By Hasbin Shaw in Freetown, Sierra Leone
President Julius Maada Bio of Sierra Leone says his country is in a debt crisis that his administration and partners of the government must address urgently. He made the statement April 13, 2018.
The Sierra Leonean President made this disclosure at State House during a meeting with the officials of the International Monetary Fund (IMF), members of the Diplomatic and Consular Corps, development partners and public officials.
He said the initial assessment by the Governance Transition Team reveals that his administration will be faced with the worse economic situation since independence.
According to him, before now government cannot pay monthly salaries without borrowing or heavy reliance on overdraft facility at the Bank of Sierra Leone which now stands at over Le160 Billion.
“More serious is today, Sierra Leone’s external debt is at the level of US$2.0 billion and domestic debt is Le4.9 trillion,” President Bio said.
With the signing of new agreements on the eve of the elections, Sierra Leone is already in a debt crisis, which the government in collaboration with development partners must urgently address.
President Bio said the health of the banking system is significantly challenged by the financial conditions of two state-owned banks that have huge non-performing loans, some to politically exposed person.
According to Bio, the International Monetary Fund has resumed their engagement with his administration by organizing this high – level forum on economic management, which he said he is delighted about.
“We are cognizant of the hopes and aspiration of our people, who gave us the mandate to lead this country for the next five years. As we gradually settle down and take stock of the state of the nation, we will form some views on how we can navigate these difficult circumstances,” he said.
He said during the presidential campaign he told the people of Sierra Leone the economic situation is appealing and requires hard choices, which he is strongly committed to deliver on.
“This coupled with low levels of economic growth, high incidence of poverty, stock of economic diversification, high unemployment and challenging business environment for private sector development have further exacerbated the problems,” he said.
He noted that for the first time in two years, the Sierra Leonean Government would pay salaries of Le150 billion, including payment of NASSIT contributions without recourse to domestic borrowing.
He said they would broaden revenue and enhance measures towards achieving their target of at least 20 percent of GDP.
“We will soon put in place measures to harmonize public sector wage bill including sate owned enterprises, limit excessive overseas and local travels, control procurement and maintenance of vehicles,” he said.
As the government takes on reins of past regime and match towards economic recovery, Bio noted, they will be guided by the promises they made to Sierra Leoneans.
“We promised a change in the New Direction to the people, a change that restores sanity in economic and financial management, a change that provides quality service delivery to the people of Sierra Leone,” he said.
He said this change will only be realized when they make progress on transforming the economy, improving governance and human development, and by improving on value for money on infrastructural development.
