Full Budget Speech to Parliament by Finance Minister Dr. Kelfala Marah

Posted by  on December 3, 20130 Comment

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MR. SPEAKER, HONOURABLE MEMBERS
I. INTRODUCTION
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 2014” be read for the
first time.
2. Mr. Speaker, Honourable Members, you will all recall that His Excellency, the
President Dr. Ernest Koroma, made a commitment to improve the lots of youths and
women of our beloved country, Sierra Leone. Government has therefore dedicated this
budget to the youth, women and our workforce. Hence, the Theme: “Improving the
Livelihood of Youth, Women and our Workforce.”
3. This budget is the first annual plan of the Agenda for Prosperity (2013-18) aimed
at charting the road to our collective prosperity and to a Middle Income Country (MIC)
Status. This budget offers new opportunities, it provides for a new economic model and
a paradigm shift in our national economic development.
4. This is a pro-poor budget that provides the foundation to diversify our economy,
to be globally competitive and to accelerate our human development. In so doing, it
proposes to improve labour conditions and employment opportunities for our youth and
women, improve governance, mainstream social protection and empower our youth and
women. This is a people centred budget, a plan for inclusive economy and finance, and
a strategy that put money in the pockets of our people.
5. This budget subsidizes tuition fees for about 18,000 University Students,
provides school fees subsidy for about 1,350,000 school children, improve access to
credit for our youths and women, establishes a Fund to train our youths and women,
creates a Fund to economically empower our youths and women, provides opportunities
for our youths and women to actively participate in the agriculture value-chain and
other enterprises, and protect our girls from teenage pregnancy, among others.
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6. Mr. Speaker, Honourable Members, our people witnessed the tremendous
transformation throughout the country as we implemented the Agenda for Change. We
have witnessed a resilient economy underpinned by strong economic growth in the face
of global economic challenges, declining inflationary pressures, a new record low
domestic interest rates, stable exchange rates, increased output of food and export
crops, increased investment in trunk, city and feeder roads, increased electricity
generation including solar street lights in Freetown and the provinces, free health
services for children, pregnant women and lactating mothers; free primary school
education; and payment of examination fees for NPSE, BECE and WASSCE; reduction
in the barriers to business development; significant improvement in public financial
management; and increased inflows of foreign direct investment; all of which have
translated into significant reduction in the incidence of poverty from over two thirds
of the population in 2004 to about half of the population in 2011.
7. Our social services are also improving with the implementation of the free
health care programme. The number of children sleeping under insecticide treated bed
nets increased three-fold. The proportion of deliveries taking place in health facilities
increased from 17.8 percent in 2008 to 55 percent in 2011 and further to 60.9 percent
in 2012. The percentage of children immunised against common childhood diseases
increased from 54.6 percent in 2008 to 83.8 percent in 2011 and further to 87 percent
in 2012.
8. Mr. Speaker, Honourable Members, these achievements have not gone unnoticed.
They have been recognised by our development partners and international rating
agencies as highlighted below:
• the MO Ibrahim Governance Index rated Sierra Leone as having the third
fastest improving governance score for the past six years
• the World Bank’s Country Policy and Institutional Assessment (CPIA) elevated
our country from being a weak to medium performing country in 2013
• The World Bank’s Doing Business Report rated us among the top 10 reforming
countries in general and the best in protecting investors in particular
• Our country used to occupy the bottom position on the United Nations
Development Programme Human Development Index (HDI) up to 2009 but
moved 10 places from the bottom in 2012.
9. Mr. Speaker, in spite of these accolades, more needs to be done. Significant
challenges still remain. Unemployment, especially among the youth, is still high.
Child, infant and maternal mortality rates as well as primary school completion rates,
though improving, are yet to reach the averages for Sub-Saharan Africa. Our
infrastructure is still relatively weak. Given this situation, we must respond to His
Excellency, the President’s call to do more.
10. Mr. Speaker, Honourable Members, I will now briefly review global and regional
economic developments in 2013 and outlook.
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II. GLOBAL AND REGIONAL ECONOMIC DEVELOPMENTS AND OUTLOOK
11. Mr. Speaker, Honourable Members, growth in the global economy remains
subdued as downside risks persist with new risks emerging. While advanced economies
are recovering, reflecting recovery in the United States, Japan and to some extent the
Euro Area, growth in emerging market economies, which accounted for the bulk of
global growth in recent years, has moderated. As a result, Global output growth in 2013
has been revised downwards from 3.3 percent earlier in the year to 2.9 percent in
October. The global economy is expected to grow by 3.6 percent in 2014, lower than the
earlier projection of 4.0 percent.
12. Growth in Emerging Market and Developing Economies is estimated at 5
percent in 2013 and is projected, at 5.5 percent in 2014, lower than earlier projected,
reflecting weaker growth prospects in China and the other major emerging market
economies. This is attributed to infrastructure bottlenecks and other capacity
constraints, slower external demand growth, lower commodity prices, financial
stability concerns, and, in some cases, weaker policy support.
13. Growth in Sub-Saharan Africa is expected to remain robust, though lower than
earlier anticipated. Our regional economy is expected to grow by 5.0 percent in 2013
and 6.0 percent in 2014 reflecting continuing investment in infrastructure and export
capacity as well as strong growth in mineral export and lower income countries,
including Sierra Leone.
14. These changing growth patterns raise new policy challenges for low income
countries. In the face of these global downside risks, our foremost task is to implement
sound fiscal and monetary policies to ensure macroeconomic stability and focus on
structural reforms for growth and inclusiveness. Achieving this requires the concerted
and coordinated efforts of all Sierra Leoneans to support the implementation of The
Agenda for Prosperity.
15. Mr. Speaker, Honourable Members, permit to present domestic economic
development in 2013.
III. MACROECONOMIC AND BUDGETARY PERFORMANCE, 2013
Macroeconomic Performance
16. Mr. Speaker, Honourable Members, despite a difficult global financial and
economic environment, we have continued our pursuit of sound macroeconomic
policies. On the basis of this performance, the Executive Board of the International
Monetary Fund (IMF) approved our request for a new economic programme supported
under the Extended Credit Facility (ECF) in an amount of US$ 95.9 million in October
2013. The programme aims to scale-up spending on infrastructure and basic social
services and policies to support macroeconomic stability. Going forward, Government
will strengthen fiscal policy implementation to support macroeconomic stability,
private sector development and job creation.
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17. Mr. Speaker, thus far, our economy is on track to achieve the projected growth
rate of 13.3 percent in 2013, reflecting buoyant activities in the mining sector supported
by the expansion in agriculture, services and construction sectors. Excluding iron ore,
the economy is expected to grow by 6.0 percent in 2013.
18. Inflationary pressures moderated during 2013 with the year-on-year inflation
returning to a single digit of 9.5 percent in July and further declined to 9.1 percent
in September 2013, reflecting the stability in the exchange rate, the increased
domestic food production as well as proactive monetary policy supported by prudent
fiscal policy.
19. Following prudent expenditure management underpinned by Government’s
stance of zero borrowing from the domestic securities market during the first half of
the year, interest rates on government securities plummeted. The 3-months Treasury
bill rate declined from 19 percent in December 2012 to 3.5 percent in October 2013.
Interest rates on Treasury Bonds declined from 20 percent in December 2012 to 6
percent in October 2013. Despite these developments in the securities market,
commercial banks lending rates remain high. Nonetheless, Lending rates gradually
declined to between 19.7- 25.3 percent in October from a range of 21-29 percent.
20. Total exports rose by 68 percent during the first half of 2013 to US$ 850 million
compared to US$ 506 million for the corresponding period in 2012. The rise in exports
was largely driven by iron ore which amounted to US$ 433.5 million or 51 percent of
total exports.
21. Total imports increased by 31 percent to US$995 million for the first half of 2013
compared to US$ 757 million for the same period in 2012. The increase in imports was
driven mainly by food and fuel imports. Thus, the trade balance for the first half of 2013
narrowed to US$ 145.2 million compared to US$ 251.3 million during the first half of
2012.
22. Gross international reserves amounted to US$ 426.7 million equivalent to
almost 3.0 months of imports as at end September 2013. The rise in exports and foreign
direct investments impacted positively on the exchange rate which has remained
stable against major international currencies during the period.
Budgetary Performance
Domestic Revenues
23. Total revenues collected as at end September 2013 amounted to Le 1.65 trillion
or 9.5 percent of GDP. The improved revenue collection is mainly due to the betterthan
expected performance of Income Taxes, Goods and Services Tax (GST) and Nontax
revenues, including mining royalties, licences, fees and other levies.
24. Income taxes amounted to Le 646.3 billion and exceeded the target by Le 42.1
billion mainly due to improved collections of personal income taxes reflecting the
increased employment in the mining sector. Goods and Services Tax collections
amounted to Le 327.6 billion.
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25. Customs and Excise duties collected amounted to Le 366.4 billion. This is below
the target due to lower than expected collection of petroleum excise duties. The lower
petroleum excise duties resulted from the constant pump prices maintained by
Government despite the higher and increasing international prices of petroleum
products. Non-tax revenues amounted to Le 309.2 billion.
Grants
26. Total grants as at end September 2013 amounted to Le 278.4 billion. Of total
grants, programme grants (external budgetary support) amounted to Le 66.0 billion
while disbursed project grants amounted to Le 212.5 billion.
Expenditures
27. Total expenditures and net lending as at end September 2013 amounted to Le
2.2 trillion or 12.7 percent of GDP. Of this, recurrent expenditures amounted to Le 1.67
trillion. Wages and salaries amounted to Le782.2 billion.
28. Total interest payments amounted to Le 224.0 billion. Of this, interest
payments on domestic debt amounted to Le 208.1 billion. Foreign interest payments
amounted to Le 15.9 billion.
29. Non-salary non-interest recurrent expenditure amounted to Le 654.5 billion.
Of this, expenditure on Goods and Services amounted to Le 423.3 billion. Transfers to
Local Councils amounted to Le 81.7 billion. Transfer to the Road Maintenance Fund
amounted to Le 40.1 billion.
30. Capital expenditure amounted to Le 589.5 billion. Loans and grants disbursed
by development partners to fund capital projects amounted to Le335.1 billion.
Domestically funded capital expenditure amounted to Le 254.3 billion.
Budget Deficit
31. The overall budget deficit, including grants, amounted to Le 270.4 billion or
1.6 percent of GDP. Excluding grants, the budget deficit was Le 548.9 billion. The lower
budget deficit reflects the fiscal consolidation and rationalization of expenditures
especially during the first half of 2013.
Financing
32. Mr. Speaker, Honourable Members, as mentioned to this House in July whilst
I was presenting the Supplementary Budget, execution of the 2013 budget has been
very challenging. You will recall that at the end of 2012, we accumulated and carried
over into 2013 about Le 251.3 billion of unpaid obligations in the form of printed cheques
and vouchers. This distorted budget execution especially during the first half of this
year, as we have to use a combination of programmed and unprogrammed budgetary
resources to clear the obligations.
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33. To prevent this problem from recurring by the end of this year, we have executed
the 2013 budget in aggregate within the overall programme expenditure allocations in
the revised budget and this has been supported by improved domestic revenue
mobilisation. Despite our efforts, it is likely that we would roll-over about Le 150 billion
of uncleared obligations into 2014 due to delays in the disbursement of programmed
2013 budgetary support from our development partners. We have however, received
strong commitments from our development partners that the outstanding budgetary
support disbursement of about Le 236.7 billion would be made by end of December 2013.
34. In this vein, I am seeking the approval of Parliament to allow the Bank of Sierra
Leone to provide a bridge financing of Le 90 billion (above the statutory limit) to the
Government in the form of Ways and Means Advances to clear these obligations
immediately. My Ministry will sign a Memorandum of Understanding with the Bank
of Sierra Leone to refund this advance in full once budget support disbursement from
development partners materializes by the end of this year.
35. The Bank of Sierra Leone will use its monetary instruments to mitigate
potential impacts of this arrangement.
IV. MEDIUM-TERM MACROECONOMIC OBJECTIVES AND PROSPECTS,
2014-2016
36. Mr. Speaker, Honourable Members, the outlook for our economy is encouraging.
We forecast this will translate into a sustained and robust economic growth; low
inflation; higher government revenues; increased exports and foreign exchange
reserves; and a stable exchange rate.
37. Our overriding objective as a Government in the medium term is to create job
opportunities for our youth and women through sustained and inclusive growth.
Economic growth will be supported by the continued rises in iron ore production and
exports; higher productivity in agriculture; scaling up of public investment, especially
in infrastructure; and the projected expansion in the services and construction
sectors.
38. Exports will grow by an average of 21.1 percent over 2014-2016. However, import
growth will moderate to an average of 4.6 percent over the same period due to the scaling
down of machinery imports by mining companies.
39. The exchange rate will remain market determined and is expected to be stable
against major international currencies as export earnings, FDI inflows and remittances
increase in the medium term.
40. Mr. Speaker, Honourable Members, in summary, our medium-term economic
objectives for the period 2014-16 are (i) to achieve an average real Gross Domestic
Product growth (excluding iron ore) of 6.5 percent by 2016. Including iron ore, GDP is
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expected to grow by 14 percent in 2014 and by an average of 10 percent during 2015-
2016; (ii) reduce inflation to 7.5 percent in 2014 and further down to 5.4 percent by 2016;
and (iii) improve gross foreign exchange reserves to about four months of imports.
41. The attainment of these medium-term objectives would involve a sound policy
mix of monetary, fiscal and debt management policies as described in the following
sections.
Fiscal Policy
42. Mr Speaker, our Government is committed to strengthen fiscal policy. As part
of measures to achieve this, my ministry is streamlining the chart of accounts and
budget codes to better align expenditure allocations to fully costed activities. This will
allow easy monitoring of allocation releases and budget implementation by all
stakeholders. Transfers to Local Councils will be enhanced to improve service delivery
in rural areas. Critical poverty reducing programmes in health, education and social
protection will continue to receive substantially higher appropriations despite increased
capital spending.
43. Domestic revenue collection efforts in 2014 and the medium term will focus
on (i) broadening the tax base; (ii) reducing customs and GST duty waivers; (iii)
combating tax evasion; (iv) enhancing transparency and accountability in revenue
collection, (v) strengthening enforcement and compliance and (vi) strengthening
revenue administration through administrative reforms including use of advanced
information technology. A specialised Unit for the administration of revenues from the
Extractive Industries will be established at the National Revenue Authority (NRA).
Monetary Policy
44. Mr. Speaker, Honourable Members, the primary objective of monetary policy
will focus on achieving low inflation. To this end, the Bank of Sierra Leone will continue
to rely on Open Market Operations (OMO) in the implementation of monetary policy.
To strengthen its operations, Government has allocated the sum of Le11.4 billion to
recapitalize the Bank of Sierra Leone to enhance its implementation of monetary policy
as well as improve its operating environment through the rehabilitation of dilapidated
infrastructure.
45. Going forward, the Bank of Sierra Leone, in collaboration with the Ministry of
Finance and Economic Development (MoFED), will implement reform measures geared
towards improving the efficiency of the securities market. As the prospects of issuing
a two to three year bond denominated in domestic currency to support the financing
of infrastructure projects is receiving our attention, the Bank of Sierra Leone will
develop guidelines for primary dealer system that will facilitate trade in government
securities. An issuance calendar will also be prepared to enhance the success of issue
and encourage active liquidity management in the banking system. This will also
promote greater transparency in the banking sector.
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Payments Systems Development
46. Mr. Speaker, Honourable Members, during the year, all four compenents of the
West African Monetary Zone (WAMZ) payments systems project were implemented and
gone live. These include the Core Banking Application (CBA), the Automatic Cheque
Processing/Automated Clearing House (ACP/ACH), the Real Gross Time Gross
Settlement (RTGS), and the Scriptless Security Settlement (SSS).
47. The completion of the Payments Systems Project has contributed immensely
towards enhancing efficiency in the payments system through its capability to support
transactions on real time basis. It has also shortened the clearing and settlement lags,
in the payment system as well as strengthened credibility and confidence in the
intermediation role of the banking system thereby promoting private sector development
and growth consistent with the vision of the Agenda for Prosperity.
48. In an efforts to guarantee a smooth and uninterrupted provision of secure,
resilient, convenient, reliable and efficient payment services to the economy under the
project, the Bank of Sierra Leone has constructed a state of the art disaster recovery
site which, will serve as an alternative site located elsewhere for the operation of the
system in the event of contingency.
Public Debt Management
49. Mr. Speaker, Honourable Members, as at end June 2013, Sierra Leone’s total
public debt stood at Le 6.0 trillion. Despite the increase in the stock of debt due mainly
to finance infrastructure, agriculture and human development projects, Government
recognises the importance of debt sustainability in the medium to long term.
50. In this regard, Mr. Speaker, I am pleased to inform this Honourable House that
a recent debt sustainability analysis conducted by the International Monetary Fund
showed that our external debt is sustainable in the medium to long term with moderate
risk of debt distress. The ratio of external debt to GDP of 24.2 percent is well below
the threshold of 40 percent. Thus, Government will continue to implement prudent
external borrowing policies by prioritizing highly concessional loans with a mix of nonconcessional
financing, especially for infrastructure projects with high rates of return.
51. As I announced earlier, Government’s stance to limit borrowing in the domestic
securities market resulted in a significant reduction in domestic interest payments.
In fact, the savings in domestic interest payments of over Le50 billion in the first half
of 2013 assisted our efforts to clear the mounting arrears on subscriptions to
international organisations.
52. To maintain the current momentum, Government, in collaboration with the
Bank of Sierra Leone, will lengthen the maturity profile of securities in 2014 by issuing
medium-term Treasury bonds. To enhance market participation, transparency and
communication to investors, the regular weekly Treasury bills auction and bond
issuance will be preceded by a quarterly Auction Calendar stating the volume of
domestic financing requirements of the Budget.
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V. THE PATH TO PROSPERITY- FIRST STEP
53. Mr. Speaker, Honourable Members, in keeping with the aspirations of our
people, following the successful Sierra Leone Conference on Development and
Transformation, we commenced work on the Agenda for Prosperity as the first five-year
road map towards the forward march to becoming a middle income country by 2035.
The vision is that our country would achieve (i) macroeconomic stability with private
sector export -led growth generating wide employment opportunities; (ii) a well
educated, healthy population; (iii) a well developed infrastructure; (iv) good governance
and rule of law; (v) gender equality; (vi) good environmental protection; and (vii)
responsible natural resource exploitation.
54. Mr. Speaker, Honourable Members, we are now setting for ourselves more
ambitious targets that would generate a major difference in livelihoods of all Sierra
Leoneans through more job opportunities, higher incomes and a vibrant business
sector. The target is annual per capita income growth of 4.8 percent and annual GNI
growth of 6.7percent to attain Middle Income status in 2035.
Minimum Wage in Government
55. Mr. Speaker, these ambitious targets will be meaningless unless they translate
into more money in the pockets of our workers and people. Hence, our desire to
translate growth of the economy into improved living standards for all Sierra Leoneans
remains our major objective. In this regard, Government is committing itself to paying
a living wage to all its workers by the end of 2017.
56. As a first step, I am today announcing a minimum wage in Government of Le 480,000
with effect from January 2014 for all public sector workers. The tax brackets would be
adjusted to ensure that workers are not worse-off as a result of this increase. We will
encourage the private sector and other stakeholders to explore the possibility of a catchup
in the short to medium term.
New Model for Economic Growth
57. Mr. Speaker, Honourable Members, one of the key impediments to our economic
growth has been the high interest cost of servicing our domestic debts. To put this into
perspective, in 2013 alone, domestic interest payments are projected to reach Le293.3
billion. This represents about 63 percent of our domestic capital budget from which
most of Government’s priority projects are being financed. On the Goods and Services
budget, the projected Le 293.3 billion in domestic interest payment exceeds the total
allocation to the social and economic sectors which are responsible to implement
effective service delivery programmes in Education, Health, Social Welfare, Agriculture,
Works, Fisheries and Transport. In essence therefore, despite efforts made during the
first half of 2013 to curb Treasury bills interest rates from double to single digits, the
current level of our domestic debt though sustainable is still high and hence the
associated financing costs crowds out allocations to priority sectors in the budget.
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58. We have observed that over the years, Government has been borrowing at the
short-end of the securities market to finance critical projects and programmes thereby
resulting in high interest costs. We also observed that the Commercial Banks have not
been innovative in carrying out their basic intermediation function, which is to mobilise
resources and provide credit to the private sector to stimulate economic growth.
Rather, they have been heavily dependent on the Government securities market as
their major source of revenue. As a result, even individuals with disposable incomes
and enterprises have also not been innovative as they prefer placing their surplus funds
only in Government securities instead of investing in economic activities.
59. Mr. Speaker, Honourable Members, as a result of the foregoing, Government
would target the soft side of our development agenda to be economically inclusive as
explained under the three core pillars of Economic Diversification, Global Competitiveness
and Acceleration of Human Development. Government will facilitate economic
expansion by providing the requisite framework and incentives that would allow
ordinary Sierra Leoneans to participate in our economic development programmes. In
this regard, the following strategies would be implemented:
(i) Government will develop structured medium to long term bonds with a clear
auction calendar for open trade;
(ii) Given current low interest rates across all tenures of Government securities,
the Ministry of Finance and Economic Development in collaboration with the
Bank of Sierra Leone will engage Commercial Banks to ensure that the
declining trend in all tenures in Treasury bills rate is reflected in their lending
rates to improve acess to credit.
(iii) The Ministry of Finance and Economic Development in collaboration with the
Bank of Sierra Leone will explore the possibility of establishing Islamic Banking
(non-interest banking) in the medium term;
(iv) The Stock Exchange would also be strengthened to encourage more private
companies to be listed. This will be done through the establishment of the
Securities and Exchange Commission;
(v) Government will resuscitate the National Development Bank to facilitate
medium and long-term investments especially in agro-industry. The African
Development Bank has consented to provide technical assistance towards the
resuscitation of this bank and other development partners have been encouraged
to perticipate. To this end, the sum of Le 2.4 billion has been allocated as
Government’s seed money towards resuscitating the National Development
Bank.
(vi) The Ministry of Finance and Economic Development will work in collaboration
with the Ministry of Trade and Industry to effectively implement the activities
in the Local Content Policy especially those relating to Doing Business
Reforms.
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VI. THE 2014 BUDGET
Revenue Projections
60. Mr. Speaker, Honourable Members, domestic revenue is projected at Le 2.58
trillion or 12.4 percent of GDP. Of this, income taxes are projected at Le 909.9 billion
or 4.4 percent of GDP. Corporate profit taxes will contribute Le 258.9 billion and personal
income taxes, Le 643.1 billion.
61. Goods and Services Tax (GST) are projected at Le 523.4 billion or 2.5 percent
of GDP. Of this, import GST will contribute Le 292.3 billion and Domestic GST, Le231.1
billion.
62. Customs and Excise Duties are projected at Le 650.4 billion or 3.1 percent of
GDP. Import duties will amount to Le 298.5 billion. Excise duty on petroleum products
is expected to amount to Le 304.1 billion. Other excise duties will amount to Le 31.3
billion. Freight levy will amount to Le 16.4 billion.
63. Royalties and licenses from the mining sector are projected at Le 261.5 billion
or 1.3 percent of GDP. Royalty on iron ore is expected to amount to Le 153.4 billion.
Royalties on Diamonds and Gold, Bauxite and Rutile are projected at Le 47.5 billion
and Le 10.3 billion, respectively.
64. Royalties on fisheries are projected at Le 15.6 billion. Fees, licenses and other
charges collected by other Ministries, Departments and Agencies are expected to
amount to Le 93.5 billion. Dividends from parastatals are projected at Le 14.0 billion.
65. Road User Fees and Vehicle licenses are projected at Le112.9 billion.
66. To enable the National Revenue Authority achieve these targets set for 2014,
the Revenue Task Force will continue its regular meetings to clear bottlenecks that
would hinder revenue mobilization.
67. Total grants from our development partners will amount to Le 639.6 billion or
3.1 percent of GDP. Of this, our Multi-Donor Budget Support Partners group, including
the African Development Bank, the United Kingdom Department for International
Development (UK-DfID), the European Union and the World Bank will disburse Le 245.8
billion. Project grants are expected to amount to Le 422.4 billion.
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Expenditure Projections
68. Mr. Speaker, Honourable Members, total expenditure and net lending will
amount to Le 4.15 trillion or 20.0 percent of GDP. Recurrent expenditure will amount
to Le 2.6 trillion or 12.6 percent of GDP.
Wages and Salaries
69. Mr. Speaker, Honourable Members, Wages and Salaries are projected at Le 1.36
trillion or 6.6 percent of GDP. The provision for Wages and Salaries will accommodate
the minimum wage of Le 480,000 per month I announced earlier for public sector
workers and will also allow a minimal structured salary increase for higher grades in
the Public Service. In addition to this, the minimum gross monthly salary for Teachers,
Police and the Military would be Le 600,000 with effect from January 2014. The increase
in the wage bill for 2014 will also finance an 85 percent increase in gross salaries to
Members of Parliament. Finally, the Ministry of Finance and Economic Development
in collaboration with the Ministry of Local Government and Rural Development will put
modalities in place to start paying monthly salaries to Paramount Chiefs in 2014.
70. Total interest payments are projected at Le 339.7 billion or 1.6 percent of GDP.
Domestic interest payments will amount to Le 300.8 billion and foreign interest
payments, Le 39.0 billion.
71. Non-salary, non-interest recurrent expenditures will amount to Le 914.4
billion or 4.4 percent of GDP. Of this, expenditure on Goods and Services is expected
to amount to Le 590.8 billion or 2.8 percent of GDP.
72. Capital expenditures are projected at Le 1.54 trillion or 7.4 percent of GDP.
Foreign funded capital projects will amount to Le 1.1 trillion or 5.1 percent of GDP.
Development partners are expected to disburse Le 633.7 billion as loans and Le 422.4
billion as grants to fund capital projects. For domestically funded projects, Government
will provide Le 536.1 billion from internally generated resources.
Expenditure Allocations
Pillar 1: Economic Diversification
73. Mr. Speaker, Honourable Members, the over-reliance on one or a few sectors
poses risks to sustainable and inclusive economic growth, job creation and poverty
reduction. Economic growth in our country has not led to significant reduction in
unemployment due to the lack of diversification.
74. In order to achieve sustainable and inclusive growth and create employment
opportunities, we will focus our attention on the sectors that have the potential to
generate long term sustainable and inclusive green growth. Our strategies will focus
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on agriculture (both small and large scale, subsistence and cash crops), fisheries,
manufacturing and tourism. In all these sectors, Government will work to remove
constraints including improving access to finance and seeking foreign investments,
marketing and export support, research and extension as well as institutional support.
75. In support of economic diversification, Government is allocating an amount of
Le 32.1 billion to support activities in the agricultural value chain, including food
production and processing; livestock development; and extension services. Le14.1
billion will be transferred to Local Councils to support agricultural activities. An amount
of Le 2.8 billion is allocated to the Sierra Leone Agricultural Research Institute (SLARI)
to enhance its research activities.
76. Development partners, including the African Development Bank (AfDB),
Islamic Development Bank, International Fund for Agricultural Development (IFAD)
and the World Bank have committed an amount of US$ 166.2 million to support various
projects in the agricultural sector. Government’s contribution to donor funded projects
amounts to Le 8.6 billion.
77. The Fisheries sector is allocated Le 1.5 billion to support artisanal fishing and
the operationalisation of the fish testing laboratory. Government is also allocating an
amount of Le 2.2 billion to promote aqua-culture and support the European Fish
Certification Project. Transfers to local councils for fisheries activities will amount to
Le140.0 million.
78. Development partners, including the World Bank, European Union and the
ECOWAS Bank for Investment and Development (EBID), will disburse US$ 18.1 million
to support activities in the fisheries value-chain. Government is allocating Le 600
million as contribution to donor-funded projects in the fisheries sector.
79. Mr. Speaker, Honourable Members, in support of our goal for an eco-friendly
tourism sector that can compete with our neighbours, the Tourism sector will receive
Le 2.2 billion. Of this, Le 675 million is for the National Tourist Board to undertake the
development and implementation of a Tourism Marketing Strategy. In addition, Le1.4
billion will fund the Lumley Beach Development Project and the Monuments and Relic
Development project as part of efforts to promote eco-tourism.
Pillar 2: Managing Natural Resources
80. Mr. Speaker, Honourable Members, the prudent management of our natural
resources, both renewable and non-renewable, is central to achieving sustainable
green growth. The vision defined in the Agenda for Prosperity relies heavily on use of
our natural resources as the initial driver of rapid growth, particularly minerals and
probably petroleum. It has the potential to generate significant revenues but can also
distort development in various ways if not properly managed.
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81. To ensure the prudent management of natural resource revenues, Government
will establish a Transformation and Development Fund (TDF). All natural resources
revenues will be deposited into the TDF, which will be used to finance transformational
projects, stabilize Government expenditures especially during years when revenues
are less than expected and to save for future generations.
82. Also, the environment continue to face challenges from ongoing human
activities. To address these challenges, Government is allocating an amount of Le 2.4
billion to the Ministry of Lands, Housing and the Environment to inter alia develop land
use policy; Ministry of Mines and Mineral Resources, Le1.7 billion to support the
formulation of Mines and Minerals policies. The National Mineral’s Agency is allocated
Le 3.5 billion to ensure the implementation of the mining legislations and regulation
of mining activities; the Sierra Leone Environmental Protection Agency, Le145 million;
the Forestry Division, Le 837 million; the Sierra Leone Maritime Agency, Le 980 million;
and the Meteorological Department, Le 650 million to support various climate and
environment related activities.
83. Development partners, including the Africian Development, World Bank,
European Commission, United Kingdom’s Department for International Development
(DfID), have committed US$ 3.6 million to support various projects in the Mining Sector,
including the Sierra Leone Extractive Industries Technical Assistance and Advisory
Project. The World Bank has also committed US$ 3.9 million to support the Wetlands
Conservation and Biodiversity Conservation projects. Government’s contribution to
donor funded projects in the mining sector amounts to Le 1.3 billion.
Pillar 3: Human Development
84. Mr. Speaker, Hon. Members, as emphasized by the President, our objective is
to develop human capital to empower our people to reduce poverty as well as accelerate
the attainment of the Millennium Development Goals following significant strides
during 2008 – 2012.Government plans to improve quality and access to education;
provide extensive health services; control HIV/AIDS; provide safe drinking water and
improved sanitation; reduce urban migration and mainstream gender parity.
85. In keeping the promise of His Excellency, the President to the Youths,
Government allocates to the Ministry of Education, Science and Technology an amount
of Le 168.9 billion. Of this, Le 105 billion is allocated to fund tuition fees subsidies for
students of Njala University, Fourah Bay College, College of Medicine and Allied Health
Sciences (COMAHS) and Institute of Public Administration and Management (IPAM).
Grants to tertiary educational institutions amount to Le 29.4 billion. Of this, Grants
in Aid to students is Le 9.2 billion that will benefit about 2,500 students in Tertiary
Educational Institutions; examinations fees for WASCE, Le 5.7 billion, benefitting about
42,600 students; and Girl Child programme, Le 7.5 billion, which will benefit about
132,000 girls.
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86. Transfers to Local Councils for education services will amount to Le 29.1 billion.
Of this, Le 3.3 billion is examination fees for NPSE, which will benefit 94,000 pupils;
Le 10.2 billion for School Fees Subsidy; Le 1.2 billion for teaching and learning materials
and Le 1.7 billion for text books for primary schools; Le 4.2 billion as examination fees
for BECE, which will benefit 76,000 pupils; and Le 650 million for science equipment
and Le 1.5 billion for text books for secondary schools. In addition, an amount of Le 1.5
billion is allocated to Government Libraries and an additional Le 2.5 billion for
educational development.
87. Development partners, including the Arab Bank for Economic Development in
Africa (BADEA), OPEC Fund for International Development (OFID), Islamic Development
Bank (IDB), Saudi Fund for Development (SFD) and the World Bank will disburse US$
59.5 million to support various projects in the education sector, including the
rehabilitation of Fourah Bay College and the construction of Technical Vocational
Institutes in Kambia, Pujehun, Masingbi, and Kono. Government is also allocating an
amount of Le 2.1 billion to fund the rehabilitation of the Port Loko Teachers College
as well as the establishment of the University of Science and Technology in Magburaka.
88. Mr. Speaker, to improve the health of the population, the Ministry of Health and
Sanitation is allocated an amount of Le 99.1 billion. Of this, Le 36.8 billion is for (i)
improving access and quality of basic health services, including malaria, HIV/AIDS,
Tuberculosis and Leprosy prevention and control; (ii) Le 24.8 billion for reproductive
and child health care services, including Le 20.1 billion for the Free Health Care
Programme; and Le 18.1 billion for Tertiary Health Care Services (National and Referral
Hospitals) including Le 8.0 billion for the procurement of drugs and medical supplies.
89. A total of about US$ 63.2 million will be provided by the World Bank, IDB, Kuwait
Fund, Global Fund, GAVI Alliance, and BADEA to support various health projects,
including the Reproductive Child Health Project, the Maternal Child Health Project;
the three Tertiary Hospitals Projects in Freetown that will transform Connaught,
Princess Christian Maternity and Ola During Hospitals and the Primary Health Care
Support Project in Bombali and Port Loko Districts. Government is providing an amount
of Le 2.0 billion for the refurbishment of Government Hospitals. An amount of Le 4.4
billion is also provided as our contribution to the donor-funded projects.
90. Government will transfer an amount of Le 17.8 billion to Local Councils for the
delivery of devolved health services in local communities.
91. Mr. Speaker, Honourable Members, as part of our efforts to improve access to
pipe borne and safe drinking water, including building capacity and improving
institutional and regulatory framework, the Government is providing an amount of
Le 7.1 billion to the Ministry of Water Resources. Of this, Le 5.1 billion is Grants to
SALWACO.
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92. In support of these efforts, the African Development Bank is providing an
amount of US$ 37.3 million for the Three Towns Water Supply and Sanitation Project
in Bo, Kenema and Makeni and another US$ 43.7 million for the Rural Water Supply
and Sanitation Projects in Bonthe, Pujehun, Kono, Kambia and Koinadugu Districts.
The IDB and BADEA are providing US$ 13.1 million for the Kabala Water Supply Project.
93. Government is also providing an amount of Le 9.7 billion for the rehabilitation
of water supply in selected towns and Le 3.1 billion to improve access to portable water
in selected areas in the Western Area.
Pillar 4: International Competitiveness
94. Mr. Speaker, Honourable Members, the 2013 Global Competitiveness Report
reveals that while Sierra Leone’s competitiveness index improved slightly from 2.8 in
2012 to 3.0 in 2013, the country faces significant challenges that undermine its ability
to compete in the regional and global markets. To address these, Government, in
addition to investing in infrastructure, will continue to implement institutional and
regulatory reforms to improve the competitiveness of our economy.
Infrastructure
95. Mr. Speaker, Honourable Members, infrastructure creates jobs, support trade
and improve productivity. In this regard, Government will continue with its infrastructure
development programme by investing additional resources on roads, energy, and
Information, Communications Technology (ICT). The detailed allocations under each
category are described below.
Roads
96. Mr. Speaker, to sustain our current road maintenance programme, Government
is allocating an amount of Le 112.9 billion to the Road Maintenance Fund Administration.
Of this, an amount of Le 94.7 billion is for road maintenance activities only.
97. Le 254.1 billion is for the rehabilitation and reconstruction of several trunk
roads, including the Makeni-Kamakwe-Madina-Oula road; Mange-Mambolo and Rukupr
Spur; Bandajuma-Pujehun road; Taiama Junction-Njala University road and the
Bandajuma-Pujehun road. In addition, Government is providing another Le 156.6
billion for the rehabilitation of streets in Freetown and District Headquarter Towns,
including the widening of the Hillcut Junction-Pademba road into Dual Carriage Way,
the rehabilitation of Bottom Mango Signal Hill-Congo Cross road; the Hill Side Bye-pass
road and the Lumley-Tokeh road.
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98. Development partners, including the European Commission, AfDB, IDB,
Kuwait Fund, Saudi Fund, and OFID have committed US$ 337.1 million for various
trunk road projects in the country. These include the Kenema-Pendembu, the
Pendembu-Kailahun, Port Loko-Lungi, Matotoka-Yiye, and Yiye-Sefadu, the Moyamba
Junction-Moyamba and the Bandajuma-Mano River Union Bridge, Makeni-Kabala,
Lumley Beach , Rue de La Paix and the widening of bridges along the Masiaka-Bo road.
99. Government contribution to donor funded road projects amount to Le 93.0
billion. Additionally, Government will provide funds to conduct various road studies
including Matotoka-Yele-Bo and Mile 91-Magburaka roads as well as various
compensation payments.
100. Development partners, including the World Bank, European Commission and
the German Development Cooperation, are also providing US$ 3.1 million for the
construction of feeder roads. Government is providing an amount of Le 500 million as
its contribution to the construction of feeder roads.
Housing
101. To save Government an estimated Le 3.0 billion paid annually as rent for
Government Offices, the sum of Le 8 billion is allocated in the capital budget to finance
the construction of new Government office buildings nationwide. In addition, Government
is providing Le 54.3 billion for the rehabilitation of various Government buildings.
102. Finally, to ease the problem of housing in the Western Area and in the
provinces, the sum of Le 1.1 billion is allocated in the capital budget to finance the
construction of 20 houses each in these areas under a Pilot Housing Scheme.
Energy
103. Mr. Speaker, Honourable Members, there has been a significant improvement
in electricity over the last few years. Yet, the demand for energy far exceeds supply.
With support from our development partners, Government is committing to improve
electricity supply particularly in the Western Area and the three Provincial Cities in
the medium term. The objective is to achieve a 24 hour uninterrupted supply in these
cities through a combination of improvements in the transmission and distribution
system; unbundling and restructuring the energy sector; participate in the West
African Power Pool; increase generation and transmission including the Barefoot Solar
Energy Strategy.
104. To achieve these objectives, Government is providing Le 80.6 billion to the
energy sector. Of this amount, Le 9.2 billion is for the Cote D’Ivoire, Liberia, Sierra
Leone and Guinea inter-connection project under the West African Power Pool Project;
Le 35.9 billion is for rebuilding the national transmission and distribution network; Le
20.4 for the procurement and installation of 20 Mega Watts of thermal plant for
Freetown; Le 4.0 billion for the rehabilitation of Bo-Kenema Power Services; and Le
2.0 billion to the Barefoot College Solar Programme to cover installation of solar panels
in households in several rural communities.
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105. The World Bank, European Commission, AfDB, IDB, EBID, United Nations
Industrial Development Organisation (UNIDO) and China Exim Bank are providing an
amount of US$ 206.9 million to support various projects in the Energy Sector, including
the West African Power Pool project US$ 140.3 million; the Unbundling and Restructuring
of the energy sector, US$ 54.0 million; and the rebuilding of the National Transmission
and Distribution Network, US$ 11.3 million.
Information, Communication Technology
106. Mr. Speaker, Honourable Members, the objective in the ICT sector is to ensure
that our country is fully integrated into the global village with affordable rates for mobile
phone usage and internet connectivity. In support of these objectives, development
partners will provide an amount of US$ 34.9 million to the ICT sector for the
modernization and expansion of the network and communication infrastructure of
Sierratel and other ICT projects, including the West Africa Regional infrastructure
programme; the ECOWAN programme, and the National Fibre Optic Backbone Project.
The Fibre Optic Backbone and other ICT Projects will enhance accessibility and
affordability to internet and other communication services. Government is therefore
providing Le 7.8 billion as its contribution to these projects.
Transport
107. Mr. Speaker, Government will continue to invest in the existing airport facility
by allocating Le 450 million for the completion of the modernisation of the Freetown
International Airport at Lungi. Additionally, plans are well advanced for the construction
of a second airport at Mamamah with support from China Exim Bank.
108. To ease the problem of transportation in the Western Area and country wide,
the Government will procure additional One hundred new buses for the Sierra Leone
Road Transport Corporation in 2014.
Project Preparation Fund
109. Mr. Speaker, Honourable Members, a Project Preparation Fund would be set
up to finance feasibility studies targeting inclusive economic growth. Over the years,
Government has lost an average of 24 months in coordinating feasibility studies with
development partners. Following the establishment of the Fund, studies will be
undertaken to, for example, establish fish farming across all the twelve districts
including the Western Area. This will engage women and youths in gainful employment
and will also improve on value addition through the creation of cold rooms. The Fund
will support feasibility studies in all other sectors.
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Institutional and Regulatory Reforms
110. Mr. Speaker, Honourable Members, I will now describe the specific institutional
and regulatory reforms that will improve our country’s competitiveness.
Access to Business Finance
111. Mr. Speaker, consistent with the Agenda for Prosperity, a Small and Mediumsized
Enterprises (SME) Development Strategy was recently formulated with support
from the International Finance Corporation (IFC) to address the constraints faced by
SMEs. Government will establish an SME Fund to support business entrepreneurial
skills, innovation, expansion and development as well as Youth and Women’s access
to credit.
112. With support from IFAD, the second phase of the Rural Finance and Community
Improvement Project to improve access to rural finance and enhance financial
inclusion will be launched in 2014, in order to consolidate the achievements made
under the first phase of the project. This project will support the establishment of nine
(9) Community Banks and twenty-three (23) Financial Services Associations (FSAs) to
provide financial services to our youths and women in the rural communities. The
Project will also support the establishment of an Apex Bank to provide supervisory
services to Community Banks and Financial Services Associations. The Apex Bank will
in turn be supervised by the Bank of Sierra Leone.
113. To improve on the effectiveness of the operations of Cooperatives, Government
is allocating Le900 million to provide financial support for cooperative groups nationwide.
Skills Development
114. Mr. Speaker, Honourable Members, the shortage of relevant skills has been
identified as a major constraint that undermines the competitiveness of our companies
and industries. While there are many Sierra Leoneans looking for jobs, many employers
cannot find workers with the right skills to match available vacancies. This is partly
explained by the fact that our training programmes have not been sufficiently aligned
to the skills employers need. This in turn has partly contributed to high level of the
unemployment especially among our youths and women.
115. To address this situation, Government will embark on the training of a highly
skilled, educated and productive work force to both increase employment as well as
enhance the competitiveness of the economy. In this regard, Government is establishing
a Skills Development Fund (SDF) for eligible Sierra Leoneans to undertake highly
specialised skilled, technical and vocational training programmes, for example,
paediatrics, heart surgery, mining engineering and aeronautical science. The details
and implementation arrangements of the SDF will be announced in due course.
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Regional Integration
116. Mr. Speaker, Honourable Members, Government will continue to participate
actively in efforts to increase regional integration with a focus on trade, infrastructure
development, financial markets, investment and business regulation and procedures
to improve our competitiveness and access to regional markets. In particular,
Government remains committed to the implementation of the ECOWAS Trade
Liberalisation Scheme (ETLS) and will complete the implementation of the ECOWAS
Common External Tariff (CET), including the recently approved fifth band.
Export Development
117. Mr. Speaker, Honourable Members, to enhance our exports, Government will
support various institutions involved in promoting export development in the country.
In this regard, Government is allocating Le 5.1 billion as institutional support for export
development. Of this, Le 1.2 billion to the Sierra Leone Standards Bureau; and Le
1.6 billion to the Sierra Leone Investment and Export promotion Agency (SLIEPA) to
enhance their operations. Government will also establish an Export Development
Fund for the promotion and diversification of our exports including the provision of
financial support for SMEs, Women and Youth Groups, Cooperatives and other
organizations engaged in export-related activities.
Pillar 5: Labour and Employment
118. Mr. Speaker. Honourable Members, employment is crucial for poverty
reduction and pro-poor growth. In this regard, Le 270 million is allocated to the Ministry
of Labour and Social Security for the strengthening of the legal and institutional
framework for labour administration
119. Le 400 million is also provided to the Ministry for the creation of job centres
and Le 1.5 billion to the Ministry of Youth Affairs as our contribution to the World Bank
supported Youth Development and Capacity Building under the Youth Employment
Support Project.
Pillar 6: Social Protection
120. Mr. Speaker, Honourable Members, we are faced with a major development
challenge to translate growth into substantial reduction in poverty, inequality and
vulnerability to risks. In this regard, Government, with support from our development
partners, will work to reduce these inequalities through expansion of services coupled
with social protection measures for the poorest and marginalised.
121. The Ministry of Social Welfare, Gender and Children’s Affairs is allocated an
amount of Le 7.6 billion. Of this, Le 4.0 billion is to support various social protection
services including grants to welfare institutions, the Disability Commission, diet for
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Approved Schools and Remand Homes, and social development programmes. Le 1.3
billion is also allocated to support gender and children’s programmes including the
Campaign Against Teenage Pregnancy. In addition, Government is allocating Le 1.7
billion to the Children’s Commission.
122. Le 2.0 billion is allocated to the Ministry of Labour and Social Security for cash
transfers to the aged and vulnerable persons. Le 1.8 billion is allocated to Local Councils
for the implementation of social welfare services and for gender and children’s services
at the local level.
123. In collaboration with the World Bank, the preparation of a National Social Safety
Net Project estimated at $11.0 million which will be implemented in 2014 is almost
complete. Government will contribute about Le4.0 billion to this project. The project
will provide direct cash transfers to 22,000 extremely poor households and will
specifically target women to ensure that benefits accrued to disadvantaged women,
pregnant and lactating mothers and young children will support disadvantaged
households. This will put money in our people’s pockets, help our youths and women.
124. Government is also allocating an amount of Le 680 million for the rehabilitation
of Remand Homes and Approved Schools. An amount of Le 930 million is allocated as
our contribution to Social Protection projects implemented by National Commission for
Social Action ( NaCSA). The IDB is providing US$ 23.4 million for the implementation
of various community-driven and social action projects implemented by NaCSA. These
will benefit our youth and women.
National Health Insurance Scheme
125. Mr. Speaker, Honourable Members, in keeping with the intent to look after the
health of Sierra Leoneans, for the first time in our history as a people, Government
will establish a National Health Insurance Scheme to facilitate access to health
services. In this regard, Government is allocating an amount of Le 3.5 billion to the
Ministry of Health and Sanitation, which will be utilized in collaboration with NASSIT
to pilot a Health Insurance Scheme in the country.
Pillar 7: Governance and Public Sector Reforms
126. Mr. Speaker, Honourable Members, the strategic objective of this Pillar is to
continue to promote good governance and build the capacity of our public sector and
governance institutions and functionaries to deliver effective and efficient public
services. Areas of emphasis include capacity building of state and non-state actors;
improved justice; safety and security; delivery systems; and the fight against
corruption.
127. In this regard, Government will continue to strengthen the Anti- Corruption
Commission to collaborate with other oversight institutions to mainstream anticorruption and transparency mechanisms in public financial management. To this end,
Government is allocating Le 3.6 billion to the Anti-Corruption Commission to enhance
its operations.
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Public Enterprise Reform
128. Mr. Speaker, Honourable Members, the norm is for public enterprises to
contribute to the national budget. This is the situation in other African countries. On
the contrary, in Sierra Leone, public enterprises constitute a persistent drain on the
Government budget. This situation cannot be allowed to continue. As a first step,
MoFED in collaboration with the National Commission for Privatisation (NCP) is
carrying out a diagnostic study of the operations of public enterprises with a view to
ensuring their operational and financial independence. Government will wean off
these institutions from the budget and strengthen them to pay dividends to the budget.
Strengthening National Security
129. Mr. Speaker, Honourable Members, a stable security situation is critical for
economic growth and prosperity. In support of this, Government is providing Le 70.6
billion to the Ministry of Defence. This allocation from the recurrent budget includes
Le17.3 billion for rice supplies to officers and other ranks, Le16.8 billion for the
procurement of military vehicles and Le 9.2 billion for drugs and medical supplies. In
addition to this, the sum of Le16.3 billion is allocated in the capital budget towards the
construction of a new military barracks and Le 5 billion for the rehabilitation of existing
facilities.
130. The sum of Le 67.6 billion is allocated from the recurrent budget to the Sierra
Leone Police, including Le16.7 billion for rice supplies to officers and other ranks and
Le 5.3 billion for the procurement of police vehicles. In addition to this, the sum of Le1.4
billion is allocated in the capital budget towards the construction of a Police Academy,
Le 6.7 billion for the procurement of security scanners and Le 1.5 billion for the
rehabilitation of existing facilities.
131. The sum of Le 25.7 billion is allocated from the recurrent budget to the Prisons
Department. Of this amount, Le12 billion is for Prisoners welfare which includes the
provision of diets, toiletries and drugs supplies, Le 6.6 billion for procurement of
uniforms and regalia for Prison Officers and Le 2.7 billion for rice supplies to officers
and other ranks. In addition, Le 5.8 billion is allocated in the capital budget for the
procurement of security hardware for the Prisons Department.
132. The sum of Le 6.7 billion is allocated from the recurrent budget to the National
Fire Force. In addition, Government is also providing Le 3.3 billion to the Office of
National Security and Le 2.3 billion to the Central Intelligence and Security Unit to
strengthen their operations.
133. An amount of Le 17.8 billion is allocated to the Ministry of Internal Affairs. Of
this, Le 4.4 billion for the National ID Cards System; Le 8.9 billion for the Machine
Readable Passport Project; and Le 4.5 billion for the establishment of an Integrated Civil
Register and Multi-purpose National ID Cards.
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Public Financial Management (PFM)
134. Mr. Speaker, Honourable Members, as part of our commitment, Government
will establish a strong PFM strategy to ensure that overall fiscal policy is strengthened.
In this regard, to consolidate achievements under the Integrated Public Financial
Management Reform Project, a medium-term public financial management reform
strategy supported by our development partners, including the World Bank, AfDB, DfID
and the EC has been formulated. This formed the basis for the successor project–the
PFM Improvement and Consolidation Project. The objectives of the successor project
are to enhance budget planning and credibility; financial controls; accessibility and
parliamentary oversight in public finances. The project will also support, inter alia,
improvements in budget formulation, strengthened public investment management,
establishment of a Single Treasury Account and enhancing the analytical and
dissemination capacity of civil society for advocacy and scrutiny in the use of public
resources
135. Mr. Speaker, to strengthen governance and accountability, Government is
providing Le 2.1 billion to the National Public Procurement Authority; Le 4.0 billion to
Audit Service Sierra Leone; and Le 65.2 billion to the National Revenue Authority (NRA)
to support their various activities.
Treasury Single Account
136. Mr. Speaker, Honourable Members, the existence of multiple bank accounts
and off-budget funds of Ministries and subvented agencies, including funds from donor
projects outside the Consolidated Revenue Fund poses significant challenges to fiscal
control and cash management. To address this, Government is establishing a Single
Treasury Account (TSA) that will bring all Government accounts under the control of
the Accountant General. This will eliminate idle cash balances in Government
accounts and reduce the need for Ways and Means Advances from the Bank of Sierra
Leone.
137. To support the implementation of the Treasury Single Accounts system, the
Ministry of Finance and Economic Development will consolidate all off-budget revenues
collected by other Agencies into the Consolidated Revenue Fund and agree on
automatic transfer modalities with the affected Agencies and the Bank of Sierra Leone
on the proportion of funds that should be transferred for their operations.
Budget Execution
138. Mr. Speaker, Honourable Members, to strengthen budget execution in 2014,
the following measures would be put in place:
(i) As we move towards activity based budgeting systems, performance coordinators
would be appointed in each MDA to monitor performance contracts of Ministers
and Senior Government officials;
(ii) Recurrent budgetary allocations would be tied to performance on the
implementation of CPIA, Performance Assessment Framework (PAF), IMF
structural benchmarks and Millennium Challenge Co-operation (MCC) triggers
for all affected MDAs;
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(iii) Technical assistance would be sought on how we can reduce bureaucracy
across Government; and
(iv) The Ministry of Finance and Economic Development would be restructured to
make it a closed professional Ministry that would enable it to efficiently design
and implement sound macroeconomic policies.
Strengthening National Statistical Systems
139. Mr. Speaker, Honourable Members, the overall policy goal is for Statistics Sierra
Leone to coordinate, collect, compile, analyse and disseminate high quality and
objective official statistics to support informed decision making.
140. To this end, Government is providing Le 7.9 billion to Statistics Sierra Leone
to cover the regular activities of data collection and analysis. In addition, Le 18.6 billion
is provided for the implementation of the National Population and Housing Census, the
Demographic and Health Survey and the Labour Market Survey.
Promoting Democracy and Human Rights
141. Mr. Speaker, Government is allocating an amount of Le 920 million to support
the activities of the National Commission for Democracy to create the conditions for
citizens to be properly educated on the constitution, democratic good governance and
principles. For the conduct of bye-elections and election related activities, Government
is allocating Le14 billion to the National Electoral Commission.
142. To promote and protect human rights, Government will enhance its support to
the Human Rights Commission to build its capacity, extend its regional outreach and
promote human rights education. To this end, Government is allocating an amount of
Le 1.5 billion to the National Commission for Human Rights.
Strengthening the Judiciary
143. Mr. Speaker, Honourable Members, an effective judicial system is an important
element of good governance and contributes to strengthening investor confidence. In
this regard, Government will continue with efforts to improve the judicial system to
make justice more accessible and affordable. Thus, Government is allocating an
amount of Le 3.7 billion to the Law Officers Department to achieve these objectives.
Of this, Le 2.1 billion is to the Constitutional Review Committee Secretariat; Le 727.5
million to the Supreme Court; Le 570.0 million to the Court of Appeal; Le 1.1 billion to
the High Court; and Le 615 million to the Law Reform Commission.
144. In support of our efforts, the International Finance Corporation is providing an
amount of Le 6.9 billion for the Fast Track Commercial Courts. DfID will also provide
Le 2.5 billion to support the Access to Security and Justice Programme. The IFC will
also disburse Le 4.2 billion for the modernisation of the Office of the Administrator and
Registrar General. Government is also providing Le 1.2 billion for the construction of
Local Courts nationwide.
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Parliamentary Oversight
145. Mr. Speaker, Honourable Members, the role of Parliament is critical to the
implementation of the Agenda for Prosperity as Parliament has the mandate to provide
requisite oversight to programmes and projects in the Agenda for Prosperity. In this
regard, Government will strengthen the operational capacity and effectiveness of the
Public Accounts Committee, the Public Finance Committee and the Transparency
Committee to scrutinize the national budget, fiscal and audit reports as required by
law. In support of these activities, Government is allocating Le 6.1 billion to Parliament.
Of this, Le 1.5 billion is for the Parliamentary Service Commission.
Constituency Development Fund
146. Mr. Speaker, Honourable Members, Government will establish a Constituency
Development Fund (CDF) as a widely acceptable practice. Government is allocating
Le7.8 billion to the Constituency Development Fund to support Members of Parliament
deliver projects in their respective constituencies. This will complement Government’s
efforts in community development. The disbursement modalities of the CDF will be
announced in due course.
Public Sector Reforms
147. Mr. Speaker, Honourable Members, the reform of the public sector will focus
on the following four components: (i) Recruitment and Right-Sizing which focuses on
creating a competent public service with the right size and skills mix to deliver core
functions; (ii) Pay of Public Servants that involves the implementation of a multi-year
pay reform and sound payroll management to attract and retain competent skills; (iii)
Performance Management aimed at improving the performance and productivity of
public servants in order to strengthen accountability and increase citizen’s trust and
confidence in Government; and (iv) Institutional Strengthening to ensure that public
sector institutions including Human Resources Management Office (HRMO), Public
Service Commission, Public Service Academy and the Civil Service Training College
have the right structure, systems and processes to deliver quality services.
148. To support the implementation of this programme, Government is providing an
amount of Le 2.2 billion to the implementing institutions. The World Bank is providing
US$ 8.2 million in support of the Public Sector Pay and Performance Project.
149. To regularise the setting of salaries and eliminate disparities in salaries across
the public sector especially subvented agencies, Government will set up the Salaries
and Wages Commission in 2014. The Commission will harmonize the various pension
laws and implement the 2011 Cabinet Directive on the implementation of the Pay
Reform Programme. The Commonwealth Secretariat would provide technical assistance
to the Government of Sierra Leone in setting up of this Commission.
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Strengthening Local Governance
150. Mr. Speaker, Honourable Members, the effective decentralisation of Local
Governance is a prerequisite for delivering the Agenda for Prosperity. In this regard,
Government will deepen the decentralisation process by building on the achievements
to date while addressing remaining challenges. Local Councils will be empowered to
take on more responsibilities to ensure that the disbursement of resources is linked
to achievement of measurable targets. In support of these, the Ministry of Local
Government and Rural Development is allocated Le 3.1 billion, of this Le 741 million,
Le 722 million and Le 825 million are for Southern, Eastern and Northern regional
offices, respectively.
151. Government will also provide Le 13.9 billion to Local Councils to complete ongoing
projects.
Foreign Affairs and International Cooperation
152. To continue to strengthen our relationship with the international community
and international and regional organisations, the Ministry of Foreign Affairs and
International Cooperation is allocated an amount of Le 27.8 billion which includes US$
120,000 each for 15 Foreign Missions for the procurement of representational cars and
utility vehicles.
Relationship with our Development Partners
153. Mr. Speaker, Honourable Members, our development partners have continued
to play a very crucial role in our development agenda. We want to acknowledge the
support we received from all of our partners during the implementation of the Agenda
for Change and the firm commitments that they have made to support the Agenda for
Prosperity. To strengthen our relationship with development partners, the Mutual
Accountability Framework will be the key guide in the implementation of programmes
and projects. Other International Non-Governmental Organizations are also encouraged
to be part of this framework by synchronising their respective activities with the
relevant MDAs they are working with. Also, we would develop a project management
portal for mutual tracking and management of projects.
Pillar 8: Gender Equality and Women’s Empowerment
Women and Youth Empowerment Fund
154. Mr. Speaker, Honourable Members, institutionalised gender inequalities are
exacerbated by discriminatory customs particularly in relation to marriage, property
rights and sexual offences. The goal of the Agenda for Prosperity is to empower women
and girls through education, increasing participation in public institutions and access
to justice and economic opportunities.
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155. To this end, Government for a start is allocating Le 800 million for the
establishment of a Women and Youth Empowerment Fund. In addition, all programmes
implemented in each of the priority Pillars in the Agenda for Prosperity will be done
through a gender and youth lens as gender and youth issues have been mainstreamed
in all Pillars.
156. Ministries, Departments and Agencies of Government would have to come up
with innovative projects to support women and youth empowerment to access this Fund.
The Ministries of Gender and Children’s Affairs and Youth Affairs will manage this
Fund in collaboration with the Ministry of Finance and Economic Development.
IX. RISKS TO THE IMPLEMENTATION OF THE BUDGET
157. Mr. Speaker, Honourable Members, this ambitious agenda we have set
ourselves may face risks in its implementation. I must emphasize that some of these
risks are outside our control. These include: (i) possible collapse of international
commodity prices, especially iron ore, which will reduce the revenue needed to fund
the Agenda for prosperity; (ii) future external shocks such as oil and food price inflation
that could complicate execution of the budget; and (iii) the capacity of the public sector
to deliver programmes.
158. To manage and mitigate these risks, my Ministry will strengthen the economic
team to generate proposals for managing the potential effects on the Agenda for
Prosperity if the risks are identified. The membership of the economic team will be
announced in due course.
X. CONCLUSION
159. Mr. Speaker, Honourable Members, this is a focused budget, which has
established a number of specialised Funds to facilitate the delivery of the Agenda for
Prosperity. These Funds include: the SME Fund, Skills Development Fund, Export
Diversification Fund, Women and Youth Empowerment Fund, Transformational
Development Fund, Project Preparation Fund, and Constituency Development Fund.
I would like to encourage our Development Partners and the Private Sector to contribute
to these Funds.
160. Mr. Speaker, Honourable Members, I would like to conclude this statement by
thanking all our development partners, especially the African Development Bank, the
Chinese Government, United Kingdom Department for International Development,
United States Agency for International Development the European Commission,
Islamic Development Bank, ECOWAS Bank for International Development, Arab Bank
for Economic Development in Africa, World Bank, United Nations Development
Programme and other United Nations Agency, German Development Cooperation, Irish
Aid, Saudi Fund, Kuwaiti Fund and OPEC Fund for International Development. I would
also like to thank my colleague Ministers in Government, the Ministers of State and
28
Deputy Minister in the Ministry of Finance and Economic Development, the Financial
Secretary, the Governor, Bank of Sierra Leone, staff of the Ministry of Finance and
Economic Development and the Bank of Sierra Leone including staff of the various
MDAs.
161. Mr. Speaker, I would like to particularly recognise the Chairpersons of the
Finance and Transparency Committees of Parliament, District Budget Oversight
Committee Members, civil society representatives, members of the print and electronic
media who participated in the open budget discussions at Port Loko. Their valuable
contributions and insights have shapened these budget proposals I have laid before the
House. As usual, the Government Printer rose to the occasion and produced the printed
Statement and Estimates on time.
162. Finally, Mr. Speaker, Honourable Members, in his message on the Agenda for
Prosperity, His Excellency the President Dr Ernest Bai Koroma had this to say and I
quote “Let me remind fellow Sierra Leoneans that we have together (Government and
every stakeholder) committed ourselves to Change. Because prosperity does not pour
like rain and will not come to us, we must go in search of it with determination. We
must sweat it out with our hands, with our brains and with our minds. Our Agenda for
Prosperity marks an end of the chapter of Business as Usual and the dawn of a new
Sierra Leone that set out to embrace the value of innovation, of cultural renewal in
the work place and respect for public goods, and the realisation that the end result of
this new beginning is the extent to which we double our efforts and commit ourselves
to the values of self reliance and discipline”. This budget sets out to bring the President’s
message to reality. I, therefore, commend it to the House.
163. I wish every Sierra Leonean a Merry Christmas and a Prosperous New Year.
164. God bless Sierra Leone and all of us.
BUDGET PROFILE
GOVERNMENT OF SIERRA LEONE
GOVERNMENT BUDGET
and
STATEMENT OF ECONOMIC AND
FINANCIAL POLICIES
For the Financial Year, 2014
Theme: “Improving the Livelihood of Youth, Women and our Workforce”
DELIVERED BY
DR. KAIFALA MARAH
Minister of Finance and Economic Development
in the Chamber of Parliament
TOWER HILL, FREETOWN
ON
Friday, 29th November 2013
at
10:00 a.m.

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