GOVERNMENT OF SIERRA LEONE
STATEMENT OF ECONOMIC AND
For the Financial Year, 2015
Theme: “Restoring Livelihoods for Post Ebola Economic and Social
DR. KAIFALA MARAH
Minister of Finance and Economic Development
in the Chamber of Parliament
TOWER HILL, FREETOWN
Friday, 14th November 2014
MR. SPEAKER, HONOURABLE MEMBERS
1. Mr. Speaker, Honourable Members, I rise to move that the Bill
entitled “An Act to provide for the services for Sierra Leone for the
Financial Year 2015” be read for the first time.
2. Mr. Speaker, Honourable Members, the unprecedented outbreak of the
Ebola Virus Disease has created a devastating social and humanitarian
crisis with severe negative economic impact, thus, reversing the
impressive economic growth we have achieved in recent years.
3. Since the outbreak of Ebola, thousands of Sierra Leoneans have been
infected and hundreds have died and many more are still dying. Over
two-thirds of those infected are between the ages of 15 - 55 years- the
most economically active. Non-Ebola illnesses are adding to the toll of
death and suffering as clinics and hospitals staff are hesitant to
attend to other patients for fear of contagion of this dreadful disease.
4. Our doctors and nurses are the main victims with loss of lives in
several cases. Farmers and traders are among the fatalities, most of
whom are women. Children are orphaned, while society rejects them.
Schools and higher institutions of learning remain closed.
Short Term Economic Impact of the Ebola Disease
5. Mr. Speaker, Honourable Members, the combined effect of the
disruptions to agriculture, mining, manufacturing, construction,
transportation, domestic and
international trade and tourism activities has significantly lowered
prospects of the economy. Preliminary analysis shows that economic
growth will slow
down to 4.0 percent in 2014 compared to the original projection of 11.3
Ebola Virus Disease poses a great threat to macroeconomic stability,
and poverty reduction.
6. Mr. Speaker, Honourable Members, the measures adopted to stem the
of the Ebola outbreak, including the closure of periodic markets,
restrictions and the closure of borders, while appropriate, have also
the supply of domestic food and non-food items. This has resulted in
prices, especially for essential commodities. Our national currency,
depreciated by 9.2 percent in the official market and by 13.2 percent
in the parallel
market between end May and end October this year due to excess demand
for foreign exchange.
7. The financial sector has also been adversely affected. Normal
have been reduced by 1-2 hours daily while some banks closed operations
with consequences on internal trade. Some Community Banks and Financial
Associations (FSAs), which provide services for farmers and small scale
rural areas, have either closed down or scaled down operations.
8. As a consequence of the impact on economic activities, domestic
collection dropped and is estimated to decrease by about Le390 billion,
US$90 million in 2014.
9. While recent assessment shows that Sierra Leone’s public debt is
in the medium to long-term, the drop in domestic revenue and increase
induced by the Ebola outbreak posed serious challenges to debt
Social Impact of the Ebola Disease
10. Mr. Speaker, Honourable Members, the Ebola epidemic has also
impacted our social fabric. It has disrupted health and education
halted the implementation of water and sanitation projects, especially
in the rural
areas. The disease also worsened the already fragile situation of
women, children and
the physically challenged. In particular, it eroded the gains achieved
in the country’s
healthcare services, especially the flagship, Free Healthcare
11. Moreover, NGO operations in the water sector have either been
scaled down while resources for expanding the Water, Sanitation and
infrastructure diverted to Ebola-related activities. This is likely to
lead to an outbreak
of water-borne diseases, further putting pressure on an already
12. Mr. Speaker, more women than men have contracted the disease. This
attributable to (i) women’s role as caregivers in their families, which
places them at
higher risk of exposure to the Ebola disease; (ii) majority of health
care workers are
female nurses; and (iii) women are mainly engaged in informal trade in
markets and at border towns. The loss of livelihood and stigma has a
effect on women.
13. Available statistics indicate that 170 children have died from the
as at November 11, 2014; those children who have survived are
stigmatized and many
are roaming the streets of our communities.
14. The elderly also face increased poverty and social exclusion since
them are not eligible to pension and rely on family members for social
15. The physically challenged are far more affected and exposed. For
blind depend on the sense of touch, which exposes them to the disease.
many of them depend on begging on the streets. This does not only
expose them to the
disease but has also now limited their movement and sources of
16. Mr. Speaker, Honourable Members, on the basis of these devastating
the 2015 budget will announce policies and programmes to mitigate the
economic effects of the Ebola outbreak. Hence, the theme of this budget
livelihoods for post Ebola economic and social recovery ”. This is a
budget that brings
hope in a crisis; that lays the foundation for a full recovery.
II. NATIONAL AND INTERNATIONAL SUPPORT TO COMBAT EBOLA
17. Mr. Speaker, Honourable Members, at the onset of the outbreak,
in collaboration with its partners on the ground, responded swiftly. An
Operations Centre was established and a National Ebola Response Plan
Thus far, Government has contributed Le80 billion; of which Le9.9
billion directly to
the Ministry of Health and Sanitation; Le40 billion to the Ebola
response and Le 30
billion for hazard pay incentives into the dedicated Ebola account at
the Sierra Leone
18. The international community’s response, despite being slow
improved in recent months in the form of increased financial and
The estimated indicative and firm commitments, by development partners
follows: African Development Bank, US$61.2 million; World Bank, US$132
United Kingdom, US$535 million; European Commission Humanitarian Aid,
million; United States of America, US$10.2 million; Australia, US$9.6
US$6.5 million; Japan, US$5.5 million; China, US$4.8 million; Republic
US$2.5 million; Germany, US$2.2 million; Finland, US$2.2 million; and
US$1.9 million. Other contributing countries and organisations include
Denmark, Netherlands, Nigeria, The Gambia, Canada, Spain, Islamic
Bank, and the Organisation of Petroleum Exporting Countries Fund.
from Humanitarian organizations include the Children’s Investment Fund
US$14.9 million; and Central Emergency Response Fund, US$7 million.
19. In addition, several countries and agencies have committed funds to
regional efforts to fight Ebola in Guinea, Sierra Leone and Liberia.
These include the
Bill and Melinda Gates Foundation, US$51 million; Canada, US$30
Global Health Investment, US$5.9 million; Comic Relief, US$1.6 million;
Republic of Germany, US$87.8 million; Glaxo Smith Kline, US$1.5
US$5.2 million; and Timor Leste, US$2 million. In total, US$183 million
committed as support for Guinea, Liberia and Sierra Leone. These funds
are yet to be
allocated among the three countries.
20. Private donations, both local and foreign, amounted to Le 9.8
billion and US$4.6
million as per bank statement from the Sierra Leone Commercial Bank as
21. Mr. Speaker, Honourable Members, we appreciate the additional budget
support provided by the African Development Bank, US$24 million; World
and the European Union, €12.6 million to mitigate the impact of higher
revenue loss due to Ebola. The budget support provided by the IMF
augmentation of resources of US$40 million was timely in mitigating the
of Ebola and supported the increase in the amount offered in the weekly
Exchange Auction by the Bank of Sierra Leone.
22. Given the risks faced by our medical personnel, there is need to
incentives to encourage them to continue to provide medical care and
support to Ebola
victims. To this end, Government has provided Le30 billion while the
Development Bank and the World Bank have also provided US$ 5.2 million
million, respectively as hazard pay to health workers engaged in the
fight against Ebola.
23. Mr. Speaker, Honourable Members, as the International Community and
friends of Sierra Leone continue to support Government efforts in the
Ebola, we are mindful of the fact that despite the need for expediency,
we need to put
a mechanism in place to ensure that due processes are followed. To this
end, we are
engaging the services of Price Waterhouse and Cooper to provide
in the utilization of funds. In addition, to promote accountability and
ensure that the
various resources provided by organizations are properly coordinated,
we have agreed
on a joint reporting format with our development partners. Post Ebola,
development partners will issue a single report on the utilization of
to fight Ebola. This is meant to meet public accountability and the
Effectiveness prinicples of the New Deal.
24. Mr. Speaker, Honourable Members, let me on behalf of the Government
people of Sierra Leone extend our sincere gratitude to all our
multilateral as well as bilateral, that have contributed to the fight
against Ebola. I wish
to say special thanks to the United Nations Family for leading the
fight against the
Ebola Outbreak in Sierra Leone and globally. It is therefore no
coincidence that the
bulk of the resources dedicated to the fight against Ebola is channeled
Agencies in particular WHO, UNICEF, WFP, UNFPA, FAO and the UN
Trust Fund (MPTF).
25. We are also grateful for the setting up of the United Nations
Mission for Ebola
Emergency Response (UNMEER) to support the efforts of the National
Centre (NERC). The United Nations, for the first time in its history,
adopted a Global
Public Health Intervention Strategy for the sub-region.
26. We are confident that the efforts of the international community
will not be
limited to assist in containing the disease but will also support
Government’s post Ebola
Recovery Plan. Meanwhile, the World Bank has committed US$98 million to
Leone’s post Ebola recovery efforts and the International Finance
US$ 450 million towards trade, investment and employment for post Ebola
efforts in Guinea, Liberia and Sierra Leone. Our budget support
partners have provided
strong indications of scaling-up support in the post Ebola period
especially during 2015.
We are also urging our non-traditional partners who have stood with us
in the fight
against Ebola to continue to support our post Ebola economic recovery.
III PRE-EBOLA ECONOMIC PERFORMANCE
27. Mr Speaker, Honourable Members, you will recall the substantial
achieved in stabilizing the economy and improving infrastructure prior
to the outbreak
of the Ebola disease. In particular, our country recorded double digit
in recent years, thanks to iron ore production and export combined with
investment in infrastructure as well as buoyant activities in the
and services sectors.
28. Based on these developments, 2014 was regarded as the period for
these achievements while laying the foundation for improved public
in line with the Agenda for Prosperity. The performance of our economy
during the first
five months of 2014 was encouraging with leading indicators pointing to
economic growth, falling consumer prices, declining domestic interest
rates and a
stable exchange rate. The implementation of infrastructure projects was
on track while
service delivery challenges were being identified and addressed.
29. Mr. Speaker, Honourable Members, with continued implementation of
policies prior to the Ebola outbreak, real GDP growth was projected at
percent and inflation at 7.5 percent for 2014. During the first half of
the year, the
economy was on track in achieving these macroeconomic objectives as
activities in key
sectors, including agriculture, mining, manufacturing, construction,
such as banking and telecommunications were expanding.
The Bank of Sierra Leone’s proactive monetary policy management, backed
Government’s prudent fiscal strategy combined with improved domestic
and a stable exchange rate resulted in a decline in inflation from 8.2
December 2013 to 6.4 percent in April 2014, the lowest in five years.
30. In the fiscal area, despite a strong performance in 2013, outturn
for the first
half of the year was weaker than expected. Revenue underperformed by
on account of lower proceeds from the mining sector, taxes on goods and
corporate income tax. Recurrent expenditures were higher than projected
by Le 55.8
billion, mostly due to overruns in wages and salaries by Le 14.9
billion on account of
new recruitments, Ebola-related expenditures of Le9.9 billion, and
expected spending on goods and services by Le36.5 billion.
31. The external position improved with foreign exchange reserves
around US$530 million or 3.6 months of imports cover. The exchange rate
relatively stable as at end-June 2014.
32. Mr Speaker, Honourable Members, despite the challenging
environment, I am
pleased to inform this House that Sierra Leone met all the Quantitative
Criteria under the Extended Credit Facility Arrangement with the IMF at
IV. GLOBAL AND REGIONAL ECONOMIC OUTLOOK
33. Mr. Speaker, Honourable Members, the global economy is slowly
recovering following a slowdown in 2013. It is projected to grow by 3.4
2014 and further by 4 percent in 2015. While economic activities in the
economies (USA, Euro Area and Japan) are picking up, the outlook for
markets including China, Russia, South Africa are less optimistic.
34. In emerging market and developing economies, growth is now
projected to moderate to 4.6 percent in 2014 but will strengthen to 5.2
2015. Growth in the Chinese economy is slowing to 7.4 percent in 2014
and further to
7.1 percent in 2015, reflecting the weak performance of the
manufacturing sector, slow
increase in investment, and bank credit to the private sector. This has
implications for exports from Sierra Leone, especially iron ore.
35. In sub-Sahara Africa, strong growth is expected to continue
percent in 2014 and will strengthen to 5.8 percent in 2015, driven by
efforts to invest in infrastructure and by strong agricultural
production. Risks to the
growth prospects of Sub-Saharan Africa include the slow growth in
economies and the Ebola outbreak.
V. POTENTIAL MEDIUM-TERM ECONOMIC IMPACT OF EBOLA EPIDEMIC
AND MACROECONOMIC FRAMEWORK, 2015-2016
36. Mr. Speaker, Honourable Members, the medium-term macro-fiscal
framework agreed with the IMF in April 2014 indicate strong growth,
inflation and improving external and fiscal performance. This was
anchored on the
assumption of expansion in iron ore mining, agriculture and services,
the expected recovery in the electricity sector and the planned
investment under the Agenda for Prosperity.
37. Unfortunately, the heavy toll of the Eobla outbreak on human lives,
and its dampening effect on economic activities requires a revision of
medium term outlook to reflect current developments. The outlook is
anchored on two
scenarios: (i) an Optimistic Low Ebola Scenario that assumes the
containment of the virus
by end 2014;
and (ii) a Pessimistic High Ebola Scenario that assumes the Ebola Virus
is not contained until the third quarter of 2015.
38. If the low Ebola outbreak scenario materializes, an economic
emerge over the course of 2015. Under this scenario, economic
activities will rebound
led by agriculture, manufacturing, tourism and construction. This will
result in GDP
growth of 2.5 percent in 2015 compared to the 9 percent originally
is projected to increase to 12 percent compared to an earlier
projection of 6 percent.
39. Under the high Ebola scenario, agricultural output will fall
to large scale abandonment of farms by farmers and services will also
especially in the hospitality sector. Economic buoyancy will largely
Government expenditure, but this is highly uncertain. In this case,
overall GDP will
contract by 2.0 percent in 2015 while non-iron ore GDP will shrink by
Inflation will remain high reaching 14 percent, due to poor harvest in
2014 and loss
of planting seasons in 2015.
40. In both scenarios, it is expected that gross foreign exchange
remain above 3 months of import cover in 2015 on account of the
in Ebola related foreign inflows, and inflation will return to a single
digit in 2016.
VI. STRUCTURAL REFORMS
Monetary and Financial Sector Policies for 2015
41. Mr. Speaker, Honourable Members, regardless of the leading
Government will continue to embark on reforms. The Bank of Sierra Leone
policies to maintain low and stable prices and implement appropriate
measures to ensure financial stability. The Bank has completed the
installation of a
safe and modern payments system infrastructure to support high value
payments for commercial banks and their customers.
42. To deepen the financial system and improve rural financial
four new Community Banks were granted license in early 2014, Kamakwie
Bank, Madina Community Bank, Sumbuya Community Bank and Taiama Community
Bank, thereby increasing the number of community banks from thirteen to
The creation of the new Community Banks was supported by the
for Agricultural Development (IFAD).
43. The Apex Bank (SL) Limited was licensed to carry out first level
of Community Banks and Financial Services Associations (FSAs).
44. Mr. Speaker, on structural reforms, the Bank of Sierra Leone has
roadmap for developing and implementing risk-based supervision to
Sector Stability. In an effort to develop interbank transactions in
Securities Market, the Bank also prepared a Primary Dealer agreement to
the development of the interbank foreign exchange market. The Bank has
moved towards wholesale Foreign Exchange Auction, while awaiting
Assistance from the IMF to move the process further.
45. In 2015, the Bank of Sierra Leone will prepare an internal
to guide identification and supervisory actions in the event of
specific or systemic bank
distress. The Bank will also draw up a detailed risk-based supervisory
on-sight supervision of the largest banks in the country. Furthermore,
the Bank will
develop and issue to commercial banks, Internal Risks Management
forestall credit, market, and technology risks.
46. Mr. Speaker, Honourable Members, with the continued pressure on the
exchange rate, the fall in export receipts and the decline in capital
inflows, the foreign
currency component of payments for all Government funded contracts is
from 70 percent to at most 50 percent.
Public Financial Management Reforms in 2015
47. Mr. Speaker, Honourable Members, with the support of development
Government carried out a number of Public Financial Management (PFM)
both the central and local levels. These contributed to improving
public budgeting and
expenditure management, public procurement, public sector accounting
internal auditing and external oversight of public finances in recent
this, challenges remain in some specific PFM areas.
48. To address remaining challenges, Government developed a medium-term
Reform Strategy for the period 2014-2017. To this end, Government
to improving fiscal discipline, strengthening budget credibility and
ensuring value for
money as agreed under the Multi-Donor Budget Support Performance
Framework (MDBS-PAF). The implementation of this strategy is being
the new Public Financial Management Improvement and Consolidation
jointly by Government and the Multi-Donor Budget Support Partners.
49. Government will complete the regulations for effective
implementation of the
new Public Financial Management Bill, which will soon be submitted to
Honourable House. The new PFM Bill presents clear and comprehensive
of Government entities; introduces fiscal responsibility principles;
planning; and management of fiscal risks; strengthens budget discipline
enhance budget credibility; improves cash management; and strengthens
reporting and auditing.
50. Following the recommendations of Country Procurement Assessment
in 2012, the National Public Procurement Act, 2004 has been reviewed.
Bill has been approved by Cabinet and will be submitted to this
51. Progress in the establishment of the Treasury Single Account (TSA)
is also far
advanced. The TSA was scheduled to be completed in September this year
assistance was delayed because of the Ebola outbreak. Meanwhile, a
Understanding between the Ministry of Finance and Economic Development
Bank of Sierra Leone has been agreed that defines the roles and
stakeholders with regard to the implementation of the TSA.
52. Mr. Speaker, Honourable Members, the recent analysis of our debt
revealed that public debt, both domestic and external, is sustainable
in the medium
to long-term with minimum degree of risks. Going forward, Government
implementing prudent external borrowing practices by prioritizing
53. With regards to domestic debt, prudent domestic borrowing resulted
declining interest rates which created savings on interest payments of
in 2013 and Le122 billion in 2014.
54. To address the costs and risks of domestic debt burden, Government
the Medium Term Debt Management Strategy in 2015 to assess the impact
outbreak on the debt sustainability thresholds. We will also adopt a
framework within which Government can make informed choices on how
requirements could be met at the lowest possible cost consistent with a
A Project Preparation Fund (PPF)
55. A Project Preparation Fund (PPF) has been established as a
facility to finance large and medium scale project preparatory
activities. The Fund will
facilitate project preparation activities necessary to undertake
from identification through concept design to financial close,
studies, financial and legal structuring, as well as capital-raising.
activities include up-stream sector studies, structural adjustment
cycle activities and institutional capacity building programs.
56. The PPF will operate on the basis that ownership and commitment to
ultimately rests with the relevant MDAs, and in the case of commercial
projects, with the private operator of the project. In this regard,
has allocated the sum of Le5 billion to the Fund.
57. To strengthen budget execution and project monitoring, the Ministry
and Economic Development will appoint budget monitors in all the
VIII. POST-EBOLA RECOVERY- THE NEAR-TERM RESPONSE PLAN
58. Mr. Speaker, Honourable Members, consistent with the low Ebola
fiscal policy in 2015 will lay the foundation for post Ebola economic
strategy will focus on the following areas:
(i) Reviving the Economy: Stabilise and stimulate the economy by
the recovery of agriculture, commerce and trade as well as services,
(ii) Strengthen Health Systems: Establish Public Health Sierra Leone,
including the establishment of a well-staffed and equipped Centre for
Disease Control and medical insurance for health workers;
(iii) Revitalise the Education Sector: Address the challenges of
schools by implementing a nation-wide school feeding programme;
improve hygiene in schools and provide incentives to encourage children
to return to school;
(iv) Support Recovery of the Agriculture Sector For food security:
farm activities and extension services and gradually provide
assistance to farmers in the form of inputs such as farming tools, seeds
as well as credit facilities;
(v) Improve Access to Finance: Improve access to finance for SMEs to
cross-border and regional trade for job creation and restoration of
(vi) Scale up Social Protection support: Provide support to vulnerable
especially orphans and those affected by the Ebola Disease; and
(vii) Re-start Infrastructure projects: Support on-going works on roads,
energy and water and sanitation to provide opportunities for private
development, create jobs especially for youths and improve household
IX. PROJECTED RESOURCES FOR 2015
59. Mr. Speaker, Honourable Members, on the assumption of low Ebola
total budgetary resources are projected at Le3.3 trillion equivalent to
in 2015. This includes, domestic revenue of Le2.4 trillion; programme
grants of Le302
billion, including external budget support of Le269.4 billion from ADB,
DfID, EU and
the World Bank.
60. Borrowing from the domestic bank and non-bank sector through the
Government securities will amount to Le451 billion. Proceeds from the
the Sierra Rutile Loan will amount to Le51.6 billion, while proceeds
privatization of state enterprises are estimated at Le17 billion.
61. Income taxes will contribute Le921 billion; Goods and Services Tax,
billion; these include signifant contribution from telecommunications,
Excise duties, Le520 billion; Mining Royalties and Licenses, Le231
Fisheries Licenses and Royalties, Le40.1 billion. Revenue collected by
Department and Agencies in the form of fees, charges and levies will
amount to Le82
billion. Road User Charges and Vehicle licenses will amount to Le100
62. Development partners are expected to disburse Le742 billion from
well as new loans and Le495 billion of grants to finance capital
X. REVENUE AND TAX POLICIES FOR 2015
63. Mr. Speaker, Honourable Members, in 2015, fiscal policy will aim at
fiscal consolidation through increased revenue mobilization as well as
rationalization and prioritization. With the projected reduction in
and a potentially weak tax base, Government will adopt measures to
broaden the tax
base; strengthen tax administration and improve the efficiency of tax
collection. In this
regard, Government will streamline and rationalize tax and duty
payment of taxes for contracts awarded by Ministries, Departments and
64. Mr. Speaker, Honourable Members, property taxes remain an important
of revenue for local councils. In this regard, the Ministry of Finance
Development, in collaboration with the Ministry of Local Government and
Development, will work with all stakeholders to improve property tax
Specifically, cadastre mapping of all lands and buildings in urban
centres will be carried
out to determine the base of property taxes in the country.
65. Additionally, the NRA will implement the following tax
measures: (i) extensive stakeholder engagement; (ii) monthly
ASYCUDA and the Destination Inspection Companies Database to identify
in value of assessments; (iii) work with Indian Customs and World
(WCO) to adopt its reference price database; and (iv) develop and
implement a revenue
accounting, reconciliation, and commercial bank integration system
payment and accounting of taxes paid. Furthermore, with support from
Government will strengthen the newly established Extractive Industry
to ensure maximum realization of revenues from the extractive sector.
66. Mr. Speaker, Government will also introduce a Revenue
that consolidates the administrative provisions in the various tax
legislations into a
single document with the objective of reducing the burden of tax
taxpayers including importers. The Bill will remove inconsistencies in
provisions contained in various tax legislations and update provisions
to reflect current
approaches to improve tax administration. Accordingly, the Income Tax,
Tax and Customs Acts will be reviewed in line with the new Revenue
XI. EXPENDITURE ALLOCATIONS FOR 2015
67. Mr. Speaker, Honourable Members, the indicative allocations of
I am about to announce for 2015 are based on the priorities referred to
in this statement
under discretionary and non-discretionary expenditures.
A. Non-Discretionary Expenditures
Wages and Salaries
68. Consistent with the Medium-Term Wages and Salaries policy of
the Government wage bill is programmed to increase to Le1.58 trillion
in 2015 from
Le1.37 trillion in 2014. On this basis, I am pleased to announce a 15
in wages and salaries for all categories of public sector workers
effective July 1, 2015.
Thus the minimum wage will increase from Le480, 000 to Le 550,000 for
and from Le600,000 to Le660, 000 for Teachers, the Police, the
Military, Prisons and
69. Debt service payments are projected at Le347 billion. Of this,
Le228 billion is
interest payments on domestic and foreign debt and Le118 billion for
repayments of loans.
70. Total statutory transfers will amount to Le389.5 billion. These
billion to the Road Maintenance Fund; and Le 89 billion to Local
B. Discretionary Expenditures
71. Total discretionary expenditures are projected at Le 1.14 trillion.
Of this, Le646
billion is for recurrent expenditures; Le430 billion for domestic
funded capital projects;
Le22.1 billion for domestic suppliers arrears; and Le 45 billion as
the continuing fight against Ebola. Foreign funded capital expenditures
to Le1.24 trillion. The indicative allocations for all MDAs are stated
respective Pillars in the Agenda for Prosperity.
Pillar 1: Economic Diversification to Promote Inclusive Growth
72. Diversification of the Sierra Leone economy will be done through an
approach with participating Ministries, Departments and Agencies
73. Agriculture: As indicated earlier, disruption to agriculture and
in particular will worsen the food security situation with adverse
effects on nutrition
given the already high prevalence of malnutrition in the country. In
this regard, an
amount of Le45.9 billion is allocated to agriculture. This will support
the recovery of
the sector by enhancing agricultural productivity through the provision
including seeds, planting materials, agricultural tools and improving
the value-chain for food crops. This will also support the launch of
fertilizer programme and the rehalibitation of tree crops plantations.
amount of Le 14.1 billion will be transferred to Local Councils to
activities in rural areas.
74. An amount of Le9.6 billion is also allocated to agriculture from
budget. Of this, Le3.3 billion is counterpart funds for ongoing
and Le6.3 billion to support post Ebola recovery farming activities.
75. Development partners, including the World Bank, IFAD, GEF and
Union will also disburse Le38.6 billion to support ongoing
76. Tourism and Culture: An amount of Le5.5 billion is allocated to the
of Tourism and Cultural Affairs. Of this Le 2.2 billion is allocated to
the National Tourist
Board to undertake post Ebola image building and rebranding programmes
use of international media houses. This will also include the
implementation of a tourism marketing strategy. Additional funding is
rehabilitation of museums and development of the Lumley Beach.
77. Fisheries and Marine Resources: An amount of Le2.1 billion is
allocated to the
Fisheries sector to support artisanal fishing and aqua-culture as well
operationalisation of a Fish Testing Laboratory to obtain EU
certification for fish
exports. In addition, an amount of Le3.9 billion is allocated from the
budget, of which Le1.9 billion is counterpart contribution to the donor
in the Fisheries sector and Le2.0 billion to finance the construction
of cold rooms in
district headquarter towns as well as the fisheries training school.
The EU and World
Bank will provide Le7.1 billion to support other projects in the
Pillar 2: Managing Natural Resources
78. Environment: Due to the Ebola outbreak, poaching in animal
logging, farming and mining seem to have increased in protected forest
areas. This is
likely to impact negatively on the gains achieved in protecting water
forest and animal reserves. To address these, an amount of Le3.7
billion is allocated
to the National Protected Area Authority and the Sierra Leone
79. The Ministry of Mines and Mineral Resources is allocated an amount
billion in support of its activities. An amount of Le 4.1 billion is
allocated to the National
Minerals Agency to monitor and regulate mining activities while
enforcing the payment
of mining licenses and royalties; and the Ministry of Lands, Housing
Environment is also allocated an amount of Le2.8 billion.
80. From the domestic capital budget, an amount of Le1.3 billion is
Government counterpart contribution to various donor funded projects in
and environment sectors. Development partners, including the World
Union and UK-DfID are expected to disburse Le16.2 billion to support
of various projects in this sector.
Pillar 3: Accelerating Human Development
81. Health: Mr. Speaker, Honourable Members, to address the emerging
in the health sector, an amount of Le97 billion is allocated to the
Ministry of Health
and Sanitation. Of this, Le52 billion will support on-going efforts to
improve the quality
of and access to basic and tertiary health services and Le 45 billion
is allocated under
the contingency fund to support Ebola-related activities.
82. The National Pharmaceutical Procurement Unit is allocated an amount
Le35.1 billion for the procurement and distribution of drugs. In
addition, an amount
of Le20.3 billion will be transferred to the Local councils for primary
83. An amount of Le54.8 billion is allocated from the domestic
to facilitate the establishment of Public Health Sierra Leone,
including Le4.0 billion
for the rolling out of a Medical Insurance Scheme for health workers.
The Ministry will
work out the details of the proposed Public Health Sierra Leone
programme to capture
various projects such as mainstreaming sanitation and hygiene across
establish a national ambulance service and a pool of paramedics and
Hence a Public Health Master Plan will be developed shortly.
84. Development partners, including the Kuwait Fund, BADEA, IDB, World
Global Fund and GAVI will disburse an amount of Le100.4 billion to
projects in the health sector.
85. Education: Mr. Speaker, Honourable Members, Government indefinitely
postponed the re-opening of schools, universities and other higher
learning due to the fear of contagion, especially among children. This
effects, including the loss of time in the learning process, delay in
examinations such as BECE, likelihood of school drop-outs and increase
86. In this regard, an amount of Le60.1 billion is allocated to the
Education, Science and Technology to support a nationwide school
accelerated education through radio and television teaching programmes.
87. Government is also allocating Le 10.3 billion to scale up support
to the girl child
programme. The current situation involves the payment of tuition fees
for three terms
for girls in JSS I, two terms for girls in JSS II and one term for
those in JSS III. With
effect from next academic year, Government will pay tuition fees for
all the terms for
girls in Junior Secondary School. In addition, an amount of Le 37.8
billion will be
transferred to Local Councils to scale up procurement of teaching and
materials, disinfectant for schools, payment of tuition fee subsidy for
children and payment of examination fees for pupils taking NPSE and
BECE. An amount
of Le7.9 billion is also allocated to continue to pay examination fees
88. Grants to tertiary educational institutions, including tuition fee
students at University of Sierra Leone and Njala University will amount
to Le 142.5
billion. The tuition fee subsidy will benefit about 18,000 students.
89. Development partners are expected to contribute Le164.5 billion in
projects in the education sector.
90. Water Resources: An amount of Le8.9 billion is allocated to the
Water Resources in support of its activities, including the
establishment of a National
Water Resource Management Agency to improve the operations of Guma
Company and SALWACO. An amount of Le13.3 billion is allocated to
Guma Valley Water Company for the improvement of water distribution
rural areas and the Western Area, respectively. The Local Councils are
an amount of Le 4.5 billion for solid waste disposal services.
91. The ADB, BADEA, IDB, OFID and GEF will disburse Le92.1 billion to
various water projects including the Rural Water and Sanitation
Project, the Three
Town Water Supply Project for Bo, Kenema and Makeni and the Kabala
Pillar 4: International Competitiveness
92. Roads: Mr. Speaker, Honourable Members, the on-going phase of road
programmes and other public works will continue as part of our efforts
to stimulate the
economy and provide jobs, especially for the youth. To this end, an
amount of Le131.8
billion is allocated in respect of the rehabilitation and
reconstruction of trunk roads,
Freetown urban and district headquarter town streets.
93. Road User Charges and Vehicle Licenses will contribute an amount of
billion to the Road Maintenance Fund Administration. The Road Fund will
routine maintenance of trunk and city roads, bridges and ferries,
upgrading of existing
roads as well as the development of new trunk and feeder roads.
94. Development partners, including the European Union, ADB, IDB,
Kuwait Fund, BADEA, OPEC and GIZ will disburse an amount of Le434
billion to the
95. An amount of Le8.6 billion is allocated to the Ministry of Works,
Infrastructure, of which Le2.6 billion is for repairs and maintenance
buildings. In addition, Le 18.8 billion is allocated to the Ministry
for the rehabilitation
and construction of Government buildings.
96. Energy: Mr. Speaker, Honourable Members, one of the key milestones
would underpin the successful implementation of the Agenda for
Prosperity and support
the post-Ebola recovery programme is the restoration of sustainable
in Freetown and urban-rural towns. To achieve this, Government, in
its development partners, launched several pipeline projects to improve
situation throughout the country. These include the World Bank funded
and Energy Sector Utility Reform Projects; IDB funded Low and Medium
Network Improvement Project; the Japanese International Cooperation
Transmission and Distribution Lines Project; and the West Africa Power
funded by the African Development Bank.
97. As part of regional efforts, ECOWAS provided a grant of US$21.8
address emergency needs of the National Power Authority in the Western
Additionally, pipeline electricity generation arrangements with Addax
15MW and Cooperbelt Engineering Cooperation (CEC) for 128MW to be
over a period of 18-36 months are underway to improve energy access in
98. The Power Sierra Leone Project that seeks to increase electricity
capacity to 1,000 MW by 2017 was recently launched in the United
Kingdom by the
Minister of Energy. The energy sector strategy will focus on the
additional thermal plants, development of hydro projects and solar
and extension of the transmission and distribution network as well as
99. As part of this project, Government will issue a special
Term Bond” in tranches beginning 2015 to raise an amount of US$106
million to fund
the installation of power plants and transmission and distribution
provincial headquarter towns as approved by Parliament in July 2014.
100. In the meantime, an amount of Le68.2 billion is allocated from the
capital budget for the procurement and installation of thermal plants
for provincial and
district headquarter towns. An additional amount of Le 34.5 billion is
support the rebuilding of the National Transmission and Distribution
billion is provided to support the operations of the Barefoot College
for improvement of
solar energy; Le3.0 billion as Government contribution to the
restructuring of the electricity sector; and Le9.2 billion as
contribution to the West
Africa Power Pool Project.
101. Development partners including the ADB, European Union, World
and JICA are expected to provide an amount of Le106.6 billion to
support energy sector
102. Trade, Finance and Investment: An amount of Le16.9 billion is
the Ministry of Trade and Industry to support the implementation of the
policy to encourage local business ideas, strengthen the operations of
the Sierra Leone
Produce Marketing Company, including a provision of Le5.0 billion as
capital for trade
in agricultural products; support to consumer protection activities;
in regional trade integration programmes. Development partners will
billion to support the Rural Private Sector Development Project.
103. Government is also allocating an additional amount of Le1.3
billion from the
domestic capital budget to the Ministry of Trade and Industry. Of this,
will support the reconstruction of the Standards Bureau Laboratory; and
as counterpart funds to donor funded private sector development and
projects. Development partners including the World Bank and the ADB
Le12.1 billion to support the implementation of the Financial Sector
and institutional development and capacity building projects.
104. Small and Medium Scale Enterprises (SMEs) Fund: An amount of Le
is allocated to operationalise the SME Fund in 2015. Additional
resources from the
proceeds from the Japanese Food Aid of about Le7.0 billion will be
complement Government’s allocation to the SME fund. The Fund will
for SMEs, development of young entrepreneurs and improve access to
finance at preferential interest rates through the Community Banks and
Services Associations. Government will establish an independent agency
the SME fund. A National Steering Committee for SME development will be
comprising Ministry of Finance and Economic Development, Bank of Sierra
Ministry of Trade and Industry, Office of the Chief of Staff, Sierra
Leone Chamber of
Commerce, Industry, and Agriculture, Sierra Leone Investment and Export
Agency and the International Finance Corporation to implement a
development programme incorporating the SME Policy and the SME Fund. The
committee will be co-chaired by the Ministry of Trade and Industry and
of Finance and Economic Development while the Bank of Sierra Leone will
the programme through the Apex Bank.
105. In addition, an amount of Le3.2 billion is allocated to the Sierra
Investment and Export Promotion Agency (SLIEPA) to facilitate
investment and export
Pillar 5: Labour and Employment
106. Mr. Speaker, Honourable Members, the Ministry of Labour and Social
Security is allocated an amount of Le5.3 billion for various activities
enforcing labour regulations and review of the obsolete labour laws to
sector development for job creation. In addition, Government is
allocating Le 4 billion
for cash transfers to the aged and vulnerable groups.
107. The Ministry of Youth Affairs is allocated an amount of Le4.7
billion in support
of youth activities. In addition, Le 2.1 billion is provided from the
domestic capital budget
for the implementation of the National Youth Development and
Government counterpart contribution to the World Bank funded Youth
Support Project amounts to Le 864 million. The World Bank will disburse
Le 4.8 billion
in support of this Project.
108. Skills Development Fund: Mr. Speaker, Honourable Members,
skills gap exists in both the public and private sectors, which is
private investments and public service delivery. It may interest you to
know that, there
are 201,000 motor bike riders (Okada) and 1,500 Ataya bases each with a
of at least 50 compared to 621 graduates in engineering, medicine and
communication over 2010-2014. Based on the estimate from the Ministry
Sierra Leone needs 3,300 medical doctors. There are at present 386
only 9 Dental Surgeons in the country, leaving a gap of 2,914 doctors.
number of nurses and mid-wives is 1,365. Analysis from the Ministry of
that an additional 8,615 nurses and mid-wives are required.
109. In an effort to address this imbalance between skills available
required, Government established the Skills Development Fund in 2014.
The Fund will
be operationalised in 2015 to support young, brilliant, and talented
to undertake highly specialized technical and vocational training
programmes to fill
the existing skills gap.
110. Already Le2.1 billion mobilized this year is ring-fenced for the
Fund. In addition, Le7.0 billion will be transferred from the proceeds
from the Japanese
Food Aid to the Skills Development Fund to support, among others, the
of a Young Engineers’ Corps and access to advanced and specialized
training for young
medical graduates as well as roll-out a Young Professionals Internship
111. Sierra Leone has recently accepted an invitation to join other
countries in a Talent Mobility Partnership (TMP) programme. The
in the sub-region, encourages the practice of moving human resources
countries with a view to effectively acquire, align, develop and engage
talents to foster national development.
112. In this regard, a National Working Group has been set up
Ministries, Departments and Agencies to oversee stocktaking and country
of critical skills gaps and limitations to the country’s ability to
harness optimum benefits
from our ECOWAS Common Approach on Migration. The TMP will be used as a
to broaden the focus on people development beyond jobs to include
strategic career development.
Pillar 6: Social Protection
113. Mr. Speaker, Honourable Members, Government will implement a broad
of social protection measures in 2015 and beyond aimed at mitigating
the social and
economic impact of Ebola. These include, among others, a nation-wide
programme, and cash transfers to Ebola Orphans and families affected by
114. In this regard, the Ministry of Social Welfare Gender and
is allocated an amount of Le6.7 billion to support vulnerable groups,
orphans and affected households. An amount of Le 2.4 billion is
transferred to Local
Councils in support of Social Welfare, Gender and Children’s Affairs in
to strengthen the child protection system.
115. The National Commission for Social Action is allocated an amount
million from the recurrent budget and an additional Le3.5 billion from
capital budget to complement the support provided by the World Bank
Safety Nets Programme; the IDB funded Sierra Leone Community Driven
ADB funded Social Action Project as well as support to the Government
Reparation Programme. A total of Le 47.7 billion will be invested in
vulnerable sections of society.
116. Development partners will disburse Le34.3 billion. Of this, the
World Bank will
disburse Le5.6 billion for the Social Safety Nets programme, KFW, Le9.8
billion for the
Growth for Peace Consolidation, and the IDB, Le16.6 billion for the
Community Driven Development Project.
Pillar 7: Governance and Public Sector Reforms
117. Mr. Speaker, Honourable Members, Government will continue its
to support good governance and public sector reforms to enhance the
delivery of public
services, including, strengthening national security and the fight
Accordingly, amounts allocated to the respective MDAs under this pillar
Le67.8 billion; Defence, Le69.1 billion; Prisons, Le29 billion;
National Fire Authority,
Le7.9 billion, Judiciary, Le3.2 billion; Ministry of Foreign Affairs
Cooperation, Le22.1 billion; Constitutional Review Secretariat, Le 2.5
billion; and Audit
Service Sierra Leone, Le4.7 billion. The Anti-Corruption Commission
will receive Le4.2
billion for the roll-out of the National Anti-Corruption Strategy.
118. The House of Parliament is allocated Le6.9 billion from the
and Le7.8 billion from the domestic capital budget to the Constituency
Fund for rural infrastructure projects.
119. To sustain, coordinate, and supervise the decentralization
Ministry of Local Government and Rural Development is allocated
indicated earlier, a total of Le89 billion will be transferred to local
councils to support
the delivery of Health, Education, Agriculture, Social Welfare and
Water and Sanitation
Services at the community level.
120. Statistics Sierra Leone is allocated an amount of Le8.8 billion
additional Le3.0 billion for the conduct of the delayed National
Population and Housing
Census and Le 1.0 billion for the preparatory activities for the third
Integrated Household Survey to be implemented in early 2016.
121. The National Public Procurement Authority is allocated an amount
billion for monitoring of procurement contracts among other activities.
An amount of
Le2.0 billion is allocated from the domestic development budget for the
of a Public Service Academy.
Pillar 8 Gender and Women’s Empowerment
122. Mr. Speaker, Honourable Members, to address the emerging effects
of the Ebola
outbreak on women, an amount of Le2 billion will be provided to
Women and Youth Empowerment Fund in 2015. Development partners, in
the UK–DFID, have affirmed their commitment to support this Fund. The
fund will be
used to support women assimilation into active post Ebola economic
123. In furtherance of the policy of empowering women, 30 percent of
procurement transactions should go to women. Ministries, Department and
Agencies should report on this through the annual public performance
and the National Public Procurement Authority.
XII. BUDGET DEFICIT AND FINANCING GAP
124. Mr. Speaker, Honourable Members, the overall budget deficit
is projected at Le1.3 trillion (5.4 percent of GDP). Net foreign
financing from project
and programme loans will amount to Le710.4 billion. Domestic financing
to Le449.5 billion.
125. Mr. Speaker, Honourable Members, even under the best case scenario
Ebola), there is a projected uncovered financing gap of about US$37.2
million or Le161.1
billion to support the allocations I have just announced. In this
would seek additional external support to close this gap during the
course of 2015.
126. In the event additional resources are not realised (i.e. if the
financing gap of US$37.2 million is not closed), the allocations to
MDAs would be revised
accordingly. Thus, the Appropriation Bill is divided into two columns:
a funding gap and allocations without a funding gap. The current
announced are based on the assumption that the funding gap will be
XIII. RISKS TO THE 2015 BUDGET
127. Mr. Speaker, Honourable Members, as indicated earlier, economic
for 2015 and beyond are highly uncertain due to the unpredictability of
of the Ebola disease and external risks. These risks may impact
negatively on budget
execution and the performance of the economy. In our case, risks
specific to Sierra
Leone are described below.
First, the prolonged spread of the Ebola disease will further disrupt
activities, undermine domestic revenue collection, increase
and divert budgetary resources from other productive activities to
fight the epidemic.
In such a situation, Government will further scale back the domestic
and re-prioritise discretionary expenditures accordingly.
Second, volatility in global commodity prices, notably iron ore, will
budget management. Iron ore prices have already dropped by 28.2
US$120.4 in quarter one to US$80 per metric ton in quarter four.
Further fall in iron
ore prices will undermine the collection of royalties, which in turn
will pose a
significant risk to the implementation of the budget.
Finally, geo-political developments in the middle-east and impact on oil
production may result in higher crude oil prices that could complicate
of the budget with subsidies for petroleum products.
128. To manage and mitigate these risks, the following action will be
(i) Government and the international community will intensify efforts to
rapidly contain the spread of the Ebola epidemic in order to restore
confidence for local and foreign investment activities to resume;
(ii) Government to continue engaging development partners to seek
budget and balance of payments support to cover the emerging fiscal and
balance of payments financing needs;
(iii) Government to continue enhancing tax administration to address
revenue collection challenges, particularly through measures aimed at
curbing tax evasion, strengthening controls, and reducing duty waivers;
(iv) Government to continue to monitor the stock levels and prices of
commodities especially rice and petroleum products and support the
private sector to ensure uninterrupted supply of these communities.
129. Mr. Speaker, Honourable Members, the Ebola outbreak has
into an environment of high uncertainty. Unless on-going efforts are
sustained to contain the outbreak, the policies and programmes
announced in this
budget will not be implemented. Therefore, the successful
implementation of this
budget hinges on the collective and concerted effort of all Sierra
Leoneans, and the
support from our development partners to end this epidemic.
130. In concluding this statement, I wish to thank my colleague
Minister of State, Deputy Minister, Financial Secretary and staff of
the Ministry of
Finance and Economic Development. The Governor, management and staff of
of Sierra Leone also deserve our gratitude. The Commissioner General,
and staff of NRA deserve special commendation for their sustained
effort in maxmising
domestic revenue mobilisation during these trying times.
131. Mr. Speaker, I would like to thank the Chairpersons of the Finance
Transparency Committees of Parliament, District Budget Oversight
Non-State Actors, members of the print and electronic media who
participated in the
open budget discussions. The contributions and insights provided by all
of them were
important in guiding the budget proposals I have presented to this
House. As usual, the
Government Printer and staff produced the printed Statement and
Estimates on time.
132. Finally, Mr. Speaker, Honourable Members, as I am closing this
allow me to share this thought that the tomorrow of today will be the
another day. In other words, the aspirations and challenges of the
will become the history of a succeeding one. This budget has,
therefore, been developed
by Government to bring about economic recovery, and strengthen social
133. The successful implementation of this budget will go a long way to
impact of the Ebola outbreak and improve livelihoods. It is the
beginning of the
development of a holistic strategy to put the economy once again on its
feet after Ebola.
It behooves us therefore, to rally behind this budget, and to fight
together to bring Ebola
to an end. I, therefore, commend it to the House.
134. I thank you for your attention.