By Sallieu S. Kanu
Freetown, July 30, 2025 — In a pivotal address to Parliament on Tuesday, July 29, Minister of Finance Sheku Ahmed Fantamadi Bangura presented the 2025 Supplementary Government Budget and Statement of Economic and Financial Policies, outlining decisive steps to address Sierra Leone’s growing public debt burden.
Debt Snapshot As of December 2024, Sierra Leone’s total public debt stood at US$3.1 billion, comprising US$1.8 billion in external debt and US$1.3 billion in domestic debt—equivalent to NLe28.4 billion.
Minister Bangura warned lawmakers that debt service payments—which include interest and principal repayments—have consumed nearly 50 percent of domestic revenue in the first half of 2025, straining government finances and limiting the ability to fund other public services.
Government’s Debt Mitigation Strategy To ease fiscal pressure and create room for economic growth, the Minister announced a series of reforms aimed at reducing borrowing and optimizing debt management:
- Curtailing Weekly Borrowing: Tightening public sector borrowing through improved revenue collection and stricter spending controls.
- Lowering Interest Rates: Continuing efforts to reduce yields on government securities in collaboration with commercial banks.
- Treasury Bond Restructuring: Introducing longer-term bonds with flexible interest structures to replace short-term Treasury bills.
- Repo Market Reform: The Bank of Sierra Leone will accept Treasury bonds as collateral in Repo Agreements, applying specific haircuts to account for liquidity and market risk.
- Engaging Non-Bank Institutions: Encouraging entities like NASSIT to increase investments in government securities.
- Strengthening Regulations: Implementing clear norms for institutional investors to ensure responsible asset-liability management.
- Boosting External Support: Seeking additional grants and concessional loans from development partners.
“This strategy is aimed at restoring fiscal sustainability and freeing up resources to invest in the country’s development priorities,” Minister Bangura said.
As Sierra Leone grapples with mounting debt pressure, the government’s bold reforms signal a commitment to economic stability and financial discipline.