By Thomas Dixon in Freetown
232News
Recent Performance Contractors done by Audit Service Sierra Leone in July 2022 has exposed the payment of domestic arrears to local contractors in Sierra Leone.
In Sierra Leone, the Ministry of Finance (MOF) is charged with the responsibility to manage public debt in Sierra Leone and to ensure that debts are maintained at a sustainable threshold.
The report revealed that ghost contractors are being paid billions of Leones without proper verification by the department responsible for debt management.
“Even though government aims to maintain public debt at a sustainable threshold of not more than 70% in nominal terms and 55% in present value terms, while external debt will not exceed 40% of GDP in present-value terms, the total public debt stock of Sierra Leone at the end of December 2020 amounted to Le30.71 trillion, of which external and domestic debts accounted for Le20.05 trillion and Le10.66 trillion, respectively,” the report stated.
The reported revealed that the public debt stock increased by 14.69% and that in 2020, total public debt was projected at 79.4% of GDP (up from 71 percent of GDP in 2019), largely reflecting the larger fiscal deficit.
That as of the last Development Sustainability Analysis (DSA) in June 2020, both external and overall risk of debt distress remains “high”.
“According to the World Bank, Sierra Leone faces risks and challenges, as the main domestic macroeconomic risks are continued high public debt and domestic payment of arrears, slower than expected revenues, and rapid growth in monetary aggregates, including the associated inflationary risks and financial sector weaknesses,” the report noted.
