Sierra Leone President Ernest Koroma takes extra-ordinary measures to safeguard the country’s economy and prevent further slowdown

President Ernest Bai Koroma - Inspiring change

President Ernest Bai Koroma – Inspiring change

In a move that will be seen by many as prudent, the Sierra Leone President, Ernest Bai Koroma has taken extraordinary measures to safeguard the country’s economy and prevent further slowdown  and position it for a swift recovery.

The President had appointed a cabinet subcommittee  in March 9, 2016 to implement short to medium term measures on expenditure rationalisation and domestic revenue mobilisation. The subcommittee comprised of  the Attorney General and Minister of Justice, the Chief of Staff in the Office of the President, Minister of Finance and Economic Development (MoFED), Minister of State 1, MoFED, Secretary to the President, and Governor and Deputy Governor of the Central Bank. The subcommittee was admonished to address the economic challenges facing the country ranging from impact of low commodity prices on minerals, overall low compliance rate among individual taxpaying public and business entities, the effect of the Ebola epidemic, depreciation of the Leone against major foreign currencies, high interest rates and domestic borrowing, increasing trend of extra-budgetary expenditures as well as off budget revenues held by sub-vented agencies. President Koroma told his Cabinet: “These measures will be implemented up to the first half of 2017 in order to stabilise the current situation.” He urged the Ministry of Information and Communications to sensitise the public of these measures or any actions thereof and to fully engage Civil Society Organisations to be part of the process. “If we are able to fight Ebola, we should be able to put up a fight that would turn around the economic fortunes of the country,” he said.

The president expressed the need to take an inward look under the current circumstances on domestic revenue mobilisation, and urged MDAs to cut down on expenditure and focus on measures that would be fully implemented in stabilising the economy. “While considering the recommendations put forward by the International Monetary Fund, We must look at practical ways to minimise the challenges facing the country,” he emphasised. According to the Accountant General, Kebbay Koroma, petroleum retail prices in Sierra Leone are substantially lower compared to neighbouring countries and in effect government is subsidising the consumption of petroleum products not only in Sierra Leone but in neighbouring countries.

Below are measures proposed by the Cabinet Subcommittee and subsequently approved by Cabinet: · 30% cut in recurrent expenditure across the board (estimated cost savings Le309 billion from March to September 2016; · Suspend all domestic finance capital projects and suppliers’ contracts until further notice; · No new procurement of Government vehicles until further notice; · No purchase of new office furniture and fittings; · 50% cut in fuel allocations to all MDAs; · 50% cut in monthly office imprests; · 70% of all payments to suppliers/contractors that have foreign components to be effected in Leones; · 50% cut in DSA for local travels; · Elimination of overtime payments; · No purchase of office equipment (computers, printers and photocopiers); · Restrict all overseas travels and rationalize delegation sizes; · No top-up allowance for sponsored international travels; · 50% cut across the board in vehicle maintenance; · All seminars, retreats and workshops should be held in office facilities; · Eliminate double payments of pensions and salaries across the board.

The above measures have been extended to March, 2017. Furthermore, government has approved the following measures aimed at domestic revenue mobilisation: · Start effective implementation of the Treasury Single Account (TSA); · Transfer 60% of existing resources including projected revenues of all financially autonomous agencies into the Consolidated Revenue Fund (CRF); · All business outfits to pay outstanding arrears of taxes within 30 days; · All commercial banks should transfer monies in transit accounts within 24 hours (strict penalties would apply in the event of failure to comply); · Minimise discretionary duty waivers and rationalise statutory duty waivers.

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