By zainab.joaque@awokonewspaper.sl
Washington DC, USA – Finance Minister Sheku A.F. Bangura has voiced apprehension regarding the sharp rise in treasury security rates, citing its detrimental impact on domestic debt interest payments.
Highlighting data from the Annual Public Accounts 2023, Minister Bangura noted a significant surge of 43 percent in domestic debt interest payments, reaching SLE 2,918 million in fiscal year (FY) 2023 from SLE 1,647 million recorded in FY 2022.
“We are deeply concerned about the soaring rates, which have surpassed 40 percent. This is alarming and unsustainable, particularly considering the burden it places on servicing domestic debts,” expressed Minister Bangura.
Speaking in response to queries on the continued tightening of monetary policy for Central Banks, discussed at the International Monetary Fund (IMF) World Bank Spring Meetings in Washington, Minister Bangura emphasized the need for interest rates to attract investors while maintaining fiscal sustainability.
He elucidated that the government’s borrowing requirements often lead to market reactions, resulting in high rates in Sierra Leone. To address this challenge, the ministry is exploring strategies for re-profiling and effective debt management to mitigate risks associated with maturing securities.
On the monetary front, Minister Bangura underscored the Central Bank’s commitment to ensuring monetary and financial stability, focusing on controlling inflation, stabilizing the currency, and maintaining measured interest rates aligned with macroeconomic fundamentals.
In tandem, the ministry is dedicated to fiscal consolidation, enhancing revenue mobilization, curbing expenditure, and mitigating the risks associated with debt servicing.
During the Spring Meetings, Minister Bangura reiterated the government’s dedication to macroeconomic stability, a cornerstone of the new IMF Extended Credit Facility program. He affirmed their commitment to ensuring stability in the financial and monetary sectors amidst evolving economic challenges. ZIJ/23/4/2024
