Parliament of the Republic of Sierra Leone has on Friday 24th July 2020 approved the 2020 Financial Year Supplementary Government Budget and Statement of Economic and Financial Policies tabled by the Hon. Minister of Finance Mr. Jacob Jusu Saffa.
According to the Finance Minister, the COVID-19 outbreak is threatening to reverse the Government gains in stabilizing the economy and hard-won economic recovery of the past twenty-four months, noting that like most countries in the world, Government of Sierra Leone is trying to strike a delicate balance between saving lives and saving livelihoods.
“This Supplementary Budget seeks to achieve this objective; hence the theme: Saving Lives and Livelihoods” He added.
He said building on the lessons from the Ebola Health Crisis, Government took pre-emptive measures even before recording the index case on the 31st of March 2020.
Adding that, Consistent with international best practices in fighting such pandemics, the Government adopted several containment measures including suspension of international flights, closure of borders, partial lockdowns, and restrictions on inter-district movements, ban on public gatherings, night curfews, and social distancing.
Minister Saffa furthered that whilst the COVID-19 containment these measures were to save lives, their implementation had adverse consequences on economic activities particularly in the services sector which is the second largest sector of our economy. He maintained that the hardest hit sectors have been trading, tourism, and transportation.
Agriculture, fisheries, and manufacturing and that the uncertainty created by COVID-19 is also delaying the inflow of foreign direct investment into the economy.
“As expected for most countries, overall, the domestic output is projected to contract in 2020 with adverse consequences for domestic revenue mobilization,” he said.
Outlining the budgeted expenditure for the rest of 2020, the Minister stated that total expenditure and net lending is revised upwards by Le1.2 trillion to Le10.5 trillion in the Supplementary Budget from Le9.35 trillion in the original 2020 budget.
He continued that this budget is to reprioritize some of the budgetary allocations in the original 2020 budget to provide the fiscal space to fund critical activities necessary for building health sector resilience and keeping the economy stable.
According to the supplementary budget, an amount of Le308.8 billion is allocated to the health response interventions including the Government’s contributions to the operations of NaCOVERC of Le200.0 billion, Ambulance operations, Le26.6 billion, Mortuary Services for 20 hospitals, Le16.4 billion and laboratory and X-ray services, Le65.8 billion.
Le298.3 billion is also allocated for the implementation of the Quick Action Economic Response Programme.
These include allocations for Support to Small and Medium Enterprises (SMEs) through a dedicated Credit Facility and Micro Credit Scheme of Le50 billion, Social Safety Nets of Le50 billion comprising Cash Transfers and Food Assistance of Le20 billion and bailout to State-Owned Enterprises (SoEs) of Le15 billion and support to the tourism sector, Le20 billion, Labour intensive public works, Le102. 7 billion, and Agriculture, Le90.7 billion, of which, food production activities are allocated an amount of Le70.7 billion.
Other allocation to Local Councils, Grants to Tertiary Educational Institutions; Energy Subsidies; transfers to TSA agencies, and the Road Maintenance Fund will remain as budgeted in the original 2020 Budget.
The allocations to MDAs including Defence, Police, Correctional Services will also remain as originally budgeted.
The Minister also announced funding for road, energy, and water sector across the country.
“For the second half of 2020, an amount of Le460.5 billion is allocated for the completion of critical road projects including Le261.6 billion for the implementation of the ongoing MOUs with road contractors for the completion of the Hill-Side Bye Pass Road, Lumley-Tokeh Road and township streets in Freetown, Bo, Kenema and Bonthe as well as spot improvement of roads in Kabala,” he said.
He said the energy sector is allocated Le172.0 billion for the electrification of seven district towns (Kabala, Kambia, Kailahun, Moyamba, Pujehun, Bonthe and Mattru) and repairs of Government-owned thermal plants.
He said an amount of Le146.0 billion is allocated for the Freetown Water Supply Improvement Project; Bonthe Water Supply System and the Six Towns (Kambia, Kabala, Magburaka, Kailahun, Moyamba and Pujehun) Water Supply Project.
Members of Parliament that contributed to the Supplementary Budget debate emphasized the impact of the COVID-19 on the economy and how it has affected the implementation of the initial FY 2020 Government Budget.
They commended the Minister of Finance and team for speedily put together the Government Supplementary Budget.