The Minister of Finance, Sheku Ahmed Fantamadi Bangura, while presenting the 2025 Supplementary Budget to parliament has recently disclosed that the central Bank of Sierra Leone will be carrying out several reforms to address the issues of Debt service payments and also local financial markets for the 2025 financial year.
This information was revealed lately during the debating and reading of the 2025 Supplementary Budget to members of parliament.
According to the Minister Sheku Ahmed Fantamadi Bangura, high debt service payments have been the greatest challenge in the implementation of the budget in recent years, adding that debt service payments, which include interest cost and principal repayments, accounted for 50 percent of domestic revenues in the first half of 2025, thereby constraining the fiscal space.
However, the MOF noted that to address this challenge going forward, Government through the central bank of Sierra Leone will implement the following measures in the second half of 2025 financial year by way of reducing the weekly public sector borrowing requirement from the market through robust domestic revenue mobilization and expenditure rationalization.
Continue with efforts to reduce yields on Government securities to sustainable levels by aligning primary expenditures with domestic revenues as well as through regular engagement with commercial banks.
Issue longer-term Treasury bonds, some with variable coupons, to replace maturing short-term Treasury bills.
The Bank of Sierra Leone will move ahead with reforms on accepting Treasury bonds as collateral for Repo Agreements, with the applicable haircuts to compensate for illiquidity and market risk in the provision of liquidity, engage non-bank financial institutions including NASSIT to increase their uptake of Treasury Bonds.
Implement regulatory norms for institutional investors while ensuring that they can meet their asset-liabilities management objectives; and also seek more grants and concessional external loans from Development Partners.
