By Amin Kef (Ranger)

Sierra Leone’s Minister of Finance, Sheku Ahmed Fantamadi Bangura, on Tuesday, July 29, 2025, presented the Supplementary Budget for 2025 to Parliament in a significant move to sustain macroeconomic stability. Titled: “Fiscal Consolidation and Budget Credibility to Sustain Macroeconomic Stability,” the budget tackles evolving domestic and global economic challenges and targets a reduction of the budget deficit from 3.9% to 3.8% of GDP.

Speaking in the Chamber of Parliament, Minister Sheku Ahmed Fantamadi Bangura highlighted three key reasons for revising the original 2025 budget, approved on December 20, 2024:

- Improved Economic Fundamentals: Lower-than-expected inflation (down to 7.1% in June 2025 from 54.5% in October 2023) and stronger-than-anticipated economic growth (projected at 4.5% for 2025) have rendered original revenue and expenditure projections outdated.


- Global Economic Uncertainty: Ad-hoc tariff hikes, declining aid flows and tighter financing conditions necessitate cautious fiscal management to protect recent economic gains.


- Revenue Shortfalls: Domestic revenue for the first half of 2025 fell short by NLe642 million, primarily due to underperformance in Goods and Services Tax (GST), import duties and royalties, prompting expenditure adjustments to maintain fiscal discipline.

The Sierra Leonean economy has shown resilience, with a projected growth of 4.5% in 2025, driven by agriculture and services sectors. Inflation has significantly declined, reaching single digits at 7.1% in June 2025, supported by a stable exchange rate, softer global food and energy prices and increased domestic food production. The external sector also improved, with exports rising 11.8% to US$424.1 million in Q1 2025, led by mineral exports (US$317 million, including US$221.5 million from iron ore). The trade deficit narrowed slightly to US$113.7 million from US$113.9 million in Q1 2024.

However, domestic revenue collection underperformed, totaling NLe8.9 billion (4.6% of GDP) against a target of NLe9.5 billion. Key shortfalls included GST (NLe1.4 billion, missing the target by NLe674.7 million) and customs duties (NLe1.9 billion, short by NLe134.7 million). On the expenditure side, total spending reached NLe14.8 billion (7.5% of GDP), with recurrent expenditure at NLe10.3 billion and capital expenditure at NLe4.3 billion, both below budgeted amounts.

The Supplementary Budget revises domestic revenue projections downward to NLe17.9 billion for 2025, reflecting a NLe1.0 billion shortfall. To address this, the National Revenue Authority will implement measures to combat tax evasion, including:

- Enforcing the Minimum Alternate Tax (MAT) and Advanced Pricing Arrangements for iron ore mining companies.


- Rolling out Electronic Cash Registers to 5,000 GST-registered taxpayers.


- Auditing the ASYCUDA system to tackle reconciliation issues and fraud.

Expenditure is also adjusted, with capital expenditure and net lending cut to NLe9.0 billion (4.7% of GDP) from NLe13.0 billion, while interest payments rise to NLe8.0 billion due to higher domestic borrowing costs in late 2024. The revised budget deficit, including grants, is set at 6.8% of GDP, financed through net foreign borrowing (0.2% of GDP) and domestic borrowing (3.6% of GDP).

High debt service payments, consuming 50% of domestic revenues in the first half of 2025, remain a challenge. The Government plans to:

- Reduce public sector borrowing through robust revenue mobilization and expenditure rationalization.


- Issue longer-term Treasury bonds to replace short-term bills.


- Engage non-bank institutions like NASSIT to increase bond uptake.


- Seek more grants and concessional loans from development partners.

To enhance expenditure control, the Ministry of Finance will enforce stricter cash management and compliance with the Public Financial Management Act of 2016. A Ministerial Committee will also prioritize capital projects within the limited fiscal space, supported by a World Bank-backed analysis of energy, roads and water sectors.

Sheku Ahmed Fantamadi Bangura emphasized that the Supplementary Budget builds on the fiscal discipline demonstrated in the first half of 2025, which saw single-digit inflation, a stable Leone and lower Treasury Bill rates (from 34.3% to 14.8%). “This budget will consolidate macroeconomic stability, boost investor and donor confidence and create fiscal space for priority sectors,” he stated.

The Minister thanked President Julius Maada Bio, Cabinet colleagues, the Bank of Sierra Leone, the National Revenue Authority and development partners for their support. He urged Parliament to approve the Supplementary Budget, underscoring its role in sustaining economic gains and improving service delivery.

Sierra Leone’s navigation through global economic headwinds highlights the Government’s commitment to fiscal consolidation and credibility, signaling a strategic approach to fostering sustained growth and stability. https://thecalabashnewspaper.com/finance-minister-unveils-2025-budget-revisions-to-secure-sierra-leones-economic-gains/