By Sallieu S. Kanu
Freetown, July 30, 2025 — The Government of Sierra Leone has released its 2025 Supplementary Budget and Statement of Economic and Financial Policies, presented by Finance Minister Sheku Ahmed Fantamadi Bangura to Parliament on July 29. The report highlights a resilient economy with significant strides in macroeconomic stability, despite facing revenue shortfalls and rising public debt.
Strong Economic Recovery and Growth
- The economy, rebounding from the COVID-19 pandemic, grew at an average of 5.6% between 2021–2023.
- Growth reached 4.4% in 2024 and is projected to hit 4.5% in 2025, driven by agriculture and services.
- Key indicators such as credit expansion, export growth, and stable inflation and exchange rates support this outlook.
Inflation and Exchange Rate Stability
- Inflation fell from 54.5% (Oct 2023) to 7.1% (June 2025), marking a major economic milestone.
- The decline was fueled by increased domestic food production, fiscal discipline, and favorable global conditions.
- The Leone’s exchange rate remained broadly stable, with only 1% depreciation between June 2024 and June 2025.
External Sector Performance
- Exports hit US$424.1 million in Q1 2025—an 11.8% rise from Q1 2024.
- Mineral exports dominated, especially iron ore (US$221.5M).
- Agriculture exports totaled US$86.9 million.
- Imports reached US$537.8 million, with food and petroleum accounting for over 60% of total imports.
- The trade deficit narrowed to US$113.7 million, thanks to robust export growth.
Debt and Monetary Adjustments
- Total public debt as of Dec 2024 stood at US$3.1 billion (external: US$1.8B, domestic: US$1.3B).
- Treasury bill rates dropped dramatically from 41.3% (2024) to 14.8% (June 2025) due to inflationary relief and fiscal tightening.
- Gross foreign reserves dipped to just 1.8 months of import cover, down from 2.0 months a year earlier.
Budgetary Outcomes and Revenue Challenges
- Domestic revenue collection in H1 2025 was NLe8.9 billion, falling NLe646.2 million short of projections.
- Shortfalls stemmed from weak tax compliance, low import growth, and reduced mining activity.
- Excise duties on petroleum exceeded expectations, benefiting from a transparent pricing model.
- Total grants through the budget reached NLe2.2 billion, with another NLe1.4 billion off-budget. Notably, no budget support grants were received.
Government Spending and Fiscal Deficit
- Total expenditure and net lending was NLe14.6 billion (7.5% of GDP)—below budget forecasts.
- Recurrent spending: NLe10.3 billion
- Capital spending: NLe4.3 billion, mostly foreign funded
- The overall budget deficit was NLe3.7 billion (1.9% of GDP). Excluding grants, it rose to NLe5.9 billion.
- Financed through domestic (NLe3.5 billion) and foreign borrowing (NLe214.5 million).
Minister Bangura reaffirmed the government’s commitment to fiscal consolidation and economic reform, emphasizing the need to strengthen revenue mobilization and improve budget execution.