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SLPP Falsity Exposed As Bank Borrowing Soars in Sierra Leone

SLPP Falsity Exposed As Bank Borrowing Soars in Sierra Leone

Falsity In the Annual Financial Statements of the Consolidated Fund for the financial year ending 31st December 2019, Ways and Means advances increased by 54% from Le75.7 billion in 2018 to Le117.2 billion in 2019. Ways and Means are an advance loan taken from Commercial Banks to support the operations of government.  (Photo: Julius Maada Bio, Sierra Leone President)

The National Coordinator of Budget Advocacy Network (BAN), Abu Bakarr Kamara, said this government was saying the previous government was unable to pay salaries without recourse to the commercial banks, “They have now taken more advance loans from the commercial bank,” he said. 

However, Net Domestic Borrowing during Financial Year (FY) 2019 totalled Le4,137,576 billion as against Le4,142,833 billion – FY2018 and this comprises Treasury Bills, Ways and Means advances, One year Treasury Bonds, Bridging Loan and Long Term Securities. 

The net decrease in Ways and Means given by the Bank of Sierra Leone (BSL) to finance Government’s operations was Le41,927 billion, taking the total amount owed at the end of the fiscal year to Le117,162 billion, which is repayable in the ensuing year. 

Treasury Bills amount to Le3,792,462 trillion as against Le3,495,413 trillion – FY2018, which represents the total amount of treasury bills issued during the year as 91-Day, 182-Day and 364-Day Treasury Bills. The total worth of Treasury Bills redeemed during the year amounted to Le3,424,561 trillion (Le3,160,704 trillion – FY2018). The total outstanding amount of treasury bills at the end of FY2018 is Le3,761,856 trillion (Le3,394,950 trillion – end FY2018). 

Richard S. Williams, Accountant General, said on One year Treasury Bonds there are no further issues of one-year bonds during the period and all outstanding have been redeemed in the previous years. 

Bridging Loans, he wrote, were obtained from the BSL during FY2018 with an outstanding balance of Le247 billion as at the previous year-end but have now been repaid during the course of the year leaving no outstanding balances as at the end of FY 2019. On Long Term Securities (with more than one year maturity), a total amount of Le227,951 billion (Le325,167 billion – FY2018) represents long-term securities issued in the form of treasury bonds during the year ended FY2019. 

The total worth of long-term securities redeemed during the year amounted to Le213,078 billion (Le141,528 billion – FY2018). 

According to the Annual Accounts, the total outstanding amount of long-term securities held as 2-Year, 5-Year and 10-Year Treasury Bonds at the end of FY2019 is Le1,439,840 trillion (Le791,693 billion – end FY2018) held by the BSL (Le799,273 billion) and NASSIT (Le106,559 billion). 

The Special Marketable Securities held by the BSL totalling Le799,273 billion as at 31st December 2019, comprises: 3-Year Treasury Bonds Le331,982 billion, 5-Year Treasury Bonds Le367,990 billion and 10-Year Treasury Bond Le567,758 billion. 

The treasury bonds are said to be held by the BSL following a Memorandum of Understanding with the Government dated 14th October 2006 converting Non-Marketable, Non-Interest Bearing Securities to Special Marketable Securities for capitalization of the Bank and for monetary purposes.

The interest cost of financing the operations and the total amount payable at redemption will be borne by the Government.

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