By zainab.joaque@awokonewspapersl.com
Freetown, Sierra Leone – Sierra Leone’s fiscal report for January 2025 reveals a surprising imbalance in government spending: while total expenditure fell significantly below budget expectations, external debt servicing costs surged beyond projections, raising concerns about debt sustainability and cash flow management.
According to the Accountant General’s January Fiscal Report, the government allocated NLe 26.6 million for external interest payments, but actual disbursements more than doubled to NLe 55.3 million—an overrun of NLe 28.7 million.
This spike in external debt payments stands in stark contrast to broader expenditure trends. The government’s total expenditure and lending were budgeted at NLe 2.92 billion, yet actual spending came in at just NLe 1.50 billion—a sharp under-expenditure of NLe 1.42 billion.
What the Numbers Reveal are that – External Interest Payments: Budgeted at NLe 26.6 million, actuals hit NLe 55.3 million, exceeding projections by over 108%.
- Domestic Interest Payments: Came in lower than expected at NLe 522 million, below the NLe 592 million allocation.
- Non-Interest Recurrent Expenditures: Budgeted at NLe 1.22 billion, actuals were NLe 824 million (shortfall: NLe 397 million).
- Capital Expenditures: A major underperformance, with only NLe 100 million spent against a planned NLe 1.08 billion, indicating a deficit of NLe 980 million in development investments.
Interestingly, despite the external debt overspend, the government posted a smaller-than-expected budget deficit. The fiscal deficit was projected at NLe 596 million, but actual operations resulted in a NLe 381 million deficit—yielding a favorable variance of NLe 215 million.
The data underscores a concerning trend: while the government is pulling back on key investments—particularly in capital development—it continues to face rising costs in servicing its external obligations. This suggests mounting pressure from existing debt agreements and highlights the need for tighter debt management and more strategic budgeting.
Business leaders and financial analysts will be watching how the Ministry of Finance responds in the coming months—especially whether capital project disbursements improve, and if external debt obligations continue to place strain on the national budget. ZIJ/14/4/2025
