issioner General, m anagem ent and sta ff o f the N ational Revenue A u th ority deserve special com m endation for their tireless efforts in the m obilisation o f dom estic revenue and preparation o f the budget.

229.
229.

Mr. Speaker, H onourable M em bers, I w ould like to reiterate m y appreciation for the effective bipartisan role played by this Noble House o f Parliam ent u nder the leadership o f the H onourable Speaker, in passing legislations that are contributing to the restoration o f fiscal discipline and im proving econom ic governance.
In addition, we also w ish to acknow ledge the invaluable role played by the A ttorn ey G eneral and M inister o f Justice, the Solicitor G eneral and sta ff in the Law Officers D epartm ent for their facilitation and finalisation o f the variou s bills and statutory instrum ents.

230.

I w ould also like to recognise our developm ent partners, w ho in addition to providing direct budget support.
T h at have contributed im m ensely in providing project support as w ell as technical assistance and advisory services.

231.

M y appreciation also goes to the D istrict B u dget O versight Com m ittees, N on ­ State Actors, and m em bers o f the electronic and print m edia w ho participated in our open Bu dget Policy D iscussions and regularly report on activities o f M inistry o f Finance.
A s usual, the G overnm ent Printer and sta ff rose to the occasion and produced the printed B u dget Statem ent and estim ates on time.

232.

On this note, Mr. Speaker, H onourable M em bers, let me reiterate that this B u dget is a continuation o f a series o f B u dget Policy Statem ents that w ill sustain econom ic growth, prom ote hum an capital developm ent and increase private sector participation to create jo b s and lift our people out o f poverty.

233.
233.

Mr. Speaker, H onourable M em bers, this is a Bread and Butter Budget.

I, therefore, com m end it to this House.

234.

I thank you A L L and God B less Us All.
43 BUDGET PROFILE 44 GOVERNMENT OF SIERRA LEONE GOVERNMENT BUDGET and STATEMENT OF ECONOMIC AND FINANCIAL POLICIES For the Financial Year, 2020 Theme: “Fiscal Consolidation fo r Human Capital Development and Job Creation” DELIVERED BY JACOB JUSU SAFFA Minister o f Finance in the Chamber of Parliament T o w e r Hi l l , Fr e e t o w n o n Friday, 8th Novem ber, 2019 at 10:00 a.m. A I- In millions o f Leones (Le’m) PARTICULARS FY2018 Estimate Q1-4 Jan-Dec FY2018 % of GPD FY2019 Program Q1-4 Jan-Dec FY2019 % o f GPD FY2020 Budget Q1-4 Jan-Dec FY2020 % o f GPD FY2021 Indicative Q1-4 Jan-Dec FY2021 % o f GPD FY2022 Indicative Q1-4 Jan-Dec FY2022 % o f GPD GOVERNMENT OF SIERRA LEONE ANNEX 1-BUDGET PROFILE FOR FY2018-2022 Total Revenue and Grants 5,108,751 15.8% 6,658,628 17.7% 8,235,596 18.9% 8,943,424 17.7% 10,481,474 18.2% Domestic Revenue 4,428,458 13.7% 5,378,990 14.3% 6,470,436 14.9% 7,748,109 15.3% 9,180,374 15.9% Income Tax Revenue Corporate Tax Personal Income Tax - incl.
Govt PAYE Other Taxes Goods and Services Tax Import GST Domestic GST Customs and Excise Department Import Duties Excise Duties on Petroleum Products Other Excise Duties Mines Department Royalty on Rutile Royalty on Bauxite Royalties on Diamond and Gold Royalty on Iron Ore Licences(Including Petroleum Revenue) Other Departments Royalties etc.
on Fisheries Parastatals Other Revenues (Including TSA Agencies and Timber) Road User Charges & Vehicle Licences Grants Programme o/w Debt Relief Assistance o/w HIPC - $’ m o/w Global Fund Salary Support o/w External Donors Budgetary Support /4 o/w UK DFID - $’ m o/w EU - $’ m o/w World Bank - $’ m o/w African Dev.
Bank - $’ m Elections Basket Fund Support to the 2018 General Elections Projects Project - Other Projects $1.63 5 5,437 225,485 $0.00 $27.50 $0.00 $0.00 - - - 386,000 4.9% 1.4% 3 .6 % 0.

0% 2.7% 1.7% 1 .

0% 3.1% 2.

0% 1.1% 0.

0% 0.7% 0.

2% 0.

1 % 0.

2% 0.

0% 0.

2% 2.0% 0.

3% 0.

0% 1.7% 0.2% 2.1% 0.9% 0.

0% 0.


2% 0.7% 0.
0% 1.2% 1,930,198 384,223 1,508,207 37,768 984,000 384,000 600,000 1,281,000 710,000 546,000 25,000 270,080 109,460 14,498 45,159 8,518 69,909 788,227 96,005 60,683 631,539 125,485 1,279,638 774,158 6,575 $0.76 0 767,583 $0.00 $23.52 $39.67 $20.70 0 0 - $0.00 0 1,030,000 $0.00 $24.00 $60.00 $14.00 0 0 - $0.00 0 640,008 $0.00 $24.00 $30.00 $5.70 0 0 - $0.00 0 738,100 $0.00 $24.00 $30.00 $13.50 0 0 - 563,000 5.6% 1.5% 4.2% 0.0% 3.4% 1.3% 2.1% 3.6% 2.2% 1.3% 0.1% 0.7% 0.2% 0.1% 0.1%
 0.1% 0.2% 2.3% 0.6% 0.1% 1.6% 0.3% 2.3% 1.3% 0.0% 0.0% 1.3% 0.0% 1.0% GOVERNMENT OF SIERRA LEONE ANNEX 1-BUDGET PROFILE FOR FY2018-2022 In millions o f Leones (Le’m) PARTICULARS FY2018 Estimate Q1-4 Jan-Dec FY2018 % of GPD FY2019 Program Q1-4 Jan-Dec FY2019 % o f GPD FY2020 Budget Q1-4 Jan-Dec FY2020 % o f GPD FY2021 Indicative Q1-4 Jan-Dec FY2021 % o f GPD FY2022 Indicative Q1-4 Jan-Dec FY2022 % o f GPD Total Expenditure and Lending minus Repayments 6,830,697 21.1% 7,836,285 20.9% 9,349,140 21.5% 10,346,940
 20.4% 11,670,308 20.2% Recurrent Expenditure W ages & Salaries o/w: Pensions, Gratuities and Other Allowances o/w: Contributions to Social Security Non-Salary, Non-Interest Recurrent Expenditure Goods and Services o/w Social and Economic o/w Free Education Programme (Senior Secondary) General and Others Statistics - Sierra Leone Defence Expenditure Police Correctional Services Subsidies and Transfers i i Transfers to Local Councils Grants fo r Admin.
Expenses Grants f o r Devolved Functions o/w Free Education Programme (Pre/Primary & JSS) Grants toTertiary Educational Institutions Transfer to Road Maintenance Fund Transfers to Other Agencies Including (TSA Agencies) National Revenue Authority Transfer to ECOWAS Fund Energy Subsidies(Incl.
Fuel) Energy Subsidies f o r IPPs Other SOEs Loans and Structural Interventions Elections and Democratisation Domestic contribution National Electoral Commission Total interest payments Domestic Interest Foreign Interest .6 % 0 .2 % 5.2% 3.3% 1.4% 0.4% 1.2% 0.
0% 0.

2% 0 .3 % 0.

1 % 2.2% 0.3% 0.

1 % 0.

2% 0.2% 0.7% 0.3% 0.4% 0.3% 0.0% 0.1% 0.

1 % 0.

0% 0.1% 0.

1 % 0.

1 % 2.8% 2 .5 % 0.
1.1%
Capital Expenditure and Net Lending 2,083,137 6.4% 2,042,028 5.4% 2,873,656 6.6% 3,177,368 6.3% 3,719,000 6.5% Capital Expenditure Foreign Loans and Grants Loans Grants Domestic Lending minus Repayment 2,083,137 1,409,000 1,023,000 386,000 674,137 - 6.4% 4.3% 3.
In millions o f Leones (Le’m) PARTICULARS OVERALL DEFICIT/SURPLUS (-) (+) (on commitment basis) including grants excluding grants domestic primary balance Contingency Expenditure: Contingency Fund Special Presidential Warrants Unallocated Expenditures GOVERNMENT OF SIERRA LEONE ANNEX 1-BUDGET PROFILE FOR FY2018-2022 FY2018 Estimate Q l-4 Jan-Dec FY2018 % of GPD FY2019 Program Q1-4 Jan-Dec FY2019 % o f GPD FY2020 Budget Q1-4 Jan-Dec FY2020 % o f GPD FY2021 Indicative Q1-4 Jan-Dec FY2021 % o f GPD FY2022 Indicative Q1-4 Jan-Dec FY2022 % o f GPD (1,721,946) (2,402,239) (176,207) (89,264) (10,317) (7,345) (71,602) -5 .3 % -7 .4 % -0.5% -0.3% 0.
0% 0.

0% -0 .2 % (1,177,657) (2,457,295) (238,392) (51,169) 0 (351) (50,818) -3.1% -6.5% -0.6% -0.1% 0.
0% 0.0% -0.1% (1,113,544) (2,878,704) 156,199 (3,760) (1,880) (940) (940) -2.6% -6.6% 0.4% 0.0% 0.0% 0.0% 0.0% (1,403,516) (2,598,831) 469,064 (90,012) (50,000) (17,512) (22,500) -2.8% -5.1% 0.9% -0.2% -0.1% 0.0% 0.0% (1,188,834) (2,489,934) 820,066 (90,000) (45,000) (22,500) (22,500) -2.1% -4.3% 1.4% -0.2% -0.1% 0.0% 0.0% Change in Arrears: (97,205) -0.3% (51,826) -0.1% (266,000) -0.6% (260,000) -0.5% (260,000) -0.5% Domestic Suppliers (Incl.

outstanding commitments of previous year) Govt.


Arrears to Parastatals Wages Arrears 3/ i i i O VERALL DEFICIT (CASH BASIS) Including grants (67,053) - (30,152) -0 .2 % 0.
0% -0 .1 % (51,059) (464) (303) -0.1% 0.0% 0.0% (266,000) - - -0.6% 0.0% 0.0% (260,000) - - -0.5% 0.0% 0.0% (260,000) - - -0.5% 0.0% 0.0% (1,908,415) -5.9% (1,280,652) -3.4% (1,383,304) -3.2% (1,753,528) -3.5% (1,538,834) -2.7% TOTAL FINANCING 1,908,415 5.9% 1,280,652 3.4% 1,383,304 3.2% 1,753,528 3.9% 1,538,834 3.1% Foreign Borrowing (Loans) Project Programme External Debt Amortisation Domestic Financing 2/ Bank Central Bank IMF SDR On-lending CSE and Other Roads Contractors Bonds Principal Repayment of Audited Arrears Ways and Means Advances Securities Budget Support Bridge Financing Commercial Banks Non-Bank Privatisation and Other Receipts Float o/w: Cheques Payable Change in Outstanding Commitments Movements in Cheques on Hold at BSL and 660,216 1,023,000 1,023,000 0 (362, 784) 989,017 983,802 553,074 182,587 0 0 (44, 788) 168,256 247,019 430,729 5,215 0 259,182 (14,943) 0 2.0% 3.
2% 3.

2% 0.

0% -1 .1 % 3.1% 3.0% 1.7% 0.

6% 0.

0% 0.

0% -0 .1 % 0.

5% 0.

8% 1.3% 0.0% 0.

0% 0.
8% 221,570 630,442 630,442 0 (408,872) 1,000,081 875,008 210,259 123,259 - - 138,755 195,263 (247,018) 664,750 125,072 0 59,001 130,903 0 0.6% 1.7% 1.7% 0.0% -1.1% 2.7% 2.3% 0.6% 0.3% 0.0% 0.0% 0.4% 0.5% -0.7% 1.8% 0.3% 0.0% 0.2% 0.3% 509,374 1,078,465 1,078,465 0 (569,091) 873,930 1,220,622 (103,618) (116,000) (212,000) (19,000) 47,550 195,832 - 1,324,241 (346,693) 0 0 - 0 1.2% 2.5% 2.5% 0.0% -1.3% 2.0% 2.8% -0.2% -0.3% -0.5% 0.0% 0.1% 0.4% 3.0% -0.8% 0.0% 0.0% 0.0% 0.0% 754,000 1,459,000 1,296,000 163,000 (705,000) 999,528 1,364,587 9,806 (239,000) (212,000) (25,000) 47,691 438,116 - 1,354,781 (365,059) 0 (0) 0 0 1.5% 2.9% 2.6% 0.3% -1.4% 2.4% 3.2% 0.5% -0.5% -0.4% 0.0% 0.1% 0.9% 0.0% 2.7% -0.7% 0.0% 0.0% 0.0% 852,000 1,688,000 1,496,000 192,000 (836,000) 686,835 1,230,304 (286,720) (420,000) (212,000) (30,000) 50,984 324,296 - 1,517,024 (543,470) 0 (0) 0 0 1.5% 2.9% 2.6% 0.3% -1.4% 1.6% 2.6% -0.1% -0.7% -0.4% -0.1% 0.1% 0.6% 0.0% 2.6% -0.9% 0.0% 0.0% 0.0% In millions o f Leones (Le’m) PARTICULARS AGD at end of period Adjustment for Issuance/Redemption of Loans and Advances Unaccounted Financing Gap Financing Gap (US$’m) Memorandum Items: Free Education Programme Energy Subsidies(Incl.
Fuel) Stock of Committed Obligations - (5,991) - (0.8) 200,1 75 46,238 891,240 GOVERNMENT OF SIERRA LEONE ANNEX 1-BUDGET PROFILE FOR FY2018-2022 FY2018 Estimate Q1-4 Jan-Dec FY2018 % of GPD FY2019 Program Q1-4 Jan-Dec FY2019 % o f GPD FY2020 Budget Q1-4 Jan-Dec FY2020 % o f GPD FY2021 Indicative Q1-4 Jan-Dec FY2021 % o f GPD FY2022 Indicative Q1-4 Jan-Dec FY2022 % o f GPD 280,116 (71,901) -0.2% 0.0% 0.
0% 0 0 0 0.0 0.0% 0.0% 0.0% - 0 0 0 0.0 0.0% 0.0% 0.0% 0 0 (0) 0 (0.0) 0 0 (0) 0 (0.0) 234,357 0.6% 18,430 0.0% 22,263 0.0% 23,790 144,637 0.4% 124,153 0.3% 179,237 0.4% 106,211 0.0% 0.0% 0.0% 0.0% 0.2% Public Debt Charges t a o/w External Debt Payments (incl.

HIPC Debt Relief) 1,269,080 457,579 3 .9 % 1.4% 1,535,922 518,591 4.1% 1.4% External Budgetary Support (excl.

HIPC Debt Relief; incl.
PBF) 280, 922 767,583 - - 1,794,129 689,608 1,030,000 - - 4.1% 1.6% 2,011,600 828,362 4.0% 1.6% 2,177,000 967,000 3.8% 1.7% 803,008 930,100 Nominal GDP Figure (excluding Iron Ore) 32,402,000 100.0% 37,574,000 100.0% 43,568,562 100.0% 50,642,000 100.0% 57,658,000 100.0% Poverty Related Expenditure 912,384 2.8% 2,482,000 2,053,096 2,482,000 2,482,000 Exchange Rate Le/US$ 7,555 9,461 10,510 10,720 10,935 1/ Domestic revenue less total expenditure and net lending, excluding interest payments and externally financed capital expenditure 2/ Fiscal Targets 3/ Wages arrears - this is usual provision made to reduce stock of wage arrears.
4/ External Budgetary Support -FY2020 Baseline provides for only US$60 million from the World Bank whilst Optimistic provides for the full US$100 million In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) GRAND TOTAL Cluster One: Human Capital Development 301 Ministry o f Basic and Secondary Education (MoBSE) Free Quality School Education Programme o/w Teaching and Learning Materials School Fee Subsidies School Feeding Programme Examination Fees for WASSCE Rehabilitation/Refurbishment of Schools Enhancement of Capacity of MOBSE for Monitoring and Ongoing Nationwide Ongoing Nationwide Ongoing Nationwide Ongoing Nationwide Ongoing Nationwide New Nationwide Supervision of Schools Ongoing Nationwide Establishment/Strengthening of Laboratories in Secondary Schools Ongoing Nationwide A Providing Disability Friendly Environment in Schools Ongoing Nationwide Funding Source GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL Type Grant/Budget Grant/Budget Grant/Budget Grant/Budget Budget Budget Budget Budget Budget Sierra Leone Secondary Education Improvement Project (Leh Wi Lan) Focused Resources on Equity and Excellence (FREE) Education Sector Project Ongoing Nationwide DFID Grant/Budget 17,500 New New Nationwide IDA/GoSL Grant/Budget 50,000 Nationwide
 BADEA/OFID Loan/Budget 23,750 /SGGOSL Curriculum Review and Development for Schools New Nationwide GoSL Budget Institutional Support to WAEC for addressing Examination Malpratces Institutional Support to Teaching Service Commission (TSC) Support to Continuous Professional Development in Schools Rehabilitation/Expansion of Boarding Home Facilities New New New New Nationwide Nationwide Nationwide Nationwide GoSL GoSL GoSL GoSL Budget Budget Budget Budget 1,813,625 1,060,031 1,851,307 1,326,060 2,059,000
 1,660,000 650,730 373,511 957,520 414,218 1,251,019 440,222 91,250 292,700 299,381 301,085 394,550 312,730 - 269,200 - 278,135 - - - - 267,700 15,000 154,350 70,000 28,350 3,000 16,500 154,350 70,000 28,350 4,500 7,000 3,000 1,500 - 4,500 4,785 1,100 2,200 550 550 2,200 51,000 200,000 143,550 10,000 169,785 70,000 28,350 4,950 7,700 3,300 1,650 - 4,950 4,785 1,210 2,420 605 605 2,420 5,831 150,000 143,550 7,000 2,000 1,000 3,000 3,000 1,000 2,000 500 500 2,000 300 Ministry o f Tertiary and Higher Education (MoTHE) 220,620 25,900 433,970 34,917 474,450 39,270 Rehabilitation of Fourah Bay College Ongoing Western Area BADEA/Saudi Loan/Budget 20,000 5,000 8,000 Construction of Administrative, Teaching and Residential New Western Area FEMAB/IPAM 30,000 5,000 5,500 60,200 Fund/GOSL Buildings for IPAM /GOSL Curriculum Review and Development for Technical New Nationwide GoSL Budget and Higher Education Provision of Modern Teaching Equipment for University New Nationwide GoSL Budget and Colleges 1,000 500 1,100 550 8,800 6,050 1,210 605 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Rehabilitation and Refurbishment of Teacher Training Colleges New Funding Source GoSL Type Budget Education Sector Project (Bunumbu and Milton Margai) Ongoing Bunumba BADEA/GoSL Loan/Budget 38,750 Rehabilitation and
 Refurbishment of Government New Nationwide GoSl Budget Technical Institutues (GTIs) /Freetown FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic 1,000 3,000 1,000 143,550 1,100 4,785 1,100 2,200 1,100 105,700 100,000 1,210 4,785 1,210 2,420 1,210 Construction of University of Science and Technology (UST) in Kono New Kono EBID/GOSL Loan/Budget 80,700 2,000 143,550 Curriculum Review and Development for Technical New Nationwide GoSL Budget 1,000 and Higher
 Education Construction of School of Excellence in ICT in Bonthe New Bonthe Planet PPP/Budget 47,850 3,000 143,550 3,300 143,550 3,630 Core/GoSL Skills Development Project Ongoing Nationwide IDA/GOSL Grant/ Budget 3,320 3,000 3,320 5,742 65,000 7,656 Feasibility Study for the Construction of 6 Teacher v i Training Colleges New Nationwide Feasibility Study for the Construction of the University of the East New East GoSL GoSL Budget Budget 200 200 220 220 242 242 304 Ministry o f Health and Sanitation (MoHS) 240,181 37,200 132,249 65,644 274,199 73,213 TB Control Project Ongoing Nationwide Global Loan/GoSL 27,790 3,000 15,300 3,300 30,569 3,630 Malaria Control Project Ongoing Nationwide Global Grant/ Budget 64,420 5,000 75,780 5,500 70,862 6,050 Fund/GoSL Resilient and Sustainable Systems for Health Ongoing Nationwide IDA/GoSL Grant/ Budget 25,000 Regional Disease Surveillance System Enhancement Project Ongoing Nationwide IDA/GoSL Grant/ Budget 47,790 Health System Strengthening Support Project Ongoing Nationwide IDA/GoSL Grant/ Budget 4,983 Protecting Public Health Ongoing Nationwide CDC Grant/ Budget 15,000 Save the Mother to Child Initiative (IDB) Ongoing Nationwide IDB/GoSL Grant/ Budget 24,428 Strengthening Three Tertiary Hospitals in Freetown Ongoing Nationwide Kuwait Loan/GoSL 12,500 Fund/GoSL Primary Health Care Support Project Ongoing Nationwide BADEA/GoSL Loan 15,770 Construction of Cancer and Diagnostic Medical Center Ongoing Western Urban GoSL Budget
 Refurbishment and Equipment of District Hospitals Establishment of National Public Health Agency Ongoing Nationwide Providing Disability Friendly Environment in Health Facilities Ongoing Nationwide Adolescent Sexual Reproductive Health Programme Onging Nationwide GoSL GoSL GoSL GoSL Construction of National Warehouse at Kerry Town New Western Area Global Fund Budget Budget Budget Budget 2,500 Fund/GoSl /GOSL 500 500 5,000 1,000 5,000 2,000 2,600 7,000 2,000 100 1,000 1,000 1,000 15,750 2,721 14,428 5,770 550 550
 7,178 1,100 5,500 4,307 2,600 15,000 2,200 110 1,100 1,100 27,500 52,569 5,481 16,500 26,871 23,750 17,347 - - - - - 605 605 7,895 1,210 6,050 5,742 2,860 16,500 2,420 121 1,210 1,210 2,500 15,000 2,750 16,500 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE 605 605 605 - 605 605 MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Funding Source Support to National Emergency Medical Services New Nationwide GoSL (Ambulance Services) 314 National HIV/AIDS Secretariat Type Budget Support to HIV/AIDS Prevention and Treatment Ongoing Nationwide Global Fund Grant/GoSL /GOSL 500 500 500 1,320 1,320 550 550 550 - - 8,829 8,829 FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic 407 Ministry o f Labour and Social Security (MoLSS) - 500 - 550 Institutional Capacity Building Project Ongoing Nationwide GoSL Budget 500 550 308 National Commission for Social Action (NaCSA) 89,850 14,711 90,600 9,272 107,820 11,378 Sierra Leone Commmunity Driven Development Project (SLCDD) 2 Ongoing Nationwide IDB/GoSL Loan/Budget Sierra Leone Social Safety Net Project Ongoing Nationwide IDA/GoSL Pro Poor Growth for Peace Consolidation (GPC) Ongoing Nationwide KfW/GoSL Loan/Budget v i i Employment Promotion Programme III Relief and Resettlement Project Nationwide GIZ Nationwide UNHCR Rehabilitation / Construction of Community
 Facilities Nationwide Economic Empowerment of Persons Living with Disability New Nationwide GoSL GoSL 306 Ministry o f Lands, Country Planning and the Environment MoLCP&E) National Land Policy and Legal Reform Project Lands Administration Project Ongoing Nationwide Ongoing Nationwide GoSL GoSL Grant/ Budget Grant/ Budget 25,000 20,750 16,600 2,500 25,000 - - 1,500 3,000 211 - - 5,000 5,000 2,000 1,000 1,000 25,000 29,050 29,050 2,500 5,000 - - 1,500 4,500 232 - - 1,740 1,300 2,200 1,100 1,100 30,000
 24,900 19,920 3,000 30,000 - 1,650 6,000 255 - - 1,740 1,733 2,420 1,210 1,210 Cluster Two: Diversifying the Economy and Promoting Growth 401 Ministry o f Agriculture and Forestry (MoAF) 205,862 172,862 133,978 141,700 179,618 257,174 207,567 109,378 128,000 152,558 217,574 177,801 Linking Small Holder Farmers to Market Ongoing Nationwide IDB/GoSL Loan/Budget 29,050 212 25,000 233 45,000 Smallholder Commercialisation and Agribusiness Development Project (SCADeP) Ongoing Nationwide IDA/DFID/GoSL Loan/Budget 41,500 2,000 75,000 796 49,800 256 876 Palm Oil Production Project in Sierra Leone in the Framework of Capacity Building (POPSLCB) Ongoing Bonthe IDB/GoSL Loan/Budget 12,450 Establishment of Youth and Military Farms o/w Equipment Seedlings Fertilizer Extension Service Training of Community-Based Youth Support to Non-Youth Farming Groups for Production New New New New New New Nationwide Nationwide Nationwide Nationwide Nationwide Nationwide GoSL GoSL GoSL GoSL GoSL GoSL Budget Budget Budget Budget Budget Budget - - 5,000 61,645 15,886 6,800 35,417 3,542 15,000 5,000 5,000 14,940 12,259 - 113,625 25,296 13,600 70,833 3,896 - 15,000 - - 122,988 25,826 14,960 77,917 4,285 16,500 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Seedlings Fertilizer Other farm input Development of a National Master Plan for
 Irrigation Redevelopment of Musaia Livestock Station Tree Crops Development Project New New New New New New Nationwide Nationwide Nationwide Nationwide Koinadugu Nationwide Funding Source GoSL GoSL GoSL GoSL GoSL GoSL Type Budget Budget Budget Budget Budget Budget FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic Rural Finance and Community Improvement Project Phase 11 Ongoing Nationwide IFAD/GoSL Loan/Grant 12,000 /Budget Agriculture Value
 Chain Development Nationwide IFAD/GoSL Loan/Grant 25,820 3,000 2,500 5,455 30,984 7,273 v i i i Regional Rice Value Chain Development Sierra Leone Agribusiness and Rice Value Chain Support New New Nationwide IDB/GoSL Loan/Budget 50,520 Nationwide AfDB/GoSL 1,522 National Re-Afforestation Programme Ongoing Nationwide GoSL Budget Feasibility Study for the Establishment of District Farm Service Centres Ongoing Nationwide GoSL Budget /Budget 402 Ministry o f Fisheries and Marine Resources (MoFMR) Fish Stock Assessment Project Support to Artisanal Fishery Sector Rehabilitation/Construction of Fishery Infrastructure Support to Women in Fishery Ongoing Nationwide Ongoing Nationwide New New Nationwide Nationwide Strengthening Inland Fisheries and Aquaculture Production Ongoing Nationwide Enhancing Monitoring Control and Surveillance Systems Ongoing Nationwide Improving Quality and Safety Standards for Value Addition and Exports Support for Institutional Capacity Building 303 Ministry o f Toursim and Cultural Affairs (MoTCA) New New Nationwide Nationwide GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL Budget Budget Budget Budget Budget Budget Budget Budget Promotion and Reactivation o f Domestic Tourism in Coastal Areas ongoing Nationwide GoSL Budget Development of Tourism Facilities in Five (5) Prime Ecotourism Sites Institutional Support for Capacity Building 405 National Tourist Board (NTB) New New Nationwide Nationwide GoSL GoSL Development of Lumley Beach Project - Phase II
 Ongoing Western Area GoSL Peninsular Beaches Sanitation and Securiy Project Ongoing Western Area GoSL Budget Budget Budget Budget Sustainable Tourism Development and Promotion Project (STDPP) Ongoing Nationwide EIF/GoSL Grant/Budget - - 60,624 1,826 - - 5,225 1,522
400 5,000 500 - - 60,624 1,826 - - 5,225 1,522 5,000 550 8,250 1,100 1,100 1,100 1,100 1,100 1,100 1,100 550 2,090 550 1,100 440 - - In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Sustainable Eco-Tourism Development Project Ongoing Nationwide Construction of Five Tourist Information Offices (TIOs) New Nationwide Funding Source GoSL GoSL Type Budget Budget Adapting Climate Change Induced Coastal Risk Management ongoing Nationwide UNDP/GoSL Grant/ Budget 16,000 405 Monument and Relics Commission (MRC) 4,500 Development of the Physical Infrastructure of the Cultural Heritage Sector (2750) Restoration of selected Proclaimed/ Protected Sites Representation and Inscription of Cultural Sites to the Ongoing Nationwide Ongoing Nationwide GoSL GoSL Budget Budget UNESCO World Heritage List (500) Ongoing Nationwide GoSL Budget Comprehensive Preservation and Development of Bunce Island Ongoing Port Loko USAFCP/GoSL Grant 4,500 Construction of an Ethnographic Meseum and Heritage Resource Centre in Bonthe Restoration of Old FBC face II Ongoing Nationwide
 Ongoing Nationwide GoSL GoSL Budget Budget 1,000 1,200 1,000 7,000 1,000 1,000 500 2,000 1,000 1,500 5,200 3,500 3,500 - - 19,200 5,400 5,400 1,100 1,320 1,100 7,700 1,100 1,100 550 2,200 1,100 1,650 1,210 1,452 1,210 8,470 1,210 1,210 605 2,420 1,210 1,815 T X Cluster Three: Infrastructure and Economic Competitiveness 406 Ministry o f Energy (MoE) 820,900 347,295 739,307 531,060 512,406 793,185 292,400 42,153 332,287 38,618 321,640 Rural Electrification of 6 District Capital Towns (Transmission) Ongoing
 Nationwide Private/GoSL Budget 900 20,000 Rehabilitation and Extention of Bo-Kenema Distribution System Ongoing Bo, Kenema AfDB/DFID/GoSL Grant/Loan 6MW Solar Park Project in Newton Ongoing Western Area Abu Dhabi Loan/Budget 54,000 55,000 Rehabilitation of Dodo Dam Rehabilitation of Electricity House Rehabilitation of EGTC Plants Fund/GoSL New New New South GoSL Western Area GoSL Nationwide GoSL Budget Budget Budget West African Power Pool Project (WAPP) Ongoing Nationwide ECOWAS/GOSL Loan /Budget 35,000 Rural Electrification Project - CLSG (Serving Communities along the Transmission Line) Ongoin Nationwide AfDB/GoSl Grant/ Budget 35,000 Supply and Installation of 225KV Double Circuit Transmision Line from Bumbuna II to Waterloo Ongoing Nationwide India Exim/GoSL Loan/Budget Energy Sector Utility Reform Project (ESURP) ongoing Nationwide IDA Grant Feasibility Study for Establishment of Solar-Mini Grid, Njala New Nationwide NEPAD/GoSL Budget 414 Ministry o f Water Resources (MoWR) Institutional Support for Capacity Building New Western Area GoSL Feasibility Studies for Water Supply Facilities Ongoing Western Area GoSL Budget Budget 75,000 25,000 12,500 - 39,037 35,000 60,000 65,000 85,000 40,000 8,250 - 3,153 5,000 2,000 5,000 5,000 2,000 - - 4,000 1,000 3,000 20,000 3,153 3,566 2,200 2,000 5,500 990 59,400 60,500 - - - - - 38,500 38,500 44,048 22,000 4,204 4,754 2,420 2,200 6,050 - - 2,200 82,500 2,420 27,500 13,750 - - - 3,300 1,100 3,300 - - 3,630 1,210 3,630 In
 millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) 414 Sierra Leone Water Company (SLAWACO) Three (3) Towns - Bo, Kenema and Makeni - Funding Source FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic Type 64,500 21,000 68,500 26,478 44,766 29,125 Water Supply System Project Phase II
 Ongoing Bo, Kenema, AfDB/GoSL Loan/Budget 8,500 3,000 2,500 7,178 2,750 7,895 Rural Water Supply and Sanitation Project Ongoing Natiowide AfDB/GoSL Loan/Budget 15,000 2,000 25,000 2,200 22,016 2,420 Bombali Construction of 100 Solar Powered Borehole in 13 Districts Ongoing Nationwide GoSL Budget Construction of 100 Solar Powered Boreholes Ongoing Nationwide Saudi/GoSL Grant 41,000 Construction of 45 Industrial Boreholes (Urban Wash Supply) Ongoing Nationwide GoSL Budget 4,000 5,000 41,000 Completion o f Construction of Water Supply Facilities in Six (6) District Capitals and Other Small Towns Ongoing Nationwide Construction of Water Supply System in Bonthe Municipal New Bonthe City GoSL GoSL Budget Budget Procurement and Installation of Meters, Billing Software and Laboratory Equipment Ongoing Nationwide GoSL Budget x 414 National Water Resources Management Agency (NWRMA) Construction of 10 Hydrological Monitoring Network and 25 Ground Water Monitoring Stations Establishment of Water Quality Laboratories 414 Guma Valley Water Company (GVWC) New New Nationwide Nationwide GoSL GoSL Budget Budget - 188,500 Emergency Water Supply Project in Western Area Ongoing Western Area GoSL Budget Freetowm Water Supply Rehabilitation Project ongoing Western Area DfID/GoSL Grant/Budget 32,000 Water Sector Reform Project Ongoing Western Area AfDB/GoSL Loan/Budget 11,500 Freetown Emergency Recovery Project Ongoing Western Area IDA/GoSL Grant/Budget 65,000 5,000 2,000 6,000 3,000 3,000
 13,742 3,000 - - - Freetown W ater Supply and Sanitation Master Plan Ongoing Western Area AfDB/GoSL Grant/GoSL Freetown WASH and Aquatic Revamping Project New Western Area Kuwaiti Loan/GoSL 55,000 25,000 5,742 5,000 Fund/ADB 404 Ministry o f Transport and Aviation (MoTA) Institutional Support to Transport Planning, Project and Contract Management and Monitoring New Nationwide GoSL Integrated and Resilient Urban M obility Project (IRUMP) Ongoing Western Area IDA/GoSL Feasibiity Study on Traffic Lights
 Project Ongoing Nationwide GoSL Improving Kissy-Targrin Ferry Transportation Ongoing Western Area GoSL 408 Ministry o f Works and Public Assets (MoWPA) Rehabilitation of Government Administrative Buildings Ongong Western Area GoSL Rehabilitation of Government Residential Quarters Ongoing Western Area GoSL Budget Budget Budget Budget Budget Budget 35,000 7,500 5,000 8,250 35,000 300 5,000 200 2,000 5,000 330 5,500 220 2,200 - 13,600 - 14,960 5,000 2,000 5,500 2,200 - - - - 20,000 - - - 4,400 5,500 - 5,000 2,200 6,600 3,300 3,300 - 4,840 6,050 - 5,500 2,420 7,260 3,630 3,630 - 63,500 14,042 50,500 24,684 3,300 3,630 22,000 25,000 5,000 10,000 1,500 - - - 5,742 5,000 20,000 16,000 5,000 8,000 1,500 - - - 7,656 13,398 9,075 363 6,050 242 2,420 16,456 6,050 2,420 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Demolition o f M ulti-Storey Building (former UN Building) Funding Source FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic Type at Siaka Steven Street Ongoing Western Area GoSL Budget 4,000 4,400 4,840 Feasibility Study for the Construction of Government Administrative Buildings New Nationwide GoSL Budget Feasibility Study for the Construction o f Local Council Buildings in Port Loko, Falaba and Karene districts New North and GoSL
 Budget Rehabilitation of Existing Presidential Lodge New Nationwide GoSL Budget Feasibility Study for the Construction of Additional Presidential Lodge in District Capitals New Nationwide GoSL Budget North West 408 Sierra Leone Roads Authority (SLRA) Completion of Township Roads Feasibiity Study for the Construction of Major Highways Ongoing Nationwide GoSL Budget 200 200 2,000 200 220 220 2,200 220 242 242 2,420 242 236,000 217,000 270,020 394,282 95,500 631,924 37,000 5,000 157,850 5,500 9,821 308,485 6,050
 9,821 23,000 x i Reconstruction of Bo-Bandaj uma Road Ongoing Bo, ABD/OFID Loan/Budget 40,000 10,000 73,270 Bandajuma /GosL Reconstruction of Pendembu - Kailahun Road Ongong Kenema, IDB/KFAED/ Loan/Budget 35,000 5,000 10,893 43,572 Reconstruction o f Bandajuma - MRU Bridge Ongong Pujehun Reconstruction of 3 Bridges in Magbele, Mabang and Kpangbama Ongoing Pujehun, /GoSL EU/GoSL EU/GoSL Kailahun Saudi Fund Moyamba and Port Loko Loan/Budget Loan/Budget 45,000 45,000 - - 64,250 72,500 2,242 4,822 15,000 2,500 2,466 5,304 Construction of Hill Side By Pass Road Phase II Ongoing Western Area KF/GoSL Loan/Budget Reconstruction of Tokeh-Lumely (Peninsular) Road Ongoing Western Area KF/GoSL Loan/Budget 34,000 Rehabilitation of Limkokwing University - Regent Road Project Ongoing Western Area PRC/GoSL Grant/Budget 37,000 Spots Improvement on Highways Completion of Bandajuma-Pujehun-Gbondappi Construction of Bo-Mattru Road Project Labour Based Public Works 409 Ministry o f Trade and Industry (MoTI) New Nationwide Ongoing South Ongoing South New Nationwide GoSL GoSL GoSL GoSL Preparatory Activities Towards the Establishment of Special Economic Zones Support to Micro-Small and Medium Enterprises New New Institutional Support to Ministry o f Trade and Industry Ongoing Nationwide Nationwide IDB/GoSL Nationwide GoSL GoSL Budget Budget Budget Budget Budget Budget Budget 55,000 60,000 10,000 10,000 10,000 40,000 20,000 30,000 40,000 19,154 27,150 1,850 50,000 22,000 33,000 50,000
 4,500 22,000 - 24,200 - 4,500 - 500 21,000 500 550 23,100 550 38,307 - 2,467 2,150 24,200 134,101 55,000 26,620 605 25,410 605 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) 409 Sierra Leone Investment and Export Promotion Agency (SLIEPA) Funding Source Institutional support to SLEIPA Ongoing Nationwide GoSL Budget FY 2020 Budget FY 2021
 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic Type - 300 300 - 330 330 - 363 363 Cluster Four: Governance and Accountability for Results 126,666 89,627 11,166 103,138 35,200 113,451 106 Office o f the C h ief Minister 106 Directorate o f Science, Technology and Innovation Support to E-governance Project Institutional Support for Capacity Building New New Nationwide Nationwide GoSL GoSL Budget Budget 128 Ministry o f Foreign Affairs and International Cooperation (MoFAIC) Rehabilitation of Foreign Missions Chancery Building and Am bassador’s Residence in Addis Ababa Ongoing International Construction Works at the Permanent Mission in New York Ongoing International x i i GoSL GoSL GoSL Budget Budget Budget International Western Area PRC/GoSL Grant/ Budget 5,000 Feasibility Study for the Construction of Chancery Buildings Construction of Sierra Leone Diplomatic Academy 124 Attorney General and Ministry o f Justice (AG&MoJ) Feasibility Study for the Construction of Justice Sector Complex Increasing Access to Justice Institutional Capacity Building 118 Judiciary Feasibility Study for Administrative Building and Courtrooms Rehabilitation/Construction of Courtrooms in District Capitals Institutional Capacity Building 124 Law Officers Department (LOD) Rehabilitation/Construction of Law Officers Buildings in the Districts 110 Law Reform Commission (LRC) New New New New New New New New Western Area GoSL Nationwide Nationwide
 Nationwide Nationwide Nationwide GoSL GoSL GoSL GoSL GoSL Budget Budget Budget Budget Budget Budget Ongoing Western Area GoSL Budget Support for Institutional Capacity Building Ongoing Nationwide GoSL Budget Establishment for Alternative Dispute Resolution Project Ongoing Nationwide IDB/GoSL 124 Office o f the Administrator and Registrar General (OARG) Automation of Registrar General’s Records Ongoing Nationwide GoSL Budget 124 Council o f Legal Education: Sierra Leone Law School Feasibility Study for the
 Construction of Sierra Leone Law School Building New Western Area GoSL Budget - - 6,000 6,000 3,000 3,000 5,000 21,570 - 19,570 5,000 5,000 9,570 2,000 1,000 200 500 300 900 100 700 100 600 600 200 100 100 800 800 250 250 - - - 1,666 1,666 - - - - - - - - - 666 666 - - 6,600 6,600 3,300 3,300 21,570 19,570 5,000 5,000 9,570 2,000 1,100 220 550 330 990 110 770 110 660 660 220 110 110 880 880 275 275 - - - - - - - - - - 7,260 7,260 3,630 3,630 23,727 21,527 5,500 5,500 10,527 2,200 1,210 242 605 363 1,089 121 847 121 726 726 242 121 121 968 968 303 303 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) 133 Ministry o f Information and Communications (MoIC) West Africa Regional Communications Infrastructural Programme Ongoing Nationwide Enhancing the Dedicated Information Security System Ongoing Nationwide Government Intergrated Messaging System (GIMS) Ongoing Nationwide Operationalization and Expansion of eGovernment Platform Ongoing Nationwide Funding Source GoSL GoSL GoSL GoSL Type Budget Budget Budget Budget National Fibre Optic Backbone Phase II New Nationwide China Exim Loan/Budget 5,000 205 Ministry o f Internal Affairs (MoIA) Establishment of an Integrated Immigration Control System Ongoing Nationwide Strengthening Boarder Security Ongoing Nationwide /GoSL GoSL GoSL - Budget Budget 5,000 2,000 -
 2,200 300 500 200 700 300 1,400 1,000 400 330 550 220 770 330 1,540 1,100 440 - - - 2,420 363 605 242 847 363 1,694 1,210 484 FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic x i i i 203 National Civil Registration Commission (NCRA) Integrated Civil Registration and Vital Statistics and ID Management System o/w Exhibition and Update o f the Civil Register Ongoing Nationwide GoSL Budget Prinitng and Distribution of ECOWAS/ICAO Compliant
 Multi-purpose ID Cards and other Certificates Ongoing Nationwide GoSL Budget Rehabilitation of National Civil Registration Authority 103,000 8,000 5,500 12,500 34,000 13,750 6,000 5,000 5,000 10,500 5,500 5,000 11,550 6,050 5,500 New Complex New Western Area EU/GoSL Grant/ Budget 70,000 2,000 2,500 2,000 9,000 2,200 EU Technical Support to the Governance Sector in the Area of Civil Registration New Nationwide EU/GoSL Grant/ Budget 33,000 107 Ministry o f Local Government (MoLG) Social Capital Approaches to Rural Development in Sierra Leone (SCARDSiL) Support for Institutional Capacity Building Rehabilitation/Reconstruction of Court Barrays New New New Nationwide Nationwide Nationwide Gosl GoSL GoSL 117 Cabinet Secretariat and Head o f the Civil Services (CS&HOCS) Establishment of Wages and Compensation Commission Ongoing Nationwide GoSL Feasibility Study for the Construction of Public Service Academy Ongoing Western Area GoSL 122 Human Resource Management Office (HRMO) Budget Budget Budget Budget Budget Civil Service Reform Project Ongoing Nationwide GoSL Budget 116 Parliamentary Service Commission (PSC) Feasibility for the Construction of Parliamentary Estate Ongoing Nationwide GoSL Budget 206 Sierra Leone Police (SLP) Rehabilitation of Police Stations and Facilities Construction of New Police Stations Ongoing Nationwide New Nationwide GoSL GoSL Budget Budget - - - - - 3,000 - - - - - - 900 400 300 200 700 500 200 200 200 200 200 7,000 2,000 5,000 25,000 - - - - - -
 990 440 330 220 770 550 220 220 220 220 220 7,700 2,200 5,500 - 1,089 484 363 242 847 605 242 242 242 242 242 8,470 2,420 6,050 ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE In millions of Leones (Le’m) MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) 201 Ministry o f Defence (MoD) Rehabilitation of Military Barracks and Facilities Support to M ilitary for Food Production Construction of M ilitary Barracks and
 Facilities 209 Central Intelligence and Security Unit (CISU) Funding Source Procurement of Specialized Surveillance Equipment Ongoing Nationwide GoSL Budget 110 Anti Corruption Commission (ACC) Construction of Anti-Corruption Building Ongoing Western Area GoSL Budget 110 Sierra Leone Insurance ommisiion Construction of SLICOM Building Ongoing Western Area GoSL Budget 121 Audit Service Sierra Leone (ASSL) Construction of ASSL Headquarters Ongoing Western Area GoSL Budget 123 Public Service Commission (PSC) Construction of PSC Headquarter Building New Western Area GoSl Budget x i v 208 National Fire Force (NFF) Strengthening National Fire Service System Ongoing Nationwide GoSl Budget 207 Sierra Leone Correctional Services (SLCS) Rehabilitation of Correctional Centres and Facilities Ongoing Nationwide Preparatory W ork for the Relocation of Pademba Road Prison Ongoing Nationwide 134 National Elections Commission (NEC) Rehabilitation of Administrative Buildings Construction of Adm inistative Buildings 110 National Assets and Government Property Commission (NAGPC) New New Nationwide Nationwide GoSl GoSl GoSl GoSl Budget Budget Budget Budget FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic Type - 13,007 - - - - - - - - - 4,000 6,007 3,000 4,000 4,000 5,000 5,000 3,000 3,000 5,000 5,000 - - 300 300 2,500 2,000 500 3,500 1,500 2,000 300 300 1,300 1,000 300 - - - - - - - - - - 5,000 5,000 19,713 4,400 12,013
 3,300 2,000 2,000 5,500 5,500 3,300 3,300 5,500 5,500 - - 330 330 2,750 2,200 550 3,850 1,650 2,200 330 330 1,430 1,100 330 - - - - - - - - - - 1,200 1,200 21,684 4,840 13,214 3,630 2,200 2,200 6,050 6,050 3,630 3,630 6,050 6,050 - - 363 363 3,025 2,420 605 4,235 1,815 2,420 363 363 1,573 1,210 363 5,000 2,600 1,000 2,860 - 3,146 5,000 2,600 1,000 2,860 3,146 1,210 Support for Institutional Capacity Building New Western Area Gosl Budget 413 Energy and Water Regulatory Agency 12,000 Electricity Sector
 Reform Project - Result Based Financing (MCC) Support for Institutional Capacity Building New New Nationwide MCC/GoSL Grant/Budget 12,000 Nationwide GoSL Budget Cluster Five: Empowering Women, Children, and Persons with Disability 305 Ministry o f Social Welfare, Gender and Children Affairs (MoSWC&CA) Women’s Economic and Development Fund for Female Entrepreneurs New Nationwide GoSL Budget 1,000 1,100 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Funding Source Rehabilitation of Approved Schools and Remand Homes New Nationwide GoSL Post Ebola Recovery Social Investment Fund (PERSIF) Ongoing Nationwide AfDB/GoSL Rehabilitation of National Training Centre and Development Type Budget Budget 5,000 of Curriculum for Short-Term Professional Training New Western Area GoSL Budget Cluster Six: Youth Employment, Sports, and Migration 310 Ministry o f Youth Affairs (MoYA) Youth Entrepreneurship Scheme Establishment of Youth Farms o/w Social Mobilisation x v Training in farm Equipment Maintenance Training in Extension Services Labour Cost Monitoring and Coordination Establishment of Demonstration Farms Youth in Fisheries Project Car W ash Center Project 310 National Youth Commssion Youth
 Empowerment Fund 313 National Youth Services Ongoing Nationwide New New New New New New New Nationwide Nationwide Nationwide Nationwide Nationwide Nationwide Nationwide Ongoing Nationwide New Natiowide GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL GoSL Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget Establishment of National Apprenticeship Scheme Ongoing Nationwide GoSL Budget Cluster Seven: Addressing Vulnerabilities and Buidling Resileince 417 Nuclear Safety and Radiation Protection Authority
 (NSRPA) Support for Institutional Capacity Building Ongoing Western Area GoSL Budget 422 Sierra Leone Meteorological Agency (SLMA) Support for Institutional Capacity Building New Nationwide GoSL Budbget 410 National Protected Area Authority (NPAA) REDD Plus and Capacity Building Project Ongoing Nationwide GoSL Budget Sierra Leone Sustainable Protected Areas Management and Livelihoods Project Ongoing Nationwide GoSL Budget - - - - - - 600 500 500 57,762 56,362 30,000 21,000 1,000 1,000 1,000 15,000 1,000 2,000 3,362 2,000 1,000 - - - 660 550 550 29,038 27,498 5,000 16,600 1,100 1,100 1,100 10,000 1,100 2,200 3,698 2,200 - - - - 1,000 - 1,100 1,000 - 400 2,673 300 300 200 200 2,173 500 1,673 400 - - - 1,100 - 440 2,940 330 330 220 220 2,390 550 1,840 440 - - - 726 605 605 31,942 30,248 5,500 18,260 1,210 1,210 1,210 11,000 1,210 2,420 4,068 2,420 - 1,210 1,210 - 484 484 3,234 363 363 242 242 2,629 605 2,024 In millions of Leones (Le’m) ANNEX 4-SIERRA LEONE PUBLIC INVESTMENT PROGRAMME FY 2020-2022 GOVERNMENT OF SIERRA LEONE MDA National Development Plan Cluster/Ministry, Department Status Location Code and Agency (MDAs) Cluster Eight: Means o f Implementation 127 Ministry o f Planning and Economic Development (MoPED) Strengthening Local and National Level Planning and Coordination Ongoing Nationwide Project Preparatory Facility Ongoing Nationwide Funding Source GoSL GoSL 127 National Monitoring and Evaluation Department Strengthening Local and National Monitoring
 and Type Budget Budget Evaluation System Ongoing Nationwide GoSL Budget 127 National Council for Civil Education and Development Strengthening Community Civil Engagement New Nationwide GoSL Budget 138 Statistics Sierra Leone (Stat SL) Agriculture Tracking Survey (ATS) Ongoing Nationwide FAO/GoSL Grant/GoSL Labour Force Survey(LFS) - Assessing Youth Unemployment Ongoing Nationwide IDA/GoSL Grant/GoSL Mid Term Population and Housing Census New Nationwide Rehabilitation of Statistics Sierra Leone Head Office
 Building Ongoing Nationwide GoSL GoSL Grant/Budget Budget X A T 129 Ministry o f Finance (MoF) - - - 2,910 1,500 250 1,160 1,557 Support to Medium Term Expenditure Framework (MTEF) Ongoing Nationwide GoSL Budget Support to Public Financial Management Improvement and Consolidated Project (PFMICP) Ongoing Nationwide IDA/GoSL Support to Project Fuduciary Management Unit Local Government Develoment Grants (Transfers) Ongoing Nationwide Ongoing Nationwide GoSL GoSL Budget Budget Budget Sierra Leone Economic Diversification Project Ongoing Nationwide IDA/GoSL Grant/Budget 1,557 FY 2020 Budget FY 2021 Indicative FY 2022 Indicative Funding Foreign Domestic Foreign Domestic Foreign Domestic 4,467 52,586 614 63,188 3,201 67,254 7,000 5,000 2,000 3,000 3,000 3,000 3,000 2,500 400 800 600 700 7,400 3,000 200 200 - 1,000 2,000 1,000 - - - - 7,700 5,500 2,200 3,300 3,300 2,000 2,000 2,750 440 880 660 770 614 13,943 3,300 220 220 - 1,100 5,742 3,361 614 - - - 3,201 1,650 275 1,276 - - - - 8,470 6,050 2,420 3,630 3,630 2,200 2,200 3,025 484 968 726 847 16,434 3,630 242 242 - 1,210 7,656 3,454 33,495 8,995 8,400 16,100 Sierra Leone Urban Resilient Project Freetown Emergency Recovery Project Financial Inclusion Project 701 Transfers to Local Councils Local Government Develoment Grants (Transfers) Examination Fees for NPSE Examination Fees for BECE GRAND TOTAL New Nationwide New Nationwide Ongoing Nationwide Ongoing Nationwide Ongoing Nationwide GoSL GoSL GoSL Budget Budget Budget - - -
 29,686 5,186 8,400 16,100 - 33,495 8,995 8,400 16,100 1,813,625 1,060,031 1,851,307 1,326,060 2,059,000 1,660,000 FISCAL STRATEGY STATEMENT, 2020-2022 INTRODUCTION Section 21 (1) o f the Public Financial M anagem ent (PFM) Act, 2016 states that "When an election to the Office o f the President o f the Republic o f Sierra Leone has taken place, the new Cabinet shall, based on the principles o f responsible financial managem ent, specify in its first Fiscal Strategy Statement, the fiscal objectives to be applied
 in the next five years ".
In com pliance w ith this provision and follow ing the assum ption o f pow er in A pril 2018, the M inister o f Finance prepared the First Fiscal Strategy Statem ent (FSS) for the five-year period covering 2019 to 2023, w hich w as approved by Cabinet and laid in Parliam ent in N ovem ber 2018.

Sections 21 (2) and 23 (1) o f the A ct also require the M inister o f Finance to prepare A n n u al Fiscal Strategy Statem ents for the su bsequent five years.
Section 23 (1) states: "Not later than the end o f the seventh month o f every financial year, the Minister shall, with approval o f the Cabinet, prepare and lay before Parliament for its information a Fiscal Strategy Statement."

Section 23 (1) (a) to (k) specifies the contents o f the Fiscal Strategy Statem ent.
To com ply w ith this provision, the M inister o f Finance prepared the A n n u al Fiscal Strategy Statem ent for the financial yea r 2020, w hich specifies the fiscal objectives o f G overnm ent for the next three years (2020-2022).

In line w ith sections 22 (1) to (3) and section 23 (1) (a) to (k), the 2020 Fiscal Strategy Statem ent is organised as follow s: Follow ing the introduction, Section I presents the G overnm ent's broad fiscal strategy and objectives.
Section 2 provides an overview o f recent global and dom estic m acroeconom ic developm ents and the m acro-fiscal forecasts for 2020-2022 and underlying assum ptions.

Section 3 presents G overnm ent's fiscal policy for the m edium -term including a review o f recent fiscal developm ents; presentation o f the m edium -term fiscal forecasts (revenue and expenditure) and discusses the revenue enhancing and expenditure m anagem ent m easures for the m edium -term .
Section 4 presents the M edium -Term Expenditure Fram ew ork detailing expenditure ceilings for the key M DAs, both for recurrent and dom estic capital expenditu res for the m edium -term .

Finally, section 5 presents the Fiscal Risks Statem ent, w hich presents a sensitivity analysis o f the m acroeconom ic, fiscal and policy risks to the achievem ents o f the specified fiscal objectives.

This section ends w ith a discussion on the proposed m itigating m easures.

1.
1.

FISCAL STRATEGY AND OBJECTIVES The key objective o f fiscal policy over the m edium -term is to achieve fiscal and debt sustainability through sustained fiscal consolidation.

This is consistent w ith the principles o f Responsible Financial M anagem ent as articulated in Section 20(2) o f the PFM Act, 2016, w hich include, am ong others, the following: 1 (i) achieve and m aintain prudent levels o f public debt so as not to im pose an inequitable burden on future generations;?
(ii) achieve and m aintain an appropriate balance betw een revenues and expenditures o f general G overnm ent; (iii) provide tim ely, reliable, and adequate inform ation to the public on fiscal objectives, data, and risks to ensure transparency in budgetary and financial m anagem ent o f the general Governm ent and public enterprises; and (iv) form ulate and im plem ent fiscal policies to achieve m acroeconom ic stability; (v) and m anage prudently the fiscal risks faced by Sierra Leone.
C onsistent w ith the above fiscal m anagem ent principles, G overnm ent's fiscal objectives rem ained broadly the sam e as specified in its first Fiscal Strategy Statem ent, (2019­ 2023).

In this context, G overnm ent w ill pursue the follow ing fiscal objectives in the m ediu m -term : (i) Im prove dom estic revenue collection from 13.7 percent o f GDP in 2018 to 16.4 percent in 2022.
This target is the outcom e o f a baseline revenue projection agreed w ith the IM F based on the current m acroeconom ic fundam entals.

G overnm ent's revenue target is m ore am bitious at 17.2 percent o f GDP given its com m itm ent to sustain the current m om entum o f enhanced dom estic revenue m obilisation through the im plem entation o f several tax policy and adm inistrative reform s. G overnm ent's objective is to attain dom estic revenue to GD P ratio o f 20 percent by 2023.
H igher dom estic revenues w ill create the fiscal space for priority spending especially on the Free Q uality Education program m e and infrastructure.

(ii) Seek to m aintain G overnm ent expenditure at an average o f 21.5 percent o f GDP durin g 2019 to 2022.

(iii) A com plem entary objective is to gradu ally bring dow n the w age bill to the sustainable level o f 6.0 percent o f GDP by 2021 from 6.7 percent o f GDP in 2019.
In nom inal term s, based on current projections, the G overnm ent w age bill will increase from Le 2.5 trillion in 2019 to Le 2.75 trillion in 2020 and further to Le 3.46 trillion in 2022.

(iv) O n the basis o f the projected higher dom estic revenues and conservative expenditure levels, G overnm ent aim s to reduce the bu dget deficit, including grants, from 5.8 percent o f GDP in 2018 to 3.6 percent o f GDP in 2019 and further dow n to 3.2 percent o f GDP by 2022.
E xcluding grants, the budget deficit w ill decrease from 7.4 percent o f GDP in 2019 to 5.3 percent o f GDP in 2022.

D om estic bank financing o f the deficit w ill be reduced to 2.0 percent o f GDP by 2022.

2 (v) Total public debt w ill be kept below debt sustainability threshold o f 55 percent o f GDP in present value (PV) term s and 70 percent o f GDP in nom inal term s consistent w ith our obligations under the ECO W AS m acroeconom ic convergence criteria for the m onetary union.
External debt w ill not exceed 40 percent o f GDP in PV term s during the period.

The projected decline in the budget deficit is expected to reduce the rate o f dom estic debt accum ulation.

G overnm ent w ill im plem ent the follow ing broad policy strategies to achieve the above stated fiscal objectives: (i) G overnm ent w ill sustain its fiscal consolidation drive by intensifying dom estic revenue collection w hile rationalizing public expenditures.
The details o f the revenue enhancing and expenditure control m easures are described in section 3 o f this Strategy statem ent; (ii) G overnm ent w ill continue to im plem ent the reform s that w ill im prove the integrity and sustainability o f the payroll; (iii) G overnm ent w ill continue to prioritize concessional loans and rely m ore on grants for financing o f projects.
G overnm ent w ill also explore the poss­ ibility o f using non-debt creating financing options such as PPPs w hile taking note o f the associated contingent liabilities.

G overnm ent is also developing a strategy for the clearance o f dom estic arrears.

To enhance debt m anagem ent capacity, G overnm ent is developing a M edium -Term D ebt M anagem ent Strategy focusing on reducing rollover risks and borrow ing costs.

2.
2.

RECENT ECONOMIC DEVELOPMENTS 2.1 Global Economic Developments and Outlook A fter grow ing by alm ost 4 percent in 2017, grow th slowed in the second h a lf o f 2018 to 3.2 percent, reflecting m arked slow dow n in econom ic activities in developed and som e large em erging m arket countries, u nderpinned by escalating trade tensions and an increasingly uncertain policy environm ent.
G lobal econom ic activities are, however, expected to recover som e o f its lost m om entum in the second h a lf o f 2019, helped in part by the recent trade truce at the ju s t concluded G-20 su m m it betw een the US and China, the reopening o f the technology supply value chain, grow th surprises in developed countries in the first quarter o f the year, com bined w ith a m ore supportive m onetary environm ent.
G lobal econom ic grow th is now projected to reach 3.3 percent in 2019 and to firm up further to 3.5 percent in 2020 as activities start to pick up in the second h a lf o f 2019 am id projected recovery in som e large countries in em erging and developing econom ies.

This is also taking place in m idst o f m arkets optim ism o f durable and a credible U S-C hina trade deal coupled w ith accom m odative m onetary policy stance.

B ut risks rem ain tilted to the downside.


These include a possible re-escalation o f trade tensions, policy uncertainty, heightened geopolitical risks, and a sudden sharp tightening o f Financial Conditions.

3 In China, Sierra Leone's biggest trading partner, econom ic perform ance continued to be plagued by the sustained intensification o f the trade dispute w ith the US, w hich continue to underm ine business confidence.
A fter posting robust and better than expected grow th in the last two quarters, grow th su ddenly slowed last qu arter - from April through June - to 6.2 percent.

The econom y is now projected to grow by 6.2 percent in 2019 and further slow dow n to 6.0 percent in 2020, as the econom y continue its gradu al transition from an export-led grow th paradigm to a low but m ore stable and sustainable grow th path that focuses on research and developm ent and services.
In the US, sentim ent indicators and high frequency data su ggest the econom y is grow ing at a robust clip but gradu ally slow ing tow ards its long-term trend.

C onsum er spending is robust, buoyed by a strong labor m arket and continued strong consum er confidence.

By contrast, capital spending by bu sinesses has been w eak, and indicators o f business sentim ent have been soft as the stim ulus from the fiscal im pulse start to fade.
A fter grow ing by alm ost 3.0 percent in 2018, grow th is now projected to slow dow n to 2.6 percent in 2019 and further dow n to 1.9 percent in 2020 as the initial effect o f the fiscal stim ulus continue to dissipate.

The recent G-20 sum m it provided a constructive change in tone about trade discussions, but business sentim ent and investm ent plans w ill likely rem ain sensitive to uncertainty around trade and the global outlook.
F iscal policy is also a source o f uncertainty, w ith both the debt ceiling and the federal budget needing to be resolved.

In the Euro area, the econom ic perform ance continued to be w eighed dow n by m oderatin g external dem and u nderpinned by the current trade dispute betw een the US and China, falling com petitiveness, slow ing dem and for capital goods and the lingering effect o f a possible disorderly no Brexit deal.
A fter a lackluster grow th o f 1.9 percent in 2018, grow th is projected to further slow dow n to 1.3 percent in 2019 and increase slightly to 1.6 percent in 2020.

A gain st this challenging backdrop o f a less supportive external environm ent, S u b­ Saharan A frica's average grow th is expected to increase from 3.1 percent in 2018 to 3.4 percent in 2019 and 3.6 percent in 2020.
The reletively strong grow th is com ing from the non-resource rich countries and the projected recovery o f resource-rich countries in the second h a lf as the current trade truce betw een the US and China is projected to support com m odity prices.

C on su m er price infation rem ained low across advanced econom ies, given the drop in com m odity prices and sluggish w age growth.
For som e em erging m arket econom ies and developin g countries, however, w idening fiscal deficit and currency depreciation are m aking dom estic prices slightly elevated, partially offsetting dow nw ard pressure from low er com m odity prices.

M ost industrial com m odity (m etals and energy) prices have recovered in 2019 follow ing notable declines late last year.
Crude oil prices recovered over the first h a lf o f the year, averagin g $64 per barrel (bbl), supported by production cuts am ong OPEC and its non- OPEC partners, as w ell as the United States' decision to term inate w aivers for its 4 sanctions on Iran.

Oil prices are expected to average $66/bbl in 2019 and $65/bbl in 2020.

However, the supply cuts by OPEC m em bers have resulted in su bstantial spare capacity, w hich lessens the likelihood o f spikes in oil prices in the near term.
Iron ore prices increased by 28.8 percent betw een A u gu st 2018 and Febru ary 2019 am id su pply disruptions from the w orld's top iron ore m iners notably B razil and Australia.

Overall, m etals prices are expected to decline slightly in 2019 and 2020.

2.2 DOMESTIC MACROECONOMC DEVELOPMENTS The Sierra Leone econom y grew by 3.5 percent in 2018 com pared to 3.8 percent in 2017.

The slow dow n in real G D P grow th reflects m ainly the w eak perform ance in the m ining and construction sectors.
The Ton kolili Iron Ore M ine rem ained closed through out 2018.

The production o f rutile w as low er than projected m ainly due to periodic disru ptions in production caused by em ployee strike actions during the year.

The scaling dow n o f public funded construction activities pending the financial and technical audits also contributed to the slow dow n in econom ic activities in 2018.
The non-iron ore econom y grew relatively stronger at an estim ated 5.4 percent in 2018 driven by the pickup in other m ining activities including diam ond, bauxite and zircon production; norm al agriculture activities and strong grow th in the services sectors.

Inflationary pressures m oderated tow ards the last qu arter o f the year, but rem ained high throu ghou t 2018.
Inflation rose gradu ally from 14.5 percent in Jan u ary to a peak o f 19.3 percent in O ctober before m oderating to 17.5 percent in D ecem ber 2018.

The rise in inflation during the year can be attributed to several factors m ost notably the pass-th rough effect o f the depreciation o f the Leone, liberalisation o f dom estic fuel prices and food related supply shocks.

The m oderation in inflationary pressures in the last quarter o f the year w as supported by decline in food prices during the period.
Annu al average inflation for 2018 estim ated at 16.6 percent w as lower com pared to 18.2 percent recorded in 2017.

R eflecting largely the fiscal consolidation m easures im plem ented by G overn m en t in the last three quarters o f the year, the overall budget deficit, including grants, shrunk from 8.8 percent o f GDP in 2017 to 5.8 percent o f GDP in 2018.
D om estic revenues increased to 13.7 percent o f GDP in 2018 from to 12.3 percent o f GDP in 2017 while G overnm ent expenditures w ere contained at 21.5 percent o f GDP com pared to the budgeted am ount o f 23.5 o f GDP.

The trade deficit increased m arginally to 14.6 percent o f GDP in 2018 from 14.5 percent o f GDP in 2017 as the sharp drop in exports w as not fully offset by the negligible increase in im ports.
However, the current accou nt im proved to 13.8 percent o f GDP in 2018 from 14.5 percent o f GDP in 2017 m ainly due to an increase in the inflow o f private transfers.

Despite the increase in foreign direct investm ents (FDI), the surplus in the capital and current account decreased to U S$479 (11.7 percent o f GDP) in 2018 from U S$507.4 (13.7 percent o f GDP).
A s a result, the overall balance o f paym ents w orsened to a deficit o f US$34.6 m illion (0.9 percent o f GDP) in 2018 from US$6.1 m illion (0.2 percent o f GDP) in 2017.
5 Gross international reserves decreased from U S $ 5 0 1 m illion (equivalent to 3.7 m onths o f im ports) in 2017 to US$ 483 m illion (3.6 m onths o f im ports) in 2018, partly reflecting the sale o f foreign exchange by the B ank o f Sierra Leone at the w eekly auctions to the sm oothen the volatility in the exchange rate o f the Leone to the US Dollar.
D espite this, the official exchange rate o f the Leone to the US D ollar depreciated by 11.8 percent, from L e 7 ,5 4 1.46 per USD at the end o f D ecem ber 2017 to Le 8,429.79 per USD at the end o f D ecem ber 2018.

The Stock o f total Public D ebt (external plus dom estic) stood at Le18.99 trillion (USD2.24 billion) at end D ecem ber 2018 representing 60.8 percent o f GDP.
E xternal debt am ounted to Le13.35 trillion (US$1.57 billion) accou nting for 70.3 percent o f total public debt and 38.6 percent o f GDP.

D om estic debt am ounted to Le 5.64 trillion (US$665.57 m illion) accou nting for 29.8 percent o f total public debt and 22.2 percent o f GDP.
2.3 MEDIUM-TERM MACROECONOMIC FORECASTS, 2020-2022 The M acro-Fiscal W orking Group produced forecasts o f key m acroeconom ic aggregates using the Sierra Leone Integrated M acroeconom ic M odel (SLIMM) in late M arch/early A pril as part o f the preparations for the first review o f the E xtended C redit Facility (ECF) as w ell as to inform the preparation o f the 2020 FSS.
These projections w ere discussed w ith the IM F during the technical discussions on the m edium -term outlook o f the econom y in A p ril 2019.

The m acroeconom ic projections presented in this Fiscal Strategy Statem ent are the final figures agreed w ith the IM F follow ing the discussions.

The original forecasts produced by the M acro-Fiscal W orkin g Group are also presented in Table 2.3.3 below.
Real Gross Domestic Product (GDP) R eal GDP grow th is projected at 5.1 percent in 2019 follow ing the resum ption o f higher- grade iron ore m ining at the M aram pa M ines by S L M ining Com pany.

Econom ic grow th is forecast to average 4.8 percent over the m edium term (2020-2022).

The expected increase in public and private investm ents in agriculture, fisheries and tourism will increase ou tput in these sectors.
This w ill be supported by the im plem entation o f sectoral reform s to im prove the productivity o f the sectors as part o f G overnm ent's efforts to diversify the econom y.

The scaling up o f public construction activities and investm ents in energy com bined w ith im provem ents in business regulatory reform s w ill im prove the business environm ent and boost private investm ent in m anufacturing and services sectors.
The planned increased investm ents in diam ond, rutile and gold m ining activities w ill also contribute positively to the grow th prospects o f the econom y.

A griculture sector grow th w ill average around 4.4 percent during 2020 to 2022 from 4.1 p ercen t in 2019.

In d u stry grow th w ill average 8.8 p ercen t follow in g the recom m encem ent o f iron ore m ining in 2019 as w ell as the expansion in other m ining activities, m anufacturin g and construction.
Services sector is projected to grow by an average o f 5.1 percent over the m edium term from 4.8 percent during 2019 w ith increased activities in tourism , telecom m unications and transport.

6 Table 2.3.1 Sector GDP Growth Projections in the Medium Term (2019-2022) G r o s s D o m e s tic P rod u ct b y S e c t o r ( 2 0 0 6 P rice) A gricu ltu re.
F o r e str y and F ish in g C rop s Livestock Forestry5 Fishery In d u stry M inins and Qm rrying Iron Ore Other Minerals M a n ifa ctu m g and Handicrafts E lectncity and W ater Supply Construction S e r v ic e s Trade and Tourism Transport Storage and C om m uncation Finance.
Insurance and R eal Estate Administration o f P u b ic Services O tter Services Im puted F in a n c ia l S e r v ic e s Indirect Taxes (N et) 2 0 1 8 3 .9 1 4.1 2.6 4.7 2.8 -2 5 -4 .0 -1 0 0 .0 5 3 3 2 4.8 -6 .5 4.1 1.9 4.0 4.0 5.4 4 .7 3.4 5.5 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 4.1 4 .6 3.0 3.5 2 2 13.5 2 2 .4 0 .0 1 3 4 3 4 .6 5.0 4.8 4 .0 4 .8 4 3 6.2 5.0 2.3 2 3 4 3 4 .9 3 2 3.0 2 .4 6 2 7.4 5 0 .0 1.4 4 3 4.8 5 3 5.1 5.0 5.0 4 3 6 3 5.0 2 3 2 3 4 .4 5 .0 3 .2 2 .4 2 .4 7 .0 S.8 3 3 .3 3 .7 4 .0 4 .7 5 .8 5.1 5 .0 5 .0 4 .2 6 3 5 .0 2 .3 2 3 4.4 5.0 3.2 2.4 2 .4 5.4 5.8 2 5 .0 0.7 4.2 4.7 5.4 5.1 5.0 5.0 4.2 6.2 5.0 2.3 2.3 R e a l G D P at M a r k e t P rices 3 .5 5.1 4 .7 4 .8 4 7 Source: Sierra Leonean A u thorities and IM F S ta ff Estim ates and Projections Inflation Inflationary pressures are projected to m oderate over the m edium term w ith end o f period inflation declining to single digit o f 9.0 percent in 2022.
Over the sam e period, an nual average w ill trend dow nw ards from 15.7 percent in 2019 to 9.6 percent in 2022.

The decline in inflation w ill be driven by the expected stability in the exchange rate as exports expand; increased dom estic food production that w ill assist in dam pening food inflation; and tight m onetary policy stance o f the B ank o f Sierra Leone supported by fiscal consolidation.

The table below show s projection o f inflation over the m edium term .
Table 2.3.2: Projection o f Inflation 2019 2020 2021 2022 E nd o f Period 14.0 A nnual A verage 15.7 12.0 13.0 9.0 9.6 10.2 11.1 7 External Sector Exports Follow ing the drop in 2018, exports w ill recover strongly, grow ing by 38.7 percent in 2019 follow ing the resum ption o f iron ore m ining at the M aram pa Mines.

E xports are projected to increase further by 21.6 percent in 2020 and 10.2 percent in 2021 before m oderatin g to 9.0 percent in 2022.
The grow th in export w ill be driven by increased investm ents to expand the production o f diam onds, rutile and bauxite as w ell as in the produ ction o f cash crops including oil palm , cocoa, coffee, cashew, fish and timber.
Imports Im ports are projected to grow by an average o f 5.4 percent in 2019 and by an average o f 5.8 percent during 2020 and 2021 before m oderating to 2.3 percent in 2022, reflecting largely the increase in econom ic activities as m ining, construction and agricultural activities expand.

Current Account The current account deficit (in clu din g official transfers) is projected to narrow to 11.7 percent o f GDP in 2019 m ainly due to the projected increase in exports.
The current accou nt deficit w ill narrow dow n to an average o f 9.5 percent o f GDP during 2020-2022.

The im provem ent in the current account w ill be supported m ainly by im provem ent in the trade balance and the inflow in private transfers.

Balance o f Payments The overall balance o f paym ents deficit w ill narrow to 0.3 percent o f GDP in 2019.
The B O P position w ill turn surplus (averaging 0.5 percent o f GDP) during 2020-2022 as the trade deficit narrow s due to faster grow th in exports; higher FDI inflows as w ell as increased inflows from m ultilateral and bilateral donors to support the im plem entation o f capital projects.

Gross Foreign Reserves Gross foreign reserves are projected to average 3.5 m onths o f im port cover during 2 0 2 0 ­ 2022 from 3.4 m onths o f im ports in 2019.
Reserves accum ulation w ill be supported by increased foreign exchange inflows from export proceeds official and private inflows.

Money Supply Broad M oney is projected to grow by 18.4 percent at end 2019 and 18.6 percent in 2020 reflecting the higher dom estic bank financing o f the bu dget deficit during the period.

Thereafter, m oney supply grow th w ill decline gradu ally to 13.6 percent by end 2022 as bank financing o f the bu dget deficit falls to 1.4 percent o f GDP.
Exchange rate The exchange rate w ill continue to be determ ined by the forces o f the m arket (dem and and supply).

Accordingly, the exchange rate is projected to stabilize over the m edium term as exports, FDI and donor inflows increase.
8 Box 2.3.1: Assumptions underpinning the Medium-Term Macroeconomic Forecasts Economic growth: The m edium -term grow th prospects w ill be underpinned by i) resu m ption o f high-grade iron ore m ining at M aram pa; ii) increase in other m ining activities; iii) increased investm ents in agriculture, fisheries and tourism iv) increased investm ents in infrastructure projects; v) im provem ents in the business regulatory en viron m ent.
Inflation: Inflation w ill m oderate to single digit reflecting the i) stabilization o f the exchange rate; im proved dom estic food supply; iii) fiscal consolidation efforts by the G overnm ent; and iv) tight m onetary policy stance that w ill be adopted by the B ank o f Sierra Leone.

Balance o f Payments: The trade deficit w ill narrow due to i) increased m ineral and agricu ltural exports; Im ports grow th is projected to m irror grow th in econom ic activities.
C om bined w ith increased private transfers w ill reduce the current account deficit; the im provem ent in business clim ate w ill attract Foreign D irect Investm ents leading to an increase in the surplus in the capital and financial accou nts and hence im prove the overall balance o f paym ents.

Exchange rate: The exchange rate is expected to rem ain m arket determ ined and move in line w ith the differential betw een dom estic and the foreign inflation.
Gross foreign exchange reserves: Increased exports, FDI and donor inflow s im prove the gross foreign reserves position over the m edium term.

Money Supply: M oney supply growth will decline as dom estic bank financing decreases w ith fiscal consolidation.
Methodology used for forecasting Macro-fiscal Aggregates G overnm ent established a M acro-Fiscal Strategy Group responsible for m acroeconom ic m odeling and forecasting section (Part III, section 7 o f the Public Financial M anagem ent Regulations, 2017).

The group com prises technical sta ff o f the M inistry o f Finance, B ank o f Sierra Leone, N ational Revenue A u th ority (N R A ), Statistics Sierra Leone (Stat- S L), and the National M inerals A gen cy (N M A ).
Occasionally, other sector representatives are invited to the jo in the w orkin g group.

First, a nation-w ide E conom ic Prospects Survey w as carried out to collect the relevant data from both the public (MDAs) and enterprises operating in various sectors including agriculture, m ining, m anufacturing, construction, and services.

In the past three years, the M O F has focused on collection o f data from the non-m ining sectors while the N M A spearheaded data collection from the m ining sector.
The objective o f the survey is to validate the output data for the m ost recent yea r and assess prospects in each sector for the m edium -term .

The data/inform ation collected from this exercise form s the basis o f the assum ptions underpinning the m acroeconom ic and fiscal forecasts.

9 Second, the M acro-Fiscal W orkin g Group hold a M acro-Fiscal W orkin g Session to discuss the data and assum ptions.
These data and assum ptions are fed into the Sierra Leone Integrated M acroeconom ic M odel (SLIMM) and the M ineral Revenue Forecasting M odel b u ilt w ith assistance from the O verseas D evelopm ent Institute (ODI) and the International M onetary Fund (IM F), respectively to produce forecasts o f m acroeconom ic and fiscal aggregates.

The forecasts are su bsequently discussed w ith the International M onetary Fund during periodic review o f perform ance under the E xtended C redit Facility arrangem ent.
Table 2.2.3 Comparison o f IMF and GoSL Agreed Forecasts and Macro-Fiscal Working Group Forecasts (SLIMM forecasts) IM F Staff & GOSL Projections SL IM M PRO JECTION 'S Incom e & E x pen dinre 2019 2020 2021 2022 2020 2021 2022 RealGDP Excirdins Iron ore Consumer paces (end o f period) Consumer paces (anrsal avenge) M oney A C redit Broad Money Reserve M oney E xtern al S ecto r 0 racial Exports (U S .
do Gan) Official Imports (U S. do Gan) C uuent Account Balance Indudme OtScol Icm sS rs Ex:being Official lia rs ten O r era I B a h nee o f Paym ents F iscal Sector G ovem nent Income Dom estic E e\e m e G ra tis Total expenditure Overall fiscal balance (jrdudffE aranfi) (exrbdma a-arts) 5.1 4 i S i 8.8 11.7 11.3 S.4 3.5 % o fG D P urkss otherwise indicated % ofG D P udess otherwise indicated -11.6 -1 5 2 -0 3 -10.1 -1 2 5 0.7 -9.2 -11.7 0 3 -8.S -11.5 1.2 (10.7) (13.4) 0.2 175 14.1 3.8 2 1 3 -3.6 -7.4 173 1 4 5 2 5 2 1 5 -4 2 -6.7 17.7 15.6 2 1 21.6 -3.9 -6 18.5 16.4 2.1 21.6 -3.2 -5.3 17.2 14.2 3.0 21.2 (3.8) (6.9) (8.0) (9.5) 0.7 17.8 15.0 2 8 21.2 (3.3) (6.0) (8.4) (9.8) 0.6 18.6 16.0 2 6 21.0 (3.2) (5.6) 6.0 4.6 8.0 8.1 10.3 10.2 17.9 4.9 (7.4) (8.7) 1.5 19.6 17.2 2 4 21.6 (2.6) (4.7) Outstandsc debt (domestic and exfcrr 62.6 635 65 64.5 54.3 53.3 51.5 48.8 M em orandum I terns Gross International Reserves (S trj> Cm moretfc o f im ports) Nominal G D P($ Nominal GD P(Lebtt) Nominal GDP Excl Iron ore (Le bn) 500 3.4 598 3 5 623 3.5 610 3.5 3,945 4,118 4,29S i3 7 56,537 Source: IMF staff and GOSL Projections and SLIM
 Model How the Forecasts o f Macroeconomic Aggregates included in the previous FSS compare with actual outcomes and explanation o f the reasons for significant differences between them, if any R eal GDP grow th w as projected at 3.7 percent for 2018 in the 2019 FSS.
Prelim inary estim ate o f GDP grow th rate for 2018 is 3.5 percent.

The low er GDP grow th is due to the low er than projected output o f rutile and the contraction in the construction sector.

10 Inflation forecast in the 2019 FSS for 2018 w as 10.8 percent.

End o f period inflation w as 17.5 percent in Decem ber 2018.

The depreciation o f the exchange rate, liberalization o f fuel prices and low er than anticipated food production contributed to the higher inflationary pressures.
Export w as projected to decline by 11 percent in 2018 because o f the closure o f iron ore m ining and the lull in diam ond m ining during the transition to underground mining.

However, exports grew by 7.7 percent in 2018, reflecting the sharp increase in diam ond exports and non-traditional exports such as oil palm , fish and timber.

The original dom estic revenue target for 2018 w as 14.3 percent o f GDP based on the GDP projections in Septem ber 2018.
Actual revenue collected am ounted to 13.7 percent o f GDP.

The slight difference w as due to the delay in the liberalization o f fuel prices.

Total expenditure and net lending w ere projected at 23.8 percent o f GDP for 2019.

A ctu al outturn w as 21.5 percent o f GDP due to the scale back in dom estic capital spending and several recurrent expenditure control m easures introduced during the year.
Table 2.3.4 Comparison o f Actual Outturn 2018, Revised Projections for 2019 and Projections from 2019 FSS Incom e & Expenditure Real GDP Excluding Iron ore Consumer prices (end o f period) Consumer prices (annual average) M oney & Credit Broad Money Reserve 5.fonev E xternal Sector Official Exports (U.S. dollars) Official Imports (U.S. dollars) Current Account Balance Includine Official Transfers Excluding Official Transfers O verall B alance o f Pavm ents F inane its gap F isca l Sector Government Income D om estic Be venue G runts Total expenditure Overall fisc alb ala nee (including grants) (excludine grants) Financing gap Outstanding debt (domestic and external) M emorandum I terns A c tu a l SLIM M Proj 2019 201S IM F/GoSL Actual So far 2019 2019 2019 FSS Proj 2018 2019 3.5 5.4 17.5 16.4 1 4 5 6.5 7.7 0.6 6.1 4 6 14 0 15.6 16.5 21.4 25.5 6.6 5.1 4.5 14 0 17.46 (Nfarc 15.7 17.46 (Marc 18.4 25.2 1 5.6 ( \ t \ ) 1 1 .6 (M i\) 3S.7 5.4 % of GDP 3.7 5.7 10.8 15.8 15.8 23.8 5.5 4.5 5 2 13.2 14.8 8.7 (11.0) 11.6 22.9 4.2 (13.8) (20.1) (10.7) (13.4) (11.6) (15.2) (15.1) (16.8) (12.1) (13.6) 15.8 13.7 2.1 21.5 (5.8) (7.9) 17.0 14.2 3.0 21.2 (3.2) (6.2) 18.8 15.0 3.S 21.5 (3 6 ) (7.4) 60S 54.3 62.6 17.9 14.3 2.9 23.8 -7.3 -10.2 62.3 482 3 4047 19.6 15.7 2.8 21.3 -4.4 -7.2 62.9 501,5 3 4394 31,0 66 3 5 ,1 0 8 Gross International Reserves (S m) Cm m onths o f im ports) Nominal GDP (S m) Nominal GDP (Le bn) Nominal GDP Ex cl Iron ore (Le bn) 483.0 3.6 3.897.0 32.402.0 32.402.0 500.0 3.4 3.159 38.106 37,3 06 500.0 3.4
 4.190 38.015 3 7 ,5 7 4 Source: SLIM M & G O SL and IM F S ta ff estim ates and Projections 11 3.
FISCAL POLICY 3.1 Recent Fiscal Developments 2017-2019 and the First H alf o f 2019 D om estic revenues increased dram atically to Le4.43 trillion (13.7 percent o f GDP) in 2018 from Le3.34 trillion (12.3 percent o f GDP) in 2017 as the perform ance o f both tax and n on-tax revenues im proved.

T ax revenues increased from 10.6 percent o f GDP in 2017 to 11.1 percent o f GDP 2018 on account o f the im proved perform ance in corporate incom e tax, Goods and Services T ax and im port duties.
The im proved perform ance in tax revenu es could be attributed to the im plem entation o f policy reform s including the rationalization o f tax and duty waivers, liberalization o f the petroleum prices, adoption o f the ECO W AS C om m on External Tariff, audit o f GST credits, special audits inform ed by data m atching, field audit o f large businesses, and stricter enforcem ent o f tax legislations.
N on-tax revenues (including m ining royalties and licenses) increased from 1.6 percent o f GDP to 2.6 percent o f GDP m ainly due to the operationalization o f the Treasu ry Single A ccou n t (TSA) and the upw ard revision o f fees and charges collected by M D As as per revised Finance A ct 2018.
Total expenditures and net lending am ounted to Le6.97 trillion 21.5 percent o f GDP in 2018 com pared to the budget am ount o f Le 7.50 trillion (23.6 percent o f GDP) and the am oun t spent in 2017 Le6.41 trillion (23.5 percent o f GDP).

Both recurrent and capital expenditures w ere low er than-budgeted.

As a percentage o f GDP, w ages and salaries, goods and services and subsidies and transfers w ere low er in 2018 com pared to 2017.
These categories o f recurrent expenditures w ere also low er-than budgeted.
W ages and salaries decreased to 6.3 percent o f GDP in 2018 from 6.9 percent in 2017 and w ere w ithin the budgeted am ount for 2018 as efforts to clean the payroll were intensified during the yea r including the com puterization o f the payroll o f subvented agencies, rem oving from the payroll em ployees above the retirem ent age, m atchin g o f PIN codes, B B AN and N ASSIT num bers and the biom etric verification o f public sector workers.
E xpenditure saving m easures for goods and services including the use o f price norm s and cutting dow n on travels and the size o f delegations w ere also im plem ented.

C apital expenditure w ere low er than the 2017 levels and the am ount budgeted for 2018 due to significant u nder-spending on dom estic funded projects pending the financial audit o f arrears and the technical audit o f key sectors including roads.
R eflecting the above m easures, the overall budget deficit, including grants narrow ed dow n to 5.8 percent o f GDP in 2018 from 8.8 percent o f GDP in 2017.

E xcluding grants, the deficit decreased from 11.3 percent o f GDP to 7.9 percent o f GDP.

N et dom estic financing declined to 2.6 percent o f GDP in 2018 from 4.4 percent o f GDP in 2017.

External financing increased to 2.2 percent o f GDP from 2.18 percent, over the sam e period.
Total G rants received declined slightly to Le673 billion (2.1 percent o f GDP) in 2018 from Le683 billion (2.5 percent o f GDP) in 2017 m ainly due to the fall in project grants to 1.4 percent o f GDP in 2018 from 2.0 percent o f GDP in 2017.

B u dget support grants increased slightly to Le218 billion (0.7 percent o f GDP) from Le137 billion (0.5 percent o f GDP).
12 Table 3.1 Government Revenue and Grants, 2017-2019 In Billions o f Leones Actual % o f Non- Actual % o f Non- Jan-Jun 2017 Iron Ore 2018 Iron Ore 2019 Total Revenue and Grant D om estic Revenue Incom e Taxes GST Custom s and Excise M ines departm ent Other Departm ents Road U ser Charge Grants Program m e (including budget support) Projects 4,023 3,339 1,188 713 909 149 237 140 683 163 519 Source: G overnm ent o f Sierra Leone GPD 15.1 12.3 4.5 2.7 3.4 0.6 0.9 0.5 2.6 0.6 2.0 GPD Table 3.2 G overnm ent Expenditure and Net Lending, 2017-2018 In B illions o f Leones Actual % o f Non- Budget- % o f Non- Actual % o f Non- 2017 Iron Ore 2018 Iron Ore 2018 Iron Ore GDP GDP GDP Total Expenditure & 6,405 24.1 7,383 22.8 6,884 21.2 Net Lending Recurrent Expenditure 4,120 15.5 W ages and Salaries Goods and Services 1,890 1,079 Subsidies and Transfers 549 Interest Paym ents 602 Capital Expenditure & 2,284 Net Lending Foreign Financed Dom estic Financed Net Lending 766 1,286 (23) 7.1 4.1 2.1 2.3 8.6 2.9 4.8 0.1 Source: G overnm ent o f Sierra Leone D uring the first h a lf o f 2019, total dom estic revenue collections am ounted to Le2.78 trillion, exceeding the program m e target by Le213 billion.
The im proved perform ance w as due to the better-than-expected collections o f Incom e taxes, G oods and Services Tax, im port duties, m ineral royalties and licenses, and other non-tax revenues collected by M DAs, T S A agencies and tim ber royalty.

Excise duty on petroleum products, royalty on fisheries and Road U ser C harges w ere less than projected.
T otal grants received during the first h a lf o f 2019 am ounted to Le752 billion com prising bu dget su pport grants o f Le540.3 billion (the equivalent o f US$39.67 m illion and U S$20.7 m illion disbursed by the W orld B ank and the African D evelopm ent Bank, respectively.

Project grants am ounted to Le205 billion.


Total Expenditures and N et Lending in the first-h alf o f 2019 am ounted to Le3.58 trillion com pared to the budgeted o f Le3.77 trillion indicating an u nder-spending o f Le197 billion m ainly due to low er-than-budgeted capital spending as recurrent expenditure exceeded the budgeted am ount.

R ecurrent expenditures am ounted to Le2.78 trillion, exceeding the budgeted am ount by Le67.7 billion.
W ages and salaries recorded an overrun o f Le23.8 billion due to the paym ent o f gratuities to the political class, w hich w as not budgeted.

Goods and services recorded an under-spending o f Le57.8 billion due to low er spending on the social and econom ic sectors, w hich m ore-than outw eigh the overspen ding on G eneral and econom ic sectors (though spending on the Free quality education for secondary schools exceeded the budgeted am ount).
Subsidies and transfers exceeded the budgeted am ount by Le7 3.4 billion due to overrun on transfers to local councils o f Le21.2 billion and energy subsidies o f Le48.9 billion.

Total interest paym ents am ounted to Le550.1 billion, w ithin the budgeted am ount.
C apital expenditure and net lending am ounted to Le794.3 billion, w hich w as Le264.7 billion below the budgeted am ount due to less than expected disbursem ent o f loans and grants as well as less than budgeted spending on dom estic funded capital projects.

The overall bu dget deficit is estim ated at Le42.7 billion com pared to the ceiling o f LeL388.2 billion.

E xcluding grants, the deficit w as Le794.7 billion com pared to the ceiling o f Le1.20 trillion for the first h a lf o f 2019.
3.2 Medium-Term Fiscal Forecasts, 2019- Domestic Revenue Projections - 2020-2022 D om estic revenue is projected to increase from Le 5.3 trillion (14.1 percent o f GDP) in 2019 to Le6.5 trillion (14.8 percent o f GDP) in 2020 and to Le 9.4 trillion (16.4 percent o f GDP) in 2022.

Personal Income Tax: Personal incom e tax is projected to increase from Le 1.4 trillion (3.7 percent o f GDP) during 2019 to Le 2.5 trillion (4.3 percent o f GDP) in 2022.
Corporate Tax: Corporate tax is projected to increase from Le 463.0 billion (1.2 percent o f GDP) in 2019 to Le 939 billion (1.6 percent o f GDP) in 2022.

Goods and Services T ax (GST): GST is expected to increase from Le 992 billion (2.6 14 percent o f GDP) in 2019 to Le 1.24 trillion (2.6 percent o f GDP) in 2020 and to Le 1.94 trillion (3.4 percent o f GDP) by 2022.

Both D om estic GST and Im port GST are projected to rise significantly during the period.
Im port D uties are expected to increase from Le 750.0 billion (2.0 percent o f GDP) in 2019 to Le879 billion in 2020 to Le 1.34 trillion in 2022; M inerals royalties and licenses are projected to increase from Le 240 billion (0.6 percent o f GDP) in 2019 to Le 331 billion in 2020 to Le 407 billion (0.7 percent o f GDP) in 2022.

Fisheries royalty and licenses w ill generate Le140 billion in 2019, Le185 billion in 2020 and to increase to Le 320 billion in 2022.
N on-Tax Revenues including T S A agencies and tim ber royalties w ill increase from Le 790 billion (2.1 percent o f GDP) in 2019 to Le910 billion in 2020 and further to Le 1.21 billion in 2022.

Grants G rants from D evelopm ent Partners are projected to decline over the m edium term from Le 1.4 trillion (3.8 percent o f GDP) during 2019 to Le1.09 trillion (2.5 percent o f GDP) in 2020 and further down to Le 1.19 trillion (2.1 percent o f GDP) in 2022.
B udget support w ill average 1.1 percent o f GDP during 2020-2022 w hile project grants will decline to 0.9 percent o f GDP in 2022 from 1.3 percent o f GDP in 2020.
Table 3.2.1: Domestic Revenue and Grants Projections (Le billion) D om estic R evenue Le b illio n ) 2018 2019 2020 2021 2022 R evenue and G rants D om estic R evenue T ax Revenue Personal Income Tax: Corporate Income Tax Goods and Services Tax (GST) Excises Impart Duties Mining Royalties and Licenses Other taxes N on-Tax G ra n ts B udget S upport P ro je c t G rants Non- Iron O re GDP Source: GOSL and IMF Staff estimates and Projections 15 Table 3.2.2: Domestic Revenue and Grants Projections (% of GDP) Domestic Revenue of GDP) Revenue and Grants Domestic Revenue Tax Revenue Personal Income Tax: Corporate Income Tax Gc-ods and Services Tax (GST) Excises Import Duties Mining Royalties and Licenses •Other taxes Non-Tax Grants Budget Support Project Grants 2018 2019 2020 2021 2022 15.7 13.7 11.8 3.6 1.4 2.7 1.1 2.0 0.7 0.3 1.9 2.lT £ t° r 1.1 r 18.4 16.4 14.3 4.3 1.6 3.4 1.4 23 0.7 0.6 21 21 1.2 0.9
 Source: GOSL and IMF Staff Estimates and Projections Expenditure Forecasts including Public Debt Total Government expenditure and net Lending is projected to increase from Le 8.1 trillion (21.5 percent o f GDP) in 2019 to Le9.43 trillion (21.5 percent o f GDP) in 2020 and further to Le 12.5 trillion (21.6 percent o f GDP) in 2022.
On average, total expenditure will be kept at 21.5 percent o f GDP over the medium-term.

O f the total G overnm ent expen ditu res, recu rren t exp en d itu res are p rojected to increase from Le 5.7 trillion (15.3 o f GDP) in 2019 to Le6.4 trillion (14.6 percent) in 2020 and further to Le 8.2 trillion (14.2 percent o f GDP) in 2022.

W ages and Salaries (in nominal terms) will increase from Le 2.5 trillion in 2019 to Le 2.75 trillion in 2020 and further to Le 3.5 trillion in 2022.
However, as percent of GDP, W ages and Salaries will decline from 6.3 percent in 2020 to 6.0 percent by 2020 in line with the Medium-term Payroll Reform Strategy to ensure sustainability o f the wage bill.

Good and Services expenditures will increase in nominal terms from Le 1.37 trillion in 2019 to Le 1.5 trillion in 2020 and further to Le 1.75 trillion in 2022 in line with the movements in consumer prices.
In percent o f GDP, Goods and Services spending will decline from 3.6 percent to 3.4 percent o f GDP in 2024 and further down to 3.0 percent in 2022.

Interest paym ent w ill increase from Le 1.14 trillion in 2019 to Le1.15 trillion in 2020 and further to Le 1.43 trillion in 2022.

Interest paym ents w ill average 2.5 16 percent o f GDP during 2020-2022.
O f the total interest payment, domestic interest paym ents w ill average 2.3 percent while foreign interest paym ent will average 0.2 percent o f GDP during the period.

Capital expenditures will increase from Le 2.2 trillion (6.1 percent o f GDP) in 2019 to Le2.9 trillion (6.6 percent o f GDP) and further to Le 4.16 trillion (7.2 percent of GDP) in 2022.
O f this, D om estically Financed Capital spending w ill increase from 2.4 percent o f GDP in 2019 to 2.9 percent o f GDP in 2020 and further to 3.6 percent o f GDP in 2022 reflecting Government's priority to invest in infrastructure including roads, energy and water supply.

The fiscal deficit, including grants, is projected to decline from 3.6 percent o f GDP in 2019 to 4.2 percent o f GDP in 2020 and further dow n to 3.2 percent o f GDP by 2022.
E xcluding grants, the fiscal deficit w ill fall from 7.4 percent o f GDP to 6.7 percent o f GDP in 2020 to 5.3 percent in 2022.

Foreign financing o f the deficit is projected to average 1.4 percent o f GDP while dom estic financing w ill average 2.2 percent o f GDP over the m edium term.

Public debt is projected to average 64.5 percent o f GDP over the m edium term rising only from 62.5 percent o f GDP in 2019 to 63.9 percent o f GDP in 2020 and further to 64.5 percent o f GDP in 2022.
Table 3.2.3: Expenditure Projections (Le billion) (Le b illio n ) 2018 2019 2020 2021 2022 T o ta l & p e n d itu re & Met Lending R ecurrent E xpenditure W ages & S alaries Goods and Servces Subsidies and Transfers T o ta l InfereS Paym ents Domestic Interest Foreign Interest D evelopm ent Expenditure Foreign Financed Domestic Finanoed Net Lending C ontingent E xpenditure O verall Balance Balance on C om m itm ent Basis Including G rants Balance on C om m itm ent Basis E xcluding G ra n t T o ta l F inancing Foreign (net) Dome S ic (net) Bark Non- Iron Ore GDP 6,974 I 4,802 f 2,057 1,155 r 629 961 r 866 r 95 2,083 r 1,409 674 f - 89 j (1,873) (2,546) 1,873 714 f 1,159 f 792 32,402 8,079 5,746 2,510 1,371 r 727 1,138 1,027 111 2,293 [ 1,391 901 r 9,435 6,431 2,746 1,503 1,032 1,149 1,050 99 2,914 1,648 1,267 * - 4 ° r 9 ° r (1,362) (2,776) 1,362 277 1,085 958 (1,853) (2,947) 1,853 567 1,285 1,400 10,921 7,275 3,039 1,640 1,339 1,251 1,143 114 3,556 1,924 1,632 - 90 (2,000) (3,041) 2,000 880 1,120 1,339 12,463 8,215 3,459 1,747 1,580 1,429 1,309 120 4,158 2,105 2,054 - 90 (3,838) (3,090) 1,838 1,015 823 1,205 37,574| 43,944 50,642 57,657 Source: GOSL and IMF Staff estimates and Projections 17 Table 3.2.4: Expenditure Projections (% o f GDP) (K o f GDP) 2018 2019 2020 2021 2022 T o ta l E xpenditure & Net Lending R ecurrent E xpenditure W ages & S alaries Gootfc and Servces Subsidies and Transfers T otal In te re i Paym ents Domestic Interest Foreign Interest D evelopm ent E xpenditure Foreign Finanoed Domestic
 Financed Net Lending C ontingent E xpenditure O verall Balance B alance on C om m itm ent Basis Including G rants Balance on C om m itm ent Basis E xcluding Grants T o ta l F inancing Foreign (net) Dome i i c (net) B a rt 215 14.8 £ 6.3 f 3.6 f 1 9 f 3 .
° r a r °.3 f 6.4 f 4.3 T I l f 215 15.3 [ 6 7 [ 3.6 [ 1 9 [ 3.0 [ 17 [ 0.3 [ 6.1 [ 3.7 [ 2.4 [ - • 0.3 f 0.1 [ (5.8) (7.9) s.8 r u t 3 .
6 f 2 .4 1 (3.6) r (7.4) 3.6 [ 0.7 [ 2.9 [ 2.5 r 215 14.6 6.2 3.4 2.3 2.6 2.4 0.2 6.6 3.8 19 • 0.2 (4.2) (6.7) 4.2 13 1 9 3.2 216 14.4 6.0 [ 3.2 [ 1 6 [ 1 5 [ 1 3 [ 0.2 [ 7.0 [ 3.8 [ 3.2 • 0.2 (3.9) (6.0) 3.9 [ 1 7 [ 1 2 _ 1 6 216 14.2 6.0 3.0 1 7 1 5 1 3 0.2 7.2 3.7 3.6 • 0.2 (3.2) (5.3) 3.2 1 8 1 4 1 1 Source: G O SL and IM F S ta ff estim ates and Projections Box 3.2.1: Assumptions Underlying Revenue and Expenditure Projections Corporate Tax: Projection o f C orporate tax is based on the expansion in econom ic activities; in particu lar the non-iron ore and n on-agricultural GDP.
The iron ore and agricu ltural sectors are excluded from the tax base because they are m ostly exem pt from paym en t o f corporate tax.

Personal Income Tax: PAYE taxes for the private sector are assum ed to grow in line w ith GDP, excluding the agriculture sector.

For G overnm ent em ployees, PAYE is based on the projected G overnm ent W age bill (excluding pensions, gratuities and social security paym ents) for the subsequent y ear and the related effective tax rate o f the current year.
T ax on R ental Incom e is assum ed to increase in line w ith nom inal GDP growth.

Domestic GST: projected to grow in line w ith the projected increase in dom estic consum ption.

E fficiency gains w ill arise from increase in au dit capacity and the introdu ction o f electronic cash registers.

18 Import GST: projected to increase in line w ith the increase in dutiable im port o f goods and services.
E fficiency gains w ill arise from the G overnm ent policy o f reducing duty and GST w aivers on im ports.

Import duties: Im port duty is forecast to increase in accordance w ith projected grow th in dutiable im ports.

E fficiency w ill arise from reduction o f duty w aivers on im ports.

Petroleum Excise duty: this is based on the projected increase in im ported volum es o f petroleum products and current excise duty rate as specified in the petroleum pricing formula.
Minerals royalties are based on the export values o f m inerals and the prescribed royalty rate.

Mineral Licenses are projected to grow in line w ith the grow th o f m ining sector in real term s. Revenue from TSA Agencies is assum ed to grow in line w ith econom ic activities (real GDP growth).

Royalty on Timber exports: based on projected volum e o f exports and the royalty rate.

R evenu e from O th er M D As (fees, levies, charges) w ill increase in line w ith real GDP growth.
Road User Charges and Vehicles Licenses: Projections o f Road U ser C harges (RUC) are based on volum e o f petroleum sales and Road U ser Fee specified in the Petroleum pricing form ula.

Wages and Salaries w ill be m aintained at 6.0 percent o f GDP in the m edium -term in line w ith G overnm ent's policy to ensure the sustainability o f the W age bill.

Goods and Services expenditure is projected to increase in line w ith changes in consum er prices.
Governm ent will also introduce several expenditure control m easures.

Su bsidies and Transfers are based on increase in econom ic activities.

Domestic Interest payments w ill be determ ined by the T B rates, w hich are expected to decline as dom estic financing o f low er bu dget deficits decreases w ith fiscal consolidation.

Domestic capital expenditure w ill increase in line w ith the expansion o f the econom y.
Public debt w ill stabilize as fiscal consolidation is sustained 3.3 Fiscal Policy Measures for the Medium-Term, 2020-2022.

In the m edium -term , G overnm ent w ill im plem ent the follow ing tax policy and adm inistrative reform s to achieve the targeted revenue-G D P ratio o f 16.4 percent by 2020 paving the w ay for reaching the am bitious target o f 20 percent o f GDP by 2023.
These m easures include: 19 (i) D eveloping a policy on duty and tax w aivers to rationalize the granting o f duty and tax waivers; (ii) C ontinue the im plem entation o f the liberalized form ula for dom estic petroleum pricing; (iii) A u tom ate tax processes and procedures through the introduction o f electronic cash registers for G ST adm inistration; Integrated Tax A dm inistration System and R evenu e R econciliation G ateway; (iv) Introduction o f E lectronic Single W in dow to stream line clearance o f goods at the Quay; (v) C arry out the re-registration o f businesses; intensify the on-going data m atching project by signing M O Us w ith key M D As for data sharing; (vi) C ontinue to broaden the coverage o f and im plem ent phase II o f the TSA; (vii) Im plem ent the new Extractive Industry Revenue A ct (2008) to all new M ining and Petroleu m projects and existing M ining Lease Agreem ents that com e for renewal or review; (viii) Intensify m onitoring and enforcem ent through stricter enforcem ent o f tax legislation and enhance intelligence and investigations; (ix) U ndertake specialized T ax audits and m ore field audits m aking use o f ID EAs licenses to uncover unreported taxable transactions; (x) Strengthen volu n tary com pliance by im plem enting an aggressive taxpayer sensitization and education program m e including the developm ent and implementation o f a taxpayer comm unication strategy, holding taxpayer workshops, pu blishing relevant taxpayer education m aterials, and im plem enting a N
 ational Taxpayer Day; (xi) U ndertake a rented property census in the m ajor cities o f the country and collaborate w ith the Freetow n City C ouncil (FCC) in their current rented property identification and valu ation in the Freetow n m unicipality to establish a reliable and com plete R ental incom e database and m ore revenues therefrom ; (xii) Im plem ent the D om estic T ax Preparer Schem e to aid reporting and form alization o f SM Es leading to increased revenue collection therefrom ; and (xiii) O perationalise the Excise stam p duty regim e to reduce sm uggling from im ported alcoholic and tobacco products and hence im prove collection through the m anned custom s routes.
20 Expenditure Management/control measures In the m edium -term , expenditure m anagem ent w ill focus on im proving the quality and efficiency o f public expenditure to create the fiscal space for the im plem entation o f G overnm ent's priority program m es such as the Free Q uality Education, im proving health services including the Free H ealth care Initiative and scaling up infrastructure investm ent.
To this end, G overnm ent w ill em bark on reform s to im prove the integrity o f the Payroll, im prove the quality and efficiency o f non-salary, non-interest recurrent and capital expenditures.

Total G overnm ent spending w ill be m aintained at 21.5 percent o f GDP in the m edium -term .

Managing the Government Wages Bill The strategies articulated in the Payroll Reform Strategy (2017-2019) and the PFM Reform Strategy (2018-2021) continue to guide the payroll reform efforts o f Governm ent.
Reform efforts have m ainly been geared tow ards im proving the integrity o f the payroll w hile trying to achieve a sustainable w age bill.
Som e o f the reform s im plem ented so far include the cleaning up o f N ASSIT and B B AN num bers; autom ation o f the payroll o f sub-vented agencies and public universities and teacher training colleges; rem oval from the payroll o f w orkers above the retirem ent age, nationw ide biom etric verification o f all public sector em ployees; and introducing Q uality Assu rance o f the Payroll at the A ccou n tan t-G eneral's D epartm ent by conducting regular pre-pay run checks.
These reform s have to som e extent im proved the integrity o f the payroll as w ell as its sustainability.

The G overnm ent w age has declined from 6.7 percent o f GDP in 2017 to 6.3 percent o f GDP in 2018.

The objective is to m aintain it at the sustainable level o f 6.0 percent o f GDP in the m edium to long term.
To achieve this, G overnm ent w ill continue to im plem ent m easures to consolidate the gains m ade so far w hile continuing to im prove the transparency, probity and sustainability o f the G overnm ent payroll as described below: Continue with Payroll Automation: Payroll autom ation has also increased the control and oversight o f the payroll num bers and im prove on the transparency o f the payroll.
Follow ing the autom ation o f the payroll o f sub-vented agencies, the M inistry o f Finance continues to autom ate parts o f the payroll that are currently being processed m anually.

Currently, the M inistry is in the process o f com pleting the autom ation o f the payroll for all public universities and teacher training colleges.

The next category o f the payroll that w ill be autom ated is that o f Foreign M issions.
Develop and Implement a Comprehensive Strategy for minimising Manual Voucher payments A b ou t 28 percent o f payroll paym ents are processed m anually instead o f going through the central CSM Payroll system .

W ith support from donors, an assessm ent o f the types o f paym ents that are processed m anually has been produced.
21 W hile the autom ation process continues, there is need for a strategic plan to determ ine w hen and how G overnm ent w ill discontinue m anual vou ch er paym ents or at the very least m inim ize it.

The M inistry o f Finance has sought technical assistance for the developm ent o f this strategy.

M inim ising m anual vou ch er paym ents w ill im prove com prehensiveness o f the payroll and also m ake it easier to ascertain the w age bill position at any time.
Thus, m aking it possible to take prom pt action to address anom alies.

No new employee will be added to the Payroll without a Valid National Identification (NI) Number Th is policy w as first introduced du rin g the process o f au tom ating the payroll o f the public universities and teacher training colleges.

This policy helped identify several anom alies on the payroll o f these institutions inclu ding dual em ploym ent.
Given the effectiveness o f this m easure, the M inistry intends to m ake this standard practice for not adding any new em ployee on the G overnm ent payroll w ithout a valid NASSIT, BBAN and NI num bers.

In the long-term , the objective is to use the N ational C ivil R egistration N um ber (in clu din g biom etric data) as the unique identifier for all public sector em ployees.
The M inistry is also w orking towards ending the practice o f m aking NASSIT contributions for em ployees in the A rm y and Police m anually.

In the interim , M oF is also exploring the possibility o f m atching biom etric data recently collected w ith N ASSIT biom etric records.

Date of Birth Clean-up exercise The A ccou ntant-G eneral's D epartm ent (A G D ) has started en gagin g all em ploying authorities on how to take forward a DOB clean-up exercise.
This is on the back o ff the findings o f the N C R A biom etric verification exercise, w here m ism atch betw een DOBs on the payroll and D O Bs em bedded in the N ASSIT N um bers o f em ployees.

Th u s far, 16,000 out o f about 33,000 em ployee records that were found to have DOB m ism atches have been cleaned-up.
Payment o f all public sector pensioners (prior to the establishment o f NASSIT) direct into their bank accounts The leadership o f the M inistry has given directives to the A ccou n tan t G eneral that pension paym ents to pensioners before the establishm ent o f NASSIT schem e to be made directly into their bank accounts.

Currently, N ASSIT m ake these paym ents to pensioners on b eh a lf o f G overnm ent and charges a fee.
In the interest o f im proving the transparency o f pension paym ents and to control the w age bill, direct paym ents will now be m ade to pension ers' bank accounts.
22 Proper deactivation o f payroll records when assignments are ended Investigations into the contributing factors o f dual em ploym ent also reveal that the system o f ending assignm ents needs to be strengthened for em ployees w ho leave the public service (retirem ents, suspensions, etc) or as they m ove from one category o f the payroll to another.
In this regard, system s and m anual controls are being put in place such as developing clear w orkflow s to be followed to update both the em ployee's assignm ent file (containing all the inform ation relating to the em ployee's jo b e.g.

position, pay scale, etc) and the em ployee personal file (containing personal inform ation o f the em ployee e.g.

D O B, address, etc) w hen ending an assignm ent.


Establishing the Wages and Compensation Commission Plans are at an advanced stage for the establishm ent o f a W ages and C om pensation C om m ission.

The B ill establishing the C om m ission has been drafted and the Pu blic S ector R eform U n it has com pleted nation-w ide consultations.

The W ages and C om pen sation C om m ission w ill take forward som e o f the reform efforts identified in the payroll strategy.
These include aligning the m ultiple pensions laws and harm onizing pay and rem uneration across the public sector.

Institutionlising Payroll Quality Assurance In recent m onths, the A ccou n tan t G eneral's D epartm ent has strengthened its payroll qu ality assurance function.

This includes condu cting regular pre-pay run checks on the payroll before it is finalized each m onth.
A s a w ay o f institutionilising the use o f the reports from the pre-pay run checks, the Financial Secretary has requested that the reports and the m ain findings are presented to senior m anagem ent to inform cash m anagem ent discussions on the w age bill.

Aligning Manpower and Budget Planning Processes D uring the preparation o f the 2019 B udget, progress w as m ade in capturing the m an pow er planning figures as best as possible.
Efforts w ill continue to build on this durin g the preparation o f the 2020.

Developing a follow-up Payroll Strategy It is no doubt that the current Payroll Strategy has been the blueprint for payroll reform s u n dertaken recently.

The Strategies proposed w ere for up on till 2019.

However, in order to continue to take a strategic and holistic approach to payroll reform s, the M inistry plans to have a follow up strategy.
The strategy w ill propose future reform m easures that are needed to address em erging payroll challenges.

Managing Goods and Services Expenditure To effectively m anage expenditures on goods and services, G overnm ent w ill continue to im prove public procurem ent by regularly publishing price norm s; update the public procu rem ent m anual; strictly adhere to the requirem ents for com petitive bidding.
In the m edium -term , G overnm ent w ill introduce electronic public procurem ent system and develop a national Strategy for Public Procurem ent.

23 A t the sam e time, G overnm ent w ill continue to strengthen com m itm ent control system s to m inim ize the accum ulation o f arrears; extend the coverage o f the IFM IS to the rem aining M DAs, establish active bu dget com m ittees in all M D As and strictly adhere to the provisions o f the Pubic F inancial M anagem ent Act, 2016.
Managing Domestic Capital expenditures To im prove the efficiency o f capital expenditure, G overnm ent w ill ensure that dom estically funded capital expenditures are negotiated in local currency to lim it the exchange rate risk.
N otin g the challenges faced by G overnm ent in its qu est to reduce the infrastructural deficit and build the necessary efficiency in the public investm ent process, technical assistance has been requested from the Fiscal A ffairs D epartm ent o f the International M onetary Fund (IMF) to condu ct a Public Investm ent M anagem ent A ssessm en t (PIM A ).
Th is assessm ent w ill highlight the strengths and w eaknesses o f our public investm ent system and proffer recom m endations for im proving public investm ent decision-m aking process.

In addition, G overnm ent is w orkin g to conclude and adopt the N ation al Public In vestm ent Policy to enhance the effective planning and efficient execution o f the public in vestm ent activities and guide capital expenditure rationalization.
G overnm ent has established the N ation al M onitoring and E valuation D epartm ent (NaMED) in the M inistry o f Planning and E conom ic D evelopm ent to m onitor progress in the im plem entation o f donor and G overnm ent funded projects.

The disbursem ent o f qu arterly bu dgetary allocations to projects w ill henceforth be linked to the subm ission o f progress m onitoring reports by NAM ED.
4.0 Medium-Term Expenditure Framework G overnm ent's expenditure priorities rem ain H u m an C apital D evelopm ent w ith a focus on Free Q u ality Education Program m e in the education sector; Free H ealth Care Initiative in the health sector and social protection services.
O th er G overnm ent priorities include econom ic diversification through increased investm ent in agriculture, fisheries the tourism sectors w ith increased private sector participation as w ell as scaling up infrastructure to im prove the com petitiveness o f the econom y to prom ote sustainable econom ic grow th and job creation.

This is reflected in the allocations for recurrent and dom estic capital expenditures.
Expenditure Ceilings for Non-Salary, Non interest Recurrent Expenditure, 2020­ 2022 24 Annex 1: NON SALARY, NON INTER EST RECURRENT BUDGETARY ALLOCATIONS FY2019 - 2020 In millions of Leones D e ta ils F y 2 0 1 9 B u d g e t L e 'm % o f Total N on In t/S a l R e c u rr E xp F y 2 0 2 0 B u d g e t % o f Total N on In t/S a l R e c u rr E xp F y2 021 In d ic a tiv e % o f T o ta l N on In t/S a l R e c u rr E xp F y 2 0 2 2 In d ic a tiv e % o f To tal N on In t/S a l R e c u rr E xp F Y 2 0 2 3 In d ic a tiv e L e 'm L e 'm L e 'm L e 'm 1 GENERAL SERVICES 4 2 2 ,3 4 7 .0 18 .9 % 5 3 0 ,2 8 9 .6 2 4 .0 % 6 7 9 ,9 1 5 .4 3 0 .9 % 8 7 4 ,9 1 5 .4 4 0 .0 % 9 4 3 ,5 6 0 .6 105 M in is try o f P o litic a l a n d P u b lic A ffa irs 106 O ffic e o f th e C h ie f M in is te r 2 ,1 2 1 .2 10 ,863 .1 107 M in is try o f Lo ca l G o v e rn m e n t & R u ra l D e v e lo p m e n t 14 ,916 .1 108 S ie rra L e o n e S m a ll A rm s C o m m is s io n 8 1 3 .4 0 .1 % 0 .3 % 0 .7 % 0 .0 % 2 ,2 2 7 .2 0 .1 % 2 ,4 5 0 .0 0 .1 % 2 ,6 9 4 .9 1 1 ,9 0 6 .2 0 .3 % 1 3 ,0 9 6 .9 0 .4 % 1 4 ,4 0 6 .6 1 8 ,0 5 5 .2 0 .8 % 1 9 ,8 6 0 .8 8 5 4 .0 0 .0 % 9 3 9 .4 0 .9 % 0 .0 % 2 1 ,8 4 6 .8 1 ,0 3 3 .4 110 O ffic e o f th e P re s id e n t 3 1 ,8 2 6 .4 1.5 % 3 4 ,5 7 9 .5 1 .6 % 3 8 ,0 3 7 .4 1.8 % 4 1 ,8 4 1 .1 112 O ffic e o f th e V ic e P re s id e n t 116 P a rlia m e n t 117 C a b in e t S e c re ta ria t 118 T h e J u d ic ia ry 121 A u d it S e rv ic e S ie rra L e o n e 122 H u m a n R e s o u rc e M a n a g e m e n t O ffic e
 123 P u b lic S e rv ic e C o m m is s io n 124 L a w O ffic e rs ' D e p a rtm e n t 125 L o ca l C o u rts 126 In d e p e n d e n t P o lic e C o m p la in ts B o a rd 1 5 ,6 3 8 .0 1 4 ,5 0 0 .0 2 ,3 0 1 .9 1 4 ,4 2 9 .9 6 ,5 6 7 .6 2 ,7 7 7 .3 2 ,2 95.1 1 2 ,0 4 8 .4 690.1 9 5 8 .5 127 M in is try o f P la n n in g a n d E c o n o m ic D e v e lo p m e n t 13,181.1 128 M in is try o f F o re ig n A ffa irs & In te rn a tio n a l C o -o p e ra tio n 4 3 ,7 5 2 .3 129 M in is try o f F in a n c e 130 N a
 tio n a l R e v e n u e A u th o rity (N R A ) 5 8 ,0 1 9 .7 9 8 ,0 0 0 .0 0 .7 % 0 .7 % 0 .1 % 0 .7 % 0 .3 % 0 .1 % 0 .1 % 0 .6 % 0 .0 % 0 .0 % 0 .6 % 2 .0 % 2 .7 % 4 .6 % 1 6 ,8 6 8 .0 1 5 ,2 2 5 .0 2 ,4 1 7 .0 0 .8 % 0 .7 % 0 .1 % 1 8 ,5 5 4 .7 0 .9 % 2 0 ,8 1 4 .2 1 6 ,7 4 7 .5 2 ,6 5 8 .7 0 .8 % 0 .1 % 1 8 ,4 2 2 .2 2 ,9 2 4 .6 1 5 ,1 5 1 .4 0 .7 % 1 6 ,6 6 6 .5 0 .8 % 18 ,333 .1 6 ,8 9 6 .0 2 ,9 1 6 .1 2 ,4 0 9 .9 1 2 ,6 5 0 .8 7 2 4 .6 1 ,0 0 6 .4 1 3 ,8 4 0 .2 0 .3 % 0 .1 % 0 .1 % 0 .6 % 0 .0 % 0 .0 % 0 .7 % 7 ,5 8 5 .5 3 ,2 0 7 .8 2 ,6 5 0 .9 0 .4 % 0 .2 % 0 .1 % 8 ,3 4 4 .1 3 ,5 2 8 .5 2 ,9 1 5 .9 1 3 ,9 1 5 .9 0 .7 % 1 5 ,3 0 7 .5 797.1 1 ,1 0 7 .0 1 5 ,2 2 4 .2 0 .0 % 0 .1 % 0 .7 % 8 7 6 .8 1 ,2 1 7 .7 1 6 ,7 4 6 .6 8 5 ,6 8 9 .5 4 .0 % 1 2 3 ,4 7 6 .2 5 .8 % 1 6 7 ,9 6 3 .4 7 .9 % 2 1 0 ,1 0 8 .1 6 0 ,9 2 0 .7 2 .9 % 6 7 ,0 1 2 .7 3 .1 % 7 3 ,7 1 4 .0 1 4 4 ,9 7 2 .6 6 .8 % 1 7 0 ,9 6 9 .2 8 .0 % 1 9 3 ,3 7 2 .4 131 R e v e n u e A p p e lla te B o a rd 653.1 0 .0 % 6 8 5 .7 1 3 2 A c c o u n ta n t G e n e ra l's D e p a rtm e n t 3 3 ,2 2 2 .7 1.6 % 3 4 ,8 8 3 .8 1 3 3 M in is try o f In fo rm a tio n a n d C o m m u n ic a tio n 1 3 4 N a tio n a l E le c to ra l C o m m is s io n (N E C ) 4 ,0 5 5 .5 1 8 ,0 0 0 .0 0 .2 % 0 .8 % 4 ,2 5 8 .3 1 8 ,9 0 0 .0 0 .0 % 1.6 % 0 .2 % 0 .9 % 7 5 4 .3 0 .0 % 8 2 9 .7 3 6 ,6 2 8 .0 1.7 % 3 7 ,2 9 0 .8 4 ,6 8 4 .1 0 .2 % 5 ,1 5 2 .5 7 8 ,4 1 3 .9 3 .7 % 1 7 8 ,4 1 3 .9 8 .4 % 1 8 7 ,3 3 4 .6 0 .1 % 0 .4 % 1.0% 0
 .0 % 2 .0 % 1.0% 0 .9 % 0 .1 % 0 .9 % 0 .4 % 0 .2 % 0 .1 % 0 .7 % 0 .0 % 0 .1 % 0 .8 % 2 ,8 2 9 .7 1 5 ,1 2 6 .9 2 2 ,9 3 9 .2 1,085.1 4 3 ,9 3 3 .2 2 1 ,8 5 5 .0 1 9 ,3 4 3 .3 3 ,0 7 0 .8 1 9 ,2 4 9 .8 8 ,7 6 1 .3 3 ,7 0 5 .0 3 ,0 6 1 .7 1 6 ,0 7 2 .8 9 2 0 .6 1 ,2 7 8 .6 1 7 ,5 8 3 .9 3 .5 % 9 .1 % 0 .0 % 1.8% 0 .2 % 7 7 ,3 9 9 .7 1 9 4 ,0 4 1 .0 9 1 2 .7 3 9 ,1 5 5 .3 5 ,4 1 0 .2 13 7 N a tio n a l C o m m is s io n fo r D e m o c ra c y 1 3 8 S ta tis tic s - S ie rra L e o n e 1 3 9 N a tio n a l C o
 m m is s io n fo r P riv a tis a tio n (N C P ) 14 0 M a s s M e d ia S e rv ic e s 141 G o v e rn m e n t P rin tin g D e p a rtm e n t 14 2 N a tio n a l P u b lic P r o c u re m e n t A u th o r ity (N P P A ) 1 4 3 J u s tic e a n d L e g a l S e rv ic e C o m m is s io n 1 4 4 H u m a n R ig h ts C o m m is s io n S ie rra L e o n e 1 4 5 R ig h ts to A c c e s s In fo rm a tio n C o m m is s io n 1 4 6 C o m p e n s a tio n a n d W a g e s C o m m is s io n 2 S E C U R IT Y S E R V IC E S 201 M in is try o f D e fe n c e 2 0 3 N a tio n a l C iv il R e g is tr a tio n A u th o r ity 2 0 5 M in is try o f In te rn a l A ffa ir s 2 0 6 S ie rra L e o n e P o lic e 8 5 3 .4 7 ,5 3 0 .4 2 ,0 3 2 .1 1 ,5 8 9 .0 3 ,0 5 0 .8 3 ,2 0 7 .5 1 6 4 .6 1 ,2 6 3 .3 1 ,0 2 4 .7 0 .0 0 .0 % 0 .4 % 0 .1 % 0 .1 % 0 .1 % 0 .2 % 0 .0 % 0 .1 % 0 .0 % 0 .0 % 2 7 8 ,1 3 9 .8 1 3 .1 % 9 6 ,0 1 8 .1 4 .5 % 2 ,4 4 2 .8 1 ,2 2 0 .7 0 .1 % 0 .1 % 8 7 ,7 2 2 .6 4 .1 % 2 0 7 S ie rra L e o n e C o r r e c tio n a l S e rv ic e s 5 2 ,3 6 9 .7 2 .5 % 2 0 8 N a tio n a l F ire A u th o r ity 1 7 ,7 6 0 .9 0 .8 % 2 0 9 C e n tra l In te llig e n c e & S e c u r ity U n it 2 1 0 O ffic e o f N a tio n a l S e c u r ity 2 1 2 N a tio n a l D ru g s L a w E n fo r c e m e n t A g e n c y 3 S O C IA L S E R V IC E S 6 ,2 7 7 .6 8 ,4 9 0 .3 5 9 2 .1 0 .3 % 0 .4 % 0 .0 % 6 0 9 ,7 1 1 .9 1 8 .0 % 3 0 0 M in is try o f T e c h n ic a l a n d H ig h e r E d u c a tio n 2 1 5 ,7 9 7 .7 1 0 .1 % 301 M
 in is try o f B a s ic a n d S e c o n d a r y E d u c a tio n 1 3 7 ,6 3 7 .2 6 .5 % 3 0 2 M in is try o f S p o rts 9 ,7 8 1 .6 0 .5 % 3 0 3 M in is try o f T o u ris m a n d C u ltu ra l A ffa irs 1 0 ,0 6 3 .1 0 .5 % 3 0 4 M in is try o f H e a lth a n d S a n ita tio n 7 9 ,7 3 1 .3 3 .7 % 3 0 5 M in is try o f S o c ia l W e lfa re , G e n d e r & C h ild r e n 's A ffa irs 1 6 ,1 6 7 .6 0 .8 % 3 0 6 M in is try o f L a n d s , H o u s in g a n d th e E n v iro n m e n t 5 ,9 9 0 .2 0 .3 % 8 9 6 .1 7
 ,9 0 6 .9 2 ,1 3 3 .7 1 ,6 6 8 .5 3 ,2 0 3 .3 3 ,3 6 7 .9 1 7 2 .8 1 ,3 2 6 .5 1 ,0 7 5 .9 5 0 0 .0 0 .0 % 0 .4 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .0 % 0 .1 % 0 .1 % 0 .0 % 9 8 5 .7 8 ,6 9 7 .6 2 ,3 4 7 .1 1 ,8 3 5 .3 3 ,5 2 3 .6 3 ,7 0 4 .7 19 0 .1 1 ,4 5 9 .1 1 ,1 8 3 .5 5 5 0 .0 0 .0 % 0 .4 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .0 % 0 .1 % 0 .1 % 0 .0 % 1 ,0 8 4 .3 9 ,5 6 7 .4 2 ,5 8 1 .8 2 ,0 1 8 .9 3 ,8 7 6 .0 4 ,0 7 5 .1 2 0 9 .1 1 ,6 0 5 .0 1 ,3 0 1 .9 6 0 5 .0 0 .1 % 0 .4 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .0 % 0 .1 % 0 .1 % 0 .0 % 1 ,1 3 8 .5 1 0 ,0 4 5 .7 2 ,7 1 0 .9 2 ,2 2 0 .8 4 ,0 6 9 .8 4 ,2 7 8 .9 2 3 0 .0 1 ,6 8 5 .3 1 ,3 6 7 .0 6 3 5 .3 2 9 2 ,0 4 6 .7 1 3 .7 % 3 2 1 ,2 5 1 .4 1 5 .1 % 3 2 4 ,3 1 4 .0 1 5 .2 % 3 2 5 ,4 5 6 .9 1 0 0 ,8 1 9 .0 4 .7 % 1 1 0 ,9 0 0 .9 5 .2 % 1 1 0 ,4 4 6 .0 5 .2 % 1 1 0 ,4 5 7 .0 2 ,5 6 5 .0 1 ,2 8 1 .7 0 .1 % 0 .1 % 2 ,8 2 1 .5 0 .1 % 2 ,9 6 2 .5 1 ,4 0 9 .9 0 .1 % 1 ,4 8 0 .4 0 .1 % 0 .1 % 3 ,1 1 0 .7 1 ,5 5 4 .4 9 2 ,1 0 8 .8 4 .3 % 1 0 1 ,3 1 9 .7 4 .8 % 1 0 1 ,3 8 5 .6 4 .8 % 1 0 1 ,3 9 5 .8 5 4 ,9 8 8 .2 2 .6 % 6 0 ,4 8 7 .0 2 .8 % 6 1 ,5 1 1 .4 2 .9 % 6 1 ,5 1 7 .5 1 8 ,6 4 9 .0 0 .9 % 2 0 ,5 1 3 .9 1 .0 % 2 1 ,5 3 9 .6 1 .0 % 2 1 ,5 4 1 .7 6 ,5 9 1 .5 8 ,9 1 4 .8 6 2 1 .8 0 .3 % 0 .4 % 0 .0 % 7 ,2 5 0 .6 9 ,8 0 6 .3 6 8 3 .9 0 .3 % 0 .5 % 0 .0 % 7 ,6 1 3 .1 1 0 ,2 9 6 .6 7 1 8 .1 0 .4 % 0 .5 % 0 .0 % 7 ,8 4 1 .5 1 0 ,6 0 5 .5 7 5 4 .0 5 8 3 ,1 9 8 .6 2 0 .2 % 6 1 7 ,8 1 4 .6 2 1 .4 % 6 9 4 ,3 6 6 .7 2 4 .2 % 7 3 9 ,7 0
 8 .4 1 4 1 ,9 1 3 4 6 .7 % 1 4 9 ,1 6 2 .5 7 .0 % 1 6 4 ,0 7 8 .8 7 .7 % 1 7 9 ,6 6 5 .3 1 6 1 ,3 0 6 .2 7 .6 % 1 7 1 ,1 2 4 .9 8 .0 % 2 0 2 ,0 4 1 .2 9 .5 % 2 1 2 ,6 9 9 .2 1 0 ,2 7 0 .6 0 .5 % 1 1 ,2 9 7 .7 0 .5 % 1 2 ,4 2 7 .5 1 0 ,5 6 6 .2 0 .5 % 1 1 ,6 2 2 .8 0 .5 % 1 2 ,7 8 5 .1 0 .6 % 0 .6 % 1 3 ,0 4 8 .8 1 3 ,4 2 4 .4 8 7 ,2 8 7 .1 4 .1 % 9 5 ,4 6 5 .8 4 .5 % 1 0 5 ,0 1 2 .4 4 .9 % 1 1 0 ,1 3 5 .6 1 6 ,9 7 6 .0 0 .8 % 1 8 ,6 7 3 .6 0 .9 % 2 0 ,5 4 0 .9 1 .0 % 2 1 ,9 4 1 .4 6 ,2 8 9 .8 0 .3 % 6 ,9 1
 8 .7 0 .3 % 7 ,6 1 0 .6 0 .4 % 8 ,3 7 1 .7 3 0 7 N a tio n a l M e d ic a l S u p p lie s A g e n c y 1 0 2 ,1 0 0 .0 4 .8 % 3 0 8 N a tio n a l C o m m is s io n fo r S o c ia l A c tio n 3 0 9 D e n ta l a n d M e d ic a l B o a rd 311 H e a lth S e rv ic e C o m m is s io n 3 1 2 T e a c h in g S e r v ic e C o m m is s io n 3 1 3 N a tio n a l Y o u th S e rv ic e 3 1 4 N a tio n a l H IV a n d A ID S C o m m is s io n 3 1 5 T e a c h in g H o s p ita ls C o m p le x A d m in is tra tio n 3 1 6 C iv il S e rv ic e T r a in in g C o lle g e 3 4 5 P h a rm a c y B o a rd S e rv ic e s 4 ECONOMIC S E R V IC E S 1 ,6 1 2 .3 3 9 1 .1 1 ,1 9 0 .9 1 ,7 5 5 .9 3 ,1 6 7 .9 3 ,5 0 8 .0 3 ,6 2 7 .3 9 5 4 .6 6 ,3 7 9 .2 0 .1 % 0 .0 % 0 .1 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .0 % 0 .3 % 5 9 6 ,6 8 9 .6 2 7 .5 % 401 M in is try o f A g ric u ltu r e a n d F o re s try 1 0 1 ,4 2 3 .0 4 .8 % 4 0 2 M in is try o f F is h e rie s a n d M a rin e R e s o u rc e s 4 0 3 M in is try o f M in e s a n d M in e ra l R e s o u rc e s 4 0 4 M in is try o f T r a n s p o rt a n d A v ia tio n 4 0 5 M in is try o f T o u ris m a n d C u ltu ra l A ffa irs 2 6 ,8 0 1 .2 5 ,4 7 1 .3 4 2 ,8 0 6 .8 2 5 ,0 3 2 .1 1 .3 % 0 .3 % 2 .0 % 1 .2 % 4 0 6 M in is try o f E n e rg y 1 0 4 ,9 4 1 .9 4 .9 % 4 0 7 M in is try o f L a b o u r a n d S o c ia l S e c u r ity 4 0 8 M in is try o f W o r k s a n d P u b lic A s s e ts 4 0 9 M in is try o f T ra d e a n d In d u s try 4 1 0 N a tio n a l P ro te
 c te d A re a A u th o r ity 411 R o a d M a in te n a n c e F u n d 7 ,1 9 1 .2 1 2 ,0 0 0 .6 1 2 ,9 4 8 .3 1 ,4 3 6 .7 1 2 5 ,4 4 5 .3 4 1 2 N a tio n a l T e le c o m m u n ic a tio n s C o m m is s io n (N A T C O M ) 5 9 ,3 9 7 .3 4 1 3 S ie rra L e o n e E le c tric ity a n d W a te r R e g u la to ry C o m m is s io n 1 ,2 3 0 .4 4 1 4 M in is try o f W a te r R e s o u rc e s 4 1 5 S ie rra L e o n e M a ritim e A d m in is tr a tio n (S L M A ) 4 1 6 C iv il A v ia tio n A u th o rity 4 1 7 N u c
 le a r S a fe ty a n d R a d ia tio n P ro te c tio n A u th o rity 4 1 8 S ie rra L e o n e A g ric u ltu ra l R e s e a rc h In s titu te (S L A R I) 1 3 ,2 5 5 .0 1 7 ,2 4 4 .9 1 ,8 3 0 .8 3 ,2 9 4 .0 5 ,1 5 2 .6 0 .3 % 0 .6 % 0 .6 % 0 .1 % 5 .9 % 2 .8 % 0 .1 % 0 .6 % 0 .8 % 0 .1 % 0 .2 % 0 .2 % 1 1 4 ,2 0 5 .1 5 .4 % 1 1 5 ,7 2 5 .9 5 .4 % 1 2 7 ,2 9 8 .5 6 .0 % 1 3 4 ,5 8 3 .5 1 ,6 9 2 .9 4 1 0 .7 1 ,2 5 0 .4 1 ,8 4 3 .7 3 ,3 2 6 .3 3 ,6 8 3 .4 3 ,8 0 8 .7 1 ,0 0 2 .3 7 ,0 1 7 .1 0 .1 % 0 .0 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .2 % 0 .0 % 0 .3 % 1 ,8 6 2 .2 4 5 1 .7 1 ,3 7 5 .5 2 ,0 2 8 .1 3 ,6 5 9 .0 4 ,0 5 1 .7 4 ,1 8 9 .5 1 ,1 0 2 .5 7 ,7 1 8 .8 0 .1 % 0 .0 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .2 % 0 .1 % 0 .4 % 2 ,0 4 8 .4 4 9 6 .9 2 ,4 7 9 .8 2 ,2 3 0 .9 4 ,0 2 4 .9 4 ,4 5 6 .9 4 ,6 0 8 .5 1 ,2 1 2 .8 8 ,4 9 0 .7 0 .1 % 0 .0 % 0 .1 % 0 .1 % 0 .2 % 0 .2 % 0 .2 % 0 .1 % 0 .4 % 2 ,1 5 0 .9 5 4 6 .6 2 ,7 2 7 .8 2 ,4 5 4 .0 4 ,2 2 6 .1 4 ,9 0 2 .6 5 ,0 6 9 .4 1 ,2 7 3 .4 9 ,3 3 9 .8 7 7 8 ,7 0 2 .7 3 6 .0 % 9 6 1 ,2 2 9 .2 4 4 .4 % 1 ,0 5 2 ,8 1 2 .9 4 8 .6 % 1 ,1 9 2 ,5 7 7 .2 1 0 7 ,2 4 9 .7 5 .0 % 1 0 9 ,4 5 7 .3 5 .1 % 1 2 0 ,4 0 3 .0 5 .7 % 1 2 6 ,4 2 3 .1 2 8 ,1 4 1 .3 1 .3 % 3 0 ,9 5 5 .4 1 .5 % 3 4 ,0 5 1 .0 1 .6 % 3 7 ,4 5 6 .1 5 ,7 4 4 .9 4 4 ,9 4 7 .1 0 .3 % 2 .1 % 6 ,3 1 9 .4 4 9 ,4 4 1 .9 0 .3 % 2 .3 % 6 ,9 5 1 .3 3 4 ,3 8 6 .0 2 6 ,2 8 3 .7 1 .2 % 2 8 ,9 1 2 .1 1 .4 % 3 1 ,8 0 3 .3 0 .3 % 1 .6 % 1 .5 % 7 ,2 9 8 .9 3 6 ,1 0 5 .3 3 3 ,3 9 3 .4 2 5 4 ,8 1
 0 .9 1 2 .0 % 2 9 0 ,2 7 6 .8 1 3 .6 % 3 1 9 ,3 0 4 .5 1 5 .0 % 3 5 0 ,9 2 1 .0 7 ,5 5 0 .8 1 2 ,6 0 0 .6 0 .4 % 0 .6 % 8 ,3 0 5 .9 0 .4 % 9 ,1 3 6 .5 1 3 ,8 6 0 .7 0 .7 % 1 5 ,2 4 6 .7 1 3 ,7 6 8 .0 0 .6 % 1 5 ,1 4 4 .8 0 .7 % 1 6 ,6 5 9 .3 2 ,1 0 8 .5 0 .1 % 2 ,3 1 9 .4 0 .1 % 2 ,5 5 1 .3 0 .4 % 0 .7 % 0 .8 % 0 .1 % 9 ,5 9 3 .3 1 6 ,0 0 9 .1 1 7 ,4 9 2 .2 2 ,6 7 8 .9 1 3 3 ,0 5 6 .9 6 .2 % 2 4 1 ,5 7 7 .3 1 1 .3 % 2 9 0 ,1 9 5 .8 1 3 .6 % 3 7 7 ,9 7 5 .4 6 5 ,3 3 7 .0 3 .1 % 7 4 ,4 8 4 .2 3 .5 % 7 5 ,9 3
 2 .6 1 ,2 9 2 .0 0 .1 % 1 ,4 21.1 0 .1 % 1 ,5 6 3 .3 1 3 ,3 6 2 .6 0 .6 % 1 4 ,6 9 8 .9 0 .7 % 1 6 ,1 6 8 .8 3 .6 % 0 .1 % 0 .8 % 7 6 ,2 2 9 .3 1 ,6 4 1 .4 1 6 ,9 7 7 .2 1 8 ,9 6 9 .3 0 .9 % 2 1 ,6 2 5 .0 1 .0 % 2 0 ,7 8 7 .6 1 .0 % 2 1 ,8 2 6 .9 2 ,0 1 3 .9 3 ,4 5 8 .7 5 ,4 1 0 .2 0 .1 % 0 .2 % 0 .3 % 2 ,2 9 5 .8 5 ,1 8 8 .0 5 ,9 5 1 .3 0 .1 % 0 .2 % 0 .3 % 2 ,5 2 5 .4 5 ,7 0 6 .8 6 ,5 4 6 .4 0 .1 % 0 .3 % 0 .3 % 2 ,6 5 1 .7 5 ,9 9 2 .1 6 ,8 7 3 .7 4 1 9 L o c a l C o n te n t A g e n c y 7 1 8 .9 0 .0 % 4 2 0 S ie rra L e o n e E n v iro n m e n t P ro te c tio n A g e n c y (S L E P A ) 1 5 ,1 5 4 .2 0 .7 % 421 S m a ll a n d M e d iu m E n te rp ris e s D e v e lo p m e n t A g e n c y 2 ,0 2 7 .3 0 .1 % (S M E D A ) 4 2 2 S ie rra L e o n e M e te o ro lo g ic a l A g e n c y 1 ,1 8 2 .4 0 .1 % 4 2 3 S ie rra L e o n e P e tro le u m R e g u la tio n A g e n c y 3 ,8 5 7 .1 0 .2 % 4 2 4 S ie rra L e o n e P e tro le u m D ire c to ra te 6 ,8 4 6 .3 0 .3 % 5 6 7 M IS C E L L A N E O U S S E R V IC E S M is c e lla n e o u s S e rv ic e s 0.0 0.0 0 .0 % 0 .0 % C O N T IN G E N C Y E X P E N D IT U R E 3 0 ,1 3 2 .6 1 .4 % T R A N S F E R S TO L O C A L C O U N C IL S 1 9 1 ,8 9 0 .4 9 .0 % G ra n ts fo r G e n e ra l A d m in is tr a tiv e E x p e n s e s 7 ,6 4 9 .9 0 .4 % G ra n ts fo r D e v o lv e d F u n c tio n s 1 8 4 ,2 4 0 .5 8 .7 % T o ta l N o n S a la ry , N o n In te re s t R e c u r re n t 2 ,1 2 8 ,9 1 1 .2 1 0 0 .0 % E x p e n d itu re P ro v
 is io n s G o o d s & S e rv ic e s S o c ia l a n d E c o n o m ic 1 ,3 7 7 ,6 6 7 .7 6 4 .7 % 6 9 5 ,1 8 0 .9 3 2 .7 % S u b s id ie s a n d T ra n s fe rs 7 2 1 ,1 1 1 .0 3 3 .9 % T ra n s fe rs to L o c a l C o u n c ils 1 9 1 ,8 9 0 .4 9 .0 % G ra n ts to T e rtia ry E d u c a tio n a l In s titu tio n s 1 7 8 ,0 0 0 .0 8 .4 % T r a n s fe r t o R o a d M a in te n a n c e F u n d 1 2 5 ,4 4 5 .3 5 .9 % T ra n s fe rs to O th e r A g e n c ie s 1 0 7 ,7 7 5 .3 5 .1 % E n e r g y S u b s id ie s (ln c
 l. F u e l) 1 0 0 ,0 0 0 .0 4 .7 % F u e l F o r E G T C 1 8 ,0 0 0 .0 0 .8 % E le c tio n s a n d D e m o c ra tis a tio n - 1 8 ,0 0 0 .0 0 .8 % C o n tin g e n c y E x p e n d itu re 3 0 ,1 3 2 .6 1 .4 % 7 8 3 .1 0 .0 % 8 6 1 .4 0 .0 % 9 4 7 .5 0 .0 % 9 9 4 .9 1 6 ,6 6 9 .6 0 .8 % 1 9 ,0 0 3 .3 0 .9 % 2 0 ,9 0 3 .7 1 .0 % 2 1 ,9 4 8 .9 2 ,1 2 8 .6 0 .1 % 2 ,3 4 1 .5 0 .1 % 2 ,5 7 5 .6 0 .1 % 2 ,7 0 4 .4 1 ,2 4 1 .5 0 .1 % 1 ,3 6 5 .6 0 .1 % 1 ,5 0 2 .2 0 .1 % 1 ,5 7 7 .3 4 ,2 4 2 .8 0 .2 % 4 ,8 3 6 .8 0 .2 % 5 ,3 2 0 .5 0 .2 % 5 ,5 8 6 .5 7 ,5 3 1 .0 0 .4 % 1 0 ,5 8 5 .3 0 .5 % 1 1 ,6 4 3 .8 0 .5 % 1 2 ,2 2 6 .0 4 ,5 0 3 .5 0 .2 % 4 ,9 5 3 .9 0 .2 % 4 ,5 0 3 .5 0 .2 % 4 ,9 5 3 .9 0 .2 % 0.0 0.0 0 .0 % 0 .0 % 0 .0 0.0 9 0 ,0 0 0 .0 4 .2 % 9 0 ,0 0 0 .0 4 .2 % 9 0 ,0 0 0 .0 4 .2 % 1 0 0 ,0 0 0 .0 3 4 9 ,0 6 6 .8 1 6 .4 % 3 9 7 ,9 3 6 .1 1 8 .7 % 4 3 7 ,0 3 2 .9 2 0 .5 % 5 1 8 ,4 0 4 .4 4 3 ,2 1 4 .9 2 .0 % 4 9 ,2 6 5 .0 2 .3 % 5 4 ,1 9 1 .5 2 .5 % 5 9 ,6 1 0 .6 3 0 5 ,8 5 1 .9 1 4 .4 % 3 4 8 ,6 7 1 .2 1 6 .4 % 3 8 2 ,8 4 1 .5 1 8 .0 % 4 5 8 ,7 9 3 .8 2 ,6 2 7 ,8 0 8 .0 1 0 0 .0 % 3 ,0 7 3 ,1 0 0 .6 1 0 0 .0 % 3 ,4 7 3 ,4 4 2 .0 1 0 0 .0 % 3 ,8 1 9 ,7 0 7 .4 1 ,5 5 9 ,3 6 6 .8 5 9 .3 % 1 ,7 2 8 ,4 3 9 .0 5 6 .2 % 1 ,8 9 6 ,3 9 1 .5 5 4 .6 % 2 ,0 0 7 ,0 2 9 .4 7 5 1 ,4 2 6 .8 2 8 .6 % 8 0 0 ,7 3 2 .2 2 6 .1 % 8 7 5 ,5 7 6 .1 2 5 .2 % 92 5 ,3 4 6 .6 9 7 8 ,4 4 1 .2 3 7 .2 % 1 ,2 5 4 ,6 6 1 .6 4 0 .8 % 1 ,4 8 7 ,0 5 0 .4 4 2 .8 % 1 ,7 1 2 ,6 7 8 .0 3 4 9 ,0 6 6 .8 1
 3 .3 % 3 9 7 ,9 3 6 .1 1 2 .9 % 4 3 7 ,0 3 2 .9 1 2 .6 % 5 1 8 ,4 0 4 .4 1 0 2 ,2 2 5 .8 3 .9 % 1 0 7 ,4 4 7 .9 3 .5 % 1 1 8 ,1 9 2 .7 3 .4 % 1 3 0 ,0 1 1 .9 1 3 3 ,0 5 6 .9 5 .1 % 2 4 1 ,5 7 7 .3 7 .9 % 2 9 0 ,1 9 5 .8 8 .4 % 3 7 7 ,9 7 5 .4 1 2 5 ,5 6 9 .9 4 .8 % 1 4 4 ,7 1 7 .5 4 .7 % 1 5 0 ,1 8 9 .2 4 .3 % 1 5 4 ,6 2 3 .2 2 4 9 ,6 2 1 .9 9 .5 % 2 8 4 ,5 6 9 .0 9 .3 % 3 1 3 ,0 2 5 .9 9 .0 % 3 4 4 ,3 2 8 .4 4 6 ,8 0 0 .0 1 .8 % 5 3 ,3 5 2 .0 1 .7 % 5 8 ,6 8 7 .2 1 .7 % 6 4 ,5 5 5 .9 1 8 ,9 0 0 .0 0 .7 %
 7 8 ,4 1 3 .9 2 .6 % 1 7 8 ,4 1 3 .9 5 .1 % 1 8 7 ,3 3 4 .6 9 0 ,0 0 0 .0 3 .4 % 9 0 ,0 0 0 .0 2 .9 % 9 0 ,0 0 0 .0 2 .6 % 1 0 0 ,0 0 0 .0 Public Investment Programme, 2020-2022 Domestic Capital Projections for Fiscal Strategy Statement (FSS): 2020to 2022 Medium Term National Development PI an Cluster/Ministries, Department and Agency (MDAs) Policy Cluster/Year GRAND TOTAL ClusterOne (1): Human Capital Development Free Q ua lity Basic and Senior Secondary Education S tre n g th e n in g T e rtia ry and H igher Education Health Care Im p ro ve m e n t, Hygience and S anitation Social P rotection Lands and Housing Cl uste r TWo (2): Dh/erslfylng the Economy and Promotl ng G row Im p ro vin g P ro d u ctivity and C om m ercialization o f A gricutural Im p ro vin g P ro d u ctivity and Sustainable M anagem ent o f Fish R e vita lizin g th e Tourism Sector M a n u fa c tu im g a n d Services Cluster Three (3): Infrastructure and Economic Competltltlvene Energy Transform ing T ra nspo rtation System Im p ro vin g Roads and P ublic Structures Im p ro vin g W a ter Infrastructure System In fo rm a tio n and Com m unication Technology Fostering Private S ecto rG row th and M anufacturing Cluster Four (4)Governance and Accontablllty for Results P olitical D e ve lop m e n t fo r N ational Cohesion Fighting C orruption and Illic it Financial Flows S trengthening Public Financial M anagem ent S trengthening A u d it Services P ro m o ting Inclusive and Accountable Justice In
 s titu tio n s S trengthening Public Service D elivery S trengthening D ecentralization, Local Governance and Rural S trenthening Security In s titu tio n s S trengthening External R elations fo r Inte g ra tion ClusterFIve (5); Empowering Women, Children and Personswl M in is try o f Social W e lfa re , Gender and C hildren A ffairs ClusterSIx(6):Youth Employment, Sportsand Migration Youth E ntrepre ne ursh ip (E m ploym ent and E m pow erm ent) ClusterSeven (7): Addressing Vulnerability and Building
 Reslllc B uilding N ational E nvironm ental Resilence Forestry M anagem ent and W etland Conservation Im p ro vin g Diasater M anagem ent Governance Cluster Eight (8): Plan Implementation M in stry o f Planning and Economic D evelopm ent S trengthening Statistics Systems GRAND TOTAL 1,267,000 1,632,000 2,054,000 29 The Public Investm ent Program m e for the period 2020 to 2022 is draw n from the M edium -Term N ational D evelopm ent Plan (2019 - 2023).
The dom estic capital budget com ponent o f the Public Investm ent Program m e com prised o f projects and program m es w ithin the eight policy clusters defined in the M edium Term N ational D evelopm ent Plan: (i) H um an C apital D evelopm ent, (ii) D iversifying the Econom y and Prom oting Grow th, (iii) In frastru ctu re and E conom ic C om petitiven ess, (iv) G overn an ce and A ccou n ta b ility for R esu lts, (v) E m pow erin g W om en , C hildren, and Person s w ith Disability, (vi) You th Em ploym ent, Sports and M igration; (vii) Addressing Vulnerability and B u ildin g Resilience; and (viii) Plan Im plem entation.
T h e p rio rity o f G o ve rn m en t is E d u c a tio n for D e v e lo p m e n t u n d e r the H u m a n D evelopm ent Cluster, w hich is the flagship project for the M edium Term under the New Direction.

The em phasis is on program m es and projects that support Free Quality Education.

O ther priorities include the provision o f health care and critical social protection services.
T his is follow ed by projects and program m es geared tow ards diversifying the econom y and prom oting sustainable econom ic growth; scaling up infrastructural developm ent to im prove the com petitiveness o f the econom y as w ell as prom oting good governance.
The allocation o f dom estic capital expenditure allocation is based on the follow ing criteria: (i) projects and program m es m ust be aligned to the aspirations o f the Medium - Term N ational D evelopm ent Plan w ith em phasis on hum an capital developm ent; (ii) rationalized ongoing projects and program m es that have gone through the technical a u d its (w h ere a p p lic a b le) an d for w h ic h fu n d s are a v a ila b le ; (iii) p ro je c t and program m es that are critical to the statutory functioning o f the M inistry, D epartm ent or A gen cy w ith official approval; and (iv) reference m ade to the previous year allocation o f the dom estic capital.
5.

Fiscal Risk Statement Given the adverse im pact o f fiscal risks to budget execution and its threat to fiscal and debt sustainability, G overnm ent has established the D epartm ent o f Fiscal R isk M anagem ent and Fiduciary O versight o f State-ow ned Enterprises in the M inistry o f Finance.
This departm ent has been m andated to produce regular report on fiscal risks, identifying specific shocks or pressures that could push the public finances aw ay from m edium -term forecasts or threaten fiscal sustainability over the longer term.

The report takes a broad view o f fiscal risks, ranging from m acroeconom ic and fin ancial sector risks to specific risks su ch as those em an atin g from con tin gen t liabilities, state-ow ned enterprises, policy risks and natural disasters.
5.1 Macroeconomic Risks M acroeconom ic shocks can be positive or negative in nature, and arise from both external and dom estic sources.

The em phasis however, is on the negative shocks, w h ich could derail the im plem entation o f the budget and the achievem ent o f the fiscal objectives specified in this FSS.
Low er-than expected econom ic growth, adverse term s o f trade characterized by an increase in the price o f our k ey im ports (fuel and rice) and or a fall in the price o f our k ey export com m odities such as iron ore; high inflation and u n expected m ovem ent in interest and exchange rates are the m ost im portant m acroeconom ic risks that could prevent the attainm ent o f fiscal objectives specified in the Fiscal Strategy Statem ent.
30 Lower-than-projected GDP Growth Sierra L e o n e ’s econom ic grow th has been volatile and in m ost cases low er-than projected due to its reliance on m ining.

Low econom ic grow th could result to the contraction o f the tax base and hence, low er revenue collection.

This w ill com plicate bu dget execution as expenditures w ould have to be cut dow n w ith adverse im pact on service delivery.
I f expenditures are not adjusted correspondingly, the budget deficit w ill w iden leading to higher dom estic borrow ing and increased debt.

Fall in the International price o f Iron Ore Sierra Leone is highly dependent on the international price o f its m ajor com m odity exports, particularly iron ore, for growth, revenue and foreign exchange earnings.
Low er iron ore prices w ould have negative im pacts on the econom y in general and the budget in particular, although the exact im pact w ould depend on the extent and du ration o f an y fall.

Th e in tern ation al iron ore price is in creasin gly sensitive to changes in dem and from China, w hich has seen exceptionally strong dem and for construction and this had pushed the international price for iron ore and coal w ell above historical levels.
A slow dow n in the C hinese econom y or construction sector m ay lead to a sharp fall in the price o f iron ore.

This in turn w ould lead to slow er grow th in exports and GDP, through low er m ining activity.

Th is w ould have a cum ulative negative im pact on dom estic revenue collection as royalty paym ents, personal incom e tax, corporate tax from m ining contractors w ould drop.
A t the sam e time, the low level o f exports w ould reduce the supply o f foreign exchange in the econom y, w hich will trigger depreciation o f the Leone w ith attendant inflationary pressures.

The resulting increase in consu m er prices w ould increase the cost o f goods and services purchased by G overnm ent.
U n der this scenario, the budget w ill be adversely affected through w eaker revenues and increased expenditures, m aking it difficult to achieve the fiscal objectives specified in section II o f the FSS.

The low er iron ore prices during 2015, 2017 and 2018 is an exam ple o f this scenario, w h ich saw iron ore production shutting dow n resulting in slow GDP growth, low er revenu es and em ploym ent as w ell as continuous depreciation in the exchange rate.
Higher international price o f Petroleum Products A n increase in the international price o f fuel w ill increase the dem and for foreign exchange as fuel im ports account for a significant proportion o f Sierra Leone im port bill, second only to food im ports.

Given the lim ited supply o f foreign exchange, the Leone w ill depreciate resulting in higher inflationary pressures.
T his in turn will increase consum er prices given the strong correlation betw een fuel prices and the price o f other goods and services.

H igher fuel prices w ill also increase G overnm ent e x p en d itu re as G o ve rn m en t is a m a jor co n s u m er o f fu el.

H ig h e r G o vern m en t expenditures w ill lead to a higher budget deficit.

31 Exchange Rate Depreciation and High Inflation A s a sm all open econom y, Sierra Leone has lim ited influence on its exchange rate.
The exchange rate is influenced not only by developm ents in the dom estic econom y, but also by international developm ents over w hich the country has little or no control.

The exchange rate o f the Leone to the US D ollar and other international currencies has depreciated sharply in recent m onths due m ainly to the low level o f exports as w ell as speculative behavior by the business com m unity.
Sierra Leone has huge stock o f external public debt, estim ated at U S$ 1.57 billion at end D ecem ber 2018 all o f w h ich are denom inated in foreign currencies, m ainly United States dollar.

The depreciation o f the Leone w ould increase debt service paym ents w ith an adverse effect on the budget.

In addition, the depreciation o f the exchange rate can lead to increase in the prices o f im ported goods, w hich m ay be o f concern especially for som e com m odities such as rice and fuel.
G overnm ent purchases a large proportion o f these goods (rice for the security forces and fuel for all M D A s) and also u n dertakes several infrastructure projects w ith h igh im port content.

U n der this scenario, the d epreciation in the exchange rate w ould increase G overnm ent expenditure on goods and services and give rise to cost overruns on infrastructure projects, w hich in turn w ould w iden the budget deficit or lead to the accum ulation o f arrears.
The increase in interest paym ent, dom estic capital spending and goods and services expenditure will w orsen the budget deficit.

H ow ever, the depreciation o f the exchange rate m ay have a positive im pact on public finances through an increase in the C IF value o f im ports on w hich im port and excise du ties are levied.

M oreover, som e o f the revenue stream s such as royalties and licenses on m inerals and fisheries are paid in US dollars.
Overall, the increase in expenditure as a result o f exchange rate depreciation is believed to outw eigh the increase in dom estic revenues, thereby w orsen in g the fiscal situation.

Weak Revenue Collection Low er than projected revenue collection due to challenges in sustaining the dom estic reven u e m ob ilization drive w ill ad versely affect b u d get im plem en tation and the attainm ent o f G overnm ent's fiscal objective o f 20 percent o f dom estic revenue to GDP ratio.
In the m idst o f higher expenditures, especially the im plem entation o f the M ediu m -Term N ation al D evelopm ent Plan in gen eral and G overnm ent's flag ship Free Q u ality E d u cation Program m e in particular, this m ay lead to h igh er-th an - program m ed budget deficit.

This in turn w ill lead to increased borrow ing and/ or accum ulation o f arrears to suppliers and contractors and eventually increased debt burden.
High Public Debt Stock Sierra Leone has a substantial stock o f foreign debt, estim ated at US$2.0 billion (over 40 percent o f GDP).

Used productively, borrow ing can be used to fund investm ent in essential infrastructure, helping to boost future grow th potential, or to m anage tem porary dow nturns in revenues over the m acroeconom ic cycle.
32 The current stock o f debt poses a significant fiscal risk given its associated debt service paym ents (interest and am ortization), w hich stood at Le 1.2 trillion as at end 2018 in the m idst o f low dom estic revenues.

Fu rth er increase in the debt stock w ould increase debt service paym ents, w hich w ould further reduce funds available for other G overn m en t priority spending or lead to increasing deficits and further borrowing.
Rise in Domestic Interest Rates Sierra Leone also has a su bstantial stock o f dom estic debt in the form o f m arketable and non-m arketable securities.

A s at June 2019 these am ounted to Le 6 trillion w ith debt service paym ents am ou nting to Le 854 billion or 16.5 per cent o f recurrent expenditure.

Interest rates have rem ained high averaging at around 25 percent as o f June 2019, reflecting the increasing G overnm ent borrow ing and rising inflation.
Further increases in dom estic in terest rates w ou ld increase govern m en t sp en d in g on debt service paym ents, w eaken in g the bu dget position.

In terest rate rises w ou ld have spillover effects on private sector activity throu gh high cost o f borrow ing from the com m ercial banks.

This will reduce private investm ent activities and slow er grow th, w hich w ill have an adverse im pact on G overn m en t revenu es.
Unpredictability/Delays in the Disbursement o f Budget Support Less-than-expected donor financing m ay com plicate fiscal m anagem ent and lim it the ability to reorient spending toward social priorities and infrastructure.

5.2 Central Government Contingent Liabilities Public Private Partnerships (PPPs) In recent years, the G overn m en t o f S ierra Leone has entered into Pu blic Private Partnersh ips for the delivery o f infrastructure projects in energy, roads, ports, etc.
Total P P P transactions entered into by G overnm ent to date am ounted to US$116.1 m illion (see an n ex 6).
W hile PPPs provides efficient delivery, effective and tim ely com pletion o f infrastructure projects, and better fiscal control o f infrastructure and public services, there are inherent fiscal risks in the form o f contingent liabilities that m ay adversely im pact the fiscal position o f G overnm ent, if they m aterialize; for exam ple, early term ination o f contracts, m inim um revenue guarantees.
Operations o f State-Owned Enterprises The financial position o f m ost o f the state-ow ned enterprises is weak.

M ost o f them are operating at loss due to high adm inistrative costs, below m arket charges for their services as w ell as inefficient m anagem ent and poor governance.

The state- owned banks are saddled w ith high levels o f non-perform ing loans, w hose provision has eroded their capital base over the years.
The utility com panies (EGTC, EDSA, G U M A and SIER RATEL) and the Sierra Leone R oad Tran sport C orporation cannot cover their respective costs o f production due to inefficient m anagem ent and poor business models.

33 Som e o f them owe debts to the dom estic banking system and external private and public creditors.

M ost o f them cannot service the external debts on-lend to them by the C en tral G overn m en t (S A LC A B and SIE R R A TE L).
Th u s, these SO Es are not financially and operationally sustainable, resulting in poor service delivery.

Th ey have not been able to pay dividends to G overnm ent; instead they rely on subsidies from the G overnm en t. Th e ban ks, in p articu lar, requ ire b a ilou t in the form o f recapitalization by the Governm ent.
The continued w eak financial operations o f these SOEs poses a m ajor fiscal risk to G overnm ent in the form o f subsidies and or transfers as in the case o f EDSA, EGTC, SLRTC and G U M A and recapitalization in the case o f the state-ow ned banks.

The am ou nts involved are high and could derail the im plem entation o f the G overnm ent budget.

5.3 Policy Risks Policy risks can also w eaken the state o f public finances.
The w eak im plem entation o f policy reform s or budget support disbursem ent triggers by M D As including the M inistry o f Finance is one the greatest risks to the im plem entation o f the budget.

In m ost cases, contracts for the supply o f goods and services are entered into by M DAs and approved by the M inistry on the basis o f the expected disbursem ent o f budget s u p p o rt b y d e v e lo p m e n t p a rtn e rs .
In th e even t, w h e re th e trig g e rs are n o t im plem en ted , d evelo p m en t p artn ers w ill n ot disb u rse b u d get su p p ort and this com plicates budget execution.

G overnm ent w ould have to resort to increased dom estic borrow ing and or accum ulate arrears w ith attendant m acroeconom ic consequences.

Policy risks in the form o f difficulty in m aintaining reform ?
m om entum for fiscal consolidation w ill lead to low er-than- projected revenues and higher-than-budgeted expenditures, resulting in w ider fiscal deficits and increased borrowing.

5.4 Natural Disasters and Epidemics N atu ral disasters and epidem ics such as the E bola outbreak, flooding, m ud slides can derail budget im plem entation given the unexpected expenditures requirem ents in the m idst o f declin in g reven ues that accom pan y the disru ptions to econom ic activity.
5.5 Mitigation Measures and Contingency Plans 5.5.1 Mitigating macroeconomic risks To m itigate the m acroeconom ic risks, G overnm ent is pu rsu ing fiscal consolidation w ith em p h asis on in ten sifyin g d om estic reven u e m ob ilization and exp en d itu re rationalization m easures.

The im plem entation o f the D om estic Revenue M obilisation Strategy and other revenue enh ancing m easures w ill enable G overnm ent to attain the revenue to GDP target o f 20 percent o f GDP in the m edium -term .
In addition, the expenditure m anagem en t and control m easures inclu ding im plem entation o f the Payroll R eform Strategy, im proving public procurem ent system s, strengthening the com m itm ent control system s, autom ating the budget execution processes, rolling out o f IFM IS to all M D As and im proving the efficiency o f public investm ent com bined w ith pru dent public debt m anagem ent and supported by pro-active m onetary policy w ill prom ote fiscal and debt sustainability to restore and sustain m acroeconom ic stability.
34 To consolidate these efforts, G overnm ent has entered into an econom ic program m e w ith the IM F-th e E xtended C redit F acility (ECF) A rran gem en t. T h is program m e supports the im plem entation o f prudent fiscal and m onetary policies.

It also facilitates the disbursem ent o f external budget and balance o f paym ent support, w hich provides additional fiscal space, contribute to the building o f foreign exchange reserves, thereby stabilising the exchange rate.
M oreover, G overnm ent w ill pursue the diversification o f the econom y as articulated in the N ational D evelopm ent Plan (2019-2023) to reduce the reliance o f the econom y on one or few sectors.

In this respect, G overnm ent w ill seek to increase public and private in vestm en t in agricu ltu re, fish eries and the tou rism sectors to im prove productivity and value-addition.
5.5.2 Mitigating Measures for Contingent Liabilities Given the com plexity o f PPP transactions com pared to traditional procurem ent o f projects, there is need to build capacity in PPP negotiations, structuring, assessing costs, benefits and risks in the selection o f projects.

The selected projects should be chosen for good reasons and be fiscally sustainable in the m edium -to long term.

The con tractu al risk should also be adequ ately allocated betw een public and private partners.
T h ere is th erefore the need to im prove the govern a n ce o f P P P tra n sa ction s for infrastructure projects.

G overnm ent can seek technical support for the application o f tools developed by the IM F and the W orld B an k such as the Public Investm ent M anagem ent Assessm ent (PIMA) for the evaluation o f Public Infrastructure governance an d m a n a gem en t and the P P P F isca l R isk A ssessm en t M od el (PFRAM ) for the assessm ent o f PPP fiscal costs and risks.
G overnm ent has sought technical assistance from the IM F Fiscal A ffairs D epartm ent for the condu ct o f a PIMA.

To address the issue o f contingent liabilities, including those em anating from the operation s o f state-ow ned enterprises, the M inistry o f Finance has established a dedicated Fiscal R isk and SoE O versight Division charged w ith the responsibility for fiscal risk analysis and m anagem ent.
5.5.3 Mitigating Measures and Contingency Plans for Natural Disasters To m itigate the im pact o f natural disasters, G overnm ent should be pro-active in stren gth en in g its D isaster preparedness, response and m anagem ent capabilities.

In this regard, G overnm ent has established a Disease Surveillance, M onitoring and C ontrol U n it w ithin the M inistry o f H ealth and Sanitation to provide early w arning signals for potential epidem ics and design m easures to contain them.
G overnm ent is also in the process o f establishing a D isaster C ontrol and M anagem ent Agency, separate from the O ffice o f N ational S ecu rity to provide prom pt response to and m anage the afterm ath o f natural disasters.

35