By Kemo Cham
The practice of reallocating funds within approved budgets is depriving key social services sectors in Sierra Leone, a new report has revealed.
The report by the Public Financial Management Consortium not only reiterates a well-known fact about delays in disbursement of funds to Ministries, Departments and Agencies (MDAs), but it also notes that some MDAs receive just a fraction of what is in the approved budget, thereby hindering their ability to deliver on the promises contained in their plans for the citizenry.
The report was launched on Wednesday, on a live television broadcast.
Budget credibility describes the ability of a government to accurately and consistently meet its expenditure and revenue targets. This study specifically looked at how the Sierra Leone government expends its budget, vis-à-vis what was approved by the country’s parliament and the actual expenditure.
Also launched at the same event was a report of an analysis of revenue performance and the impact of revenue changes through the Finance Act.
The Budget Credibility Analysis, which covers the period 2017 to 2019, was carried out on the macro level and it entailed analysing the key sector ministries of health, agriculture and education. It reveals that a handful of MDAs, including the presidency, gets more than they bargain for in the approved budget, at the expense of key social services sectors that impact the citizens the most.
One of the indicators used in the study was the aggregate expenditure turnout, which entails the difference between actual expenditure and original expenditure. It assessed the accuracy of the budget, as to whether the aggregate expenditure levels as approved by parliament are implemented or enforced. The government was scored D on this.
“The credibility of the expenditure composition remains a big challenge,” the report notes.
The Public Financial Management Consortium comprises leading civil society organizations that monitor public finances and expenditure. They include the Budget Advocacy Network (BAN), the Center for Accountability and Rule of Law and Restless Development. Also part of the consortium is the development NGO, Christian Aid.
The study was done with funding support from the UK’s International Development arm - DFID.
Abu Bakarr Kamara, Coordinator of BAN and lead researcher in the study, said while the government doesn’t appear to be spending outside what it budgets, reallocation of budgetary funds have left MDAs unable to deliver on their planned projects, which is hurting the ordinary Sierra Leoneans. He noted that while some MDAs receive far more than they are allocated in the budget at the expense of others, some departments receive their disbursement very late in the financial year.
“Budgets are one of the key tools that governments use to turn policy intentions into concrete interventions to achieve their objectives,” said Kamara at the launch of the reports which took the form of a live broadcast on the Africa Young Voices Television.
Kamara later told Politico in an interview that reallocation of funds have seriously affected the credibility of the country’s budget, thereby depriving crucial sectors like health and agriculture, which the masses relied on more for their survival and livelihoods. He cited the office of the president, the pension and housing sectors, as among MDAs that have been consistently receiving far more than was allocated to them in the national budget at the expense of the key sectors.
In the health sector, for instance, the study found that in 2019, while the Primary Healthcare Division received just 4 percent of its allocated budget, the administrative division got 50 percent more than what was allocated to it.
In real figures, this means that while Le20.4 billion was budgeted for primary healthcare, as approved by parliament, it eventually got only Le740million.
At ministerial level, Agriculture realized on 40 percent execution rate in the same financial year.
“Poor budget credibility has hindered the way MDAs are able to deliver services and has led to significant unpredictability in overall budget execution,” the authors of the report wrote.
Kamara said poor planning is one of the major causes of the discrepancies in the budget implementation, noting that some MDAs require reallocation of funds in the middle of the financial year because of failure to foresee certain priority areas of their operations. He cited the Ministry of Energy which failed to budget for fuel for provincial generators in 2019.
“Mind you, to prepare this budget has to go through a whole planning process. And part of that planning is to assess the needs and aspirations of the people to deliver. So if they do not receive what they have planned for, then it means they are not going to deliver what they planned for,” he said.
“So these are the things we brought to light, so that government can start to look at it critically and ensure that ministries receive what they are supposed to receive, and within the ministries, those various departments receive what they are supposed to receive,” he stressed.
The report however recognized the government’s efforts in revenue mobilization, which has led to increase in revenue. It notes that overall revenue forecasts have improved over the period, whilst the performance on the expenditure side is “more mixed.”
But even with all those measures to increase revenue, the government’s public debt continues to rise, according to the findings. In 2017, for instance, the total debt was Le 14.9 trillion, which represents 51% of the country's GDP. In 2018, it increased by Le 18 trillion (59% of GDP) and it further increased to Le 21.5 trillion (58% of GDP) in 2019.
The two reports were released in the presence of representatives from relevant government agencies, including the National Revenue Authority, which was represented by its Director of Research and Planning, Dr Philip Kargbo. He said as an institution they were inclined to learn from the report even if
they might not agree with the entirety of its findings.
The reports were officially launched by Moses Edwin, deputy chairman of the Parliamentary Select Committee on Finance. He warned that under-allocation, as was highlighted in the health sector, according to the report, had the tendency of undermining service delivery.
The lawmaker was however impressed that the report acknowledged that NRA was improving in revenue generation. He expressed hope to see the tax man closed existing gaps in line with New Direction government’s aspirations.
Mr Edwin then urged all institutions mentioned in the report to act accordingly to improve on budget credibility in the country. “As the people’s representatives, we are using this as a working tool to be able to address the loopholes,” he said.
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