Sierra Leone Telegraph: 1 December 2018:
In September 2018, Sierra Leone’s National Revenue Authority (NRA) collected over Le 400 billion for the first in its history, but needs to double this trend by 2023, if the 20% of domestic revenue to GDP ratio is to be achieved by the government, says campaign group – Budget Advocacy Network.
The government’s own target as set out in its New Direction Strategy paper, states: “In the New Direction, the focus will be to increase the domestic revenue GDP ratio from about 10% to 20%.”
And during the state opening of the 5th Parliament of the 5th Republic of Sierra Leone, President Bio told the people of Sierra Leone that: “Our domestic revenue make up only 11.5 percent of GDP and is one of the lowest in the World”
The Budget Advocacy Network and Action Aid Sierra Leone see the government’s commitment as very vital for the delivering of essential social services, especially the Free Quality Education and Free Health care, and as such are tracking this commitment on a quarterly basis.
It is also a way of making information on the revenue collection transparent so that citizens can hold duty bearers accountable for commitments they make, says the Budget Advocacy Network.
This is the latest Budget Advocacy Network Report:
The data used for this tracking is the published monthly statement of the Consolidated Fund which include actual revenues and expenditures done by the Accountant General Department and published on the Ministry of Finance (MoF) Website.
This second publication looks at data for three (3) months before the Bio administration and six (6) months after. (January to September 2018). The Gross Domestic Product (GDP) used is Le 31,722 billion.
The methodology used in the first edition to calculate the average daily revenue collection has changed. In the first edition, we used the monthly revenue collected divided by the number of days in the month.
In this second edition, we used the monthly revenue collected divide by the total working days in the month excluding weekends and public holidays.
NRA has made impressive revenue collection from April to September hitting Le 400 billion in September 2018 for the first time.
If NRA is to hit their domestic revenue collection target for 2018 which is 14.3% of the GDP (which is likely base on the past 4 months trend), they will need to collect additional 1.2% of GDP annually in the subsequent years to hit the 20% target by 2023.
Using the projected nominal GDP figure for 2021 (excludes iron ore), Sierra Leone should collect more than Le 832 billion per month starting 2021 to hit the 20% of GDP by 2023.
This amount is more than twice what NRA collected in September 2018.
Average daily domestic revenue collection rose from Le 16.27 billion in March to Le 20.24 billion in September 2018.
Income tax increased from Le 124.67 billion in March 2018 to Le 170.41 billion in September 2018.
Revenue collected from customs and excise increased by more than two-fold from March to September 2018.
GST also increased from Le 54.74 billion in March to Le 80.30 billion in September 2018.
The impressive increases in revenue mobilization could be attributed to the successful implementation of the Government Executive Orders released in April 2018, related to revenue mobilization and closing of leakages.
Mineral resources decreased by two-fold from March to September 2018. Other departments and petroleum product excise duty increased by two-fold from March to September 2018.
Overall, monthly domestic revenue collection increased by Le 96.74 billion from March to September 2018.
So where is the money going?
From April to September 2018, government has consistently spent within its revenue collected and this shows prudent financial management. (spend what you collect).
Expenditure on wages, salaries and employee benefit increased slightly from Le 160.44 billion in March to Le 163.56 billion in September 2018. This slight increased could be attributed to the establishment of new Ministries, Departments and or Agencies.
Non-salary, non interest recurrent expenditure increased from Le131.89 billion in March to Le 165.45 billion in September 2018.
Domestic development expenditure decreased from Le 44.82 billion in March 2018 to Le 7.01 billion in September 2018.
National Revenue Authority increased it domestic revenue collection by Le 96.74 billion from March to September 2018 hitting over Le 400 billion per month for the first time in the history of Sierra Leone.
If this same trend continues (Additional Le 96.74 billion every six months), NRA will likely hit the target of 20% of domestic revenue to GDP by 2023.
To achieve this, NRA should be supported to speedily implement the proposed reforms as stated in the 2019 budget speech.
Some of these reforms include: Automating Tax Collection Processes and Procedures; strengthening Tax Compliance; collection of Tax from Self-employed Professionals; review of Duty and Tax waivers; implementation of the Extractive Industry Revenue Act (EIRA) 2018.
In addition, NRA should continue to reduce the revenue leakages and use the existing laws to enforce revenue collection. With more resources, the social sector will be adequately financed and hence citizens will access to available and safe public services.
The Sierra Leone Telegraph notes that what could also be frustrating the government’s efforts in curbing public spending, is the vast number of ghost workers employed in the public sector.
According to reports, the Sierra Leone’s National Civil Registration Authority has discovered 9,785 ghost workers on Government payroll and subvented agencies.
The Director Generation of the NCRA, Mohamed Massaquoi informed local reporters at the national biometric verification exercise briefing session.
It is reported that during the ten years of APC rule, 6,238 had duplicated pin codes; 71 persons with more than one pin codes, 727 verified duplicated new registration, 307 personnel file and 88 non-existent pin codes have so far been discovered.
The United Kingdom is the largest bilateral aid donor to Sierra Leone. In 2018/2019 the British government gave Sierra Leone £132.5m.
About Budget Advocacy Network
The Budget Advocacy Network (BAN) is a Network of Civil Society Organisations in Sierra Leone committed to work on budgets and budget policies to enhance policy making and implementation for sustainable and equitable development.
BAN was established in 2006. BAN consists of local and international organizations such as the Campaign for Good Governance (CGG), Network Movement for Justice and Development (NMJD), Western Area Budget Education Network (WABEAN), Action Aid Sierra Leone (AASL), Search for Common Ground (SFCG), Christian Aid (CA) and Transparency International (TISL).