Finance Ministry Assures Payment of January Salaries

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Minister of Finance

By Amin Kef Sesay

A Press Release issued by the Ministry of Finance dated 13th February 2020 states that it is informing the general public that salaries (including NASSIT payment) for the month of January 2020 have now been fully paid to all workers on the Accountant General payroll, including those in Foreign Missions, Security Sector, Ministries, Departments and Agencies, Universities and other Tertiary Institutions, Political Class, Consultants and Sub-vented Agencies.

The release furthered that salaries for Foreign Mission officials, Security Forces (Military, Police, Fire Fighters, Correctional Service, Office of National Security), and Teachers accounting for 75% of total wage bill were all paid by 31st January, 2020.

It also stated that the salary payments that slipped into the month of February were only for a few Government institutions including sub-vented agencies.

According to the Ministry of Finance the reason for the slippage was as a result of the need for Government to meet some critical pro-poor service delivery expenditures in January, on Health (Free Health Care Drugs and Hospital Grants), Education (school feeding, subventions to universities and other tertiary institutions), Security, Energy and the National Civil Registration Programme.

In the case of the Universities and other Tertiary Institutions, the information added, an amount of about Le20 billion was paid to them on January 23, 2020 compared to monthly wage bill of about Le10.0 billion stating how there were technical systems challenges at the end of January on the Payroll Management
Software.

In addition to the above, the weekly debt service payments as a result of high domestic and external debt stock inherited from the past administration, averaging about Le30 billion; accounting for 25% to 30% of domestic revenue collection also pose a risk to the timely payment of salaries.

“Recent arrears verified by the Auditor General, in collaboration with the Ministry of Finance and the IMF owed to domestic contractors and inherited from the previous administration in April 2018 amounted to Le3.2 trillion (or about US$340 million); of which 90% were accrued in 2016 and 2017. Additionally, external debt is estimated at US$1.5 billion and domestic debt at US$650 million. This brings total liability of Government to an estimated US$2.59 billion,” the release furthered.

It went on to state that despite the above challenges, for the first time in several years, the Ministry of Finance was able to process annual release full year allocations to almost all MDAs in FY2019 and they were also able to pay December 2019 salaries way ahead of the festivities.

The administration is also on record to pay Government workers monthly irrespective of unusual delays, unlike sister countries in the sub-region.

“It is further worthy to note that 75% of public expenditure is funded from domestic revenue, 15 % from Grants and 10% from financing. In particular, since April 2018 to date, we have financed salary payments only from domestic revenue with no recourse to bank borrowing. Bank borrowing has been used to pay some non-salary expenditures,” the Ministry stated.

The Ministry of Finance says it remains committed to increased domestic revenue mobilisation and efficient expenditure management as well as timely payment of salaries and spending on critical pro-poor areas.

In a related development in order to get a better understanding of the current economic challenges that the Government is presently facing and how some of them could be surmounted, this medium contacted a seasoned Economist, Prince Jacob Macauley, to give an insight.
He first stated that the economy is going through a transition further underscoring how the sound economic policies that are being rolled out are not quick fixes since it will take time for them to begin to bear fruits.

The Economist pointed out that University authorities need to understand that salaries cannot be increased just like that since such a provision was never factored salaries in the national budget.

“A Memo was issued to all agencies paid from the Consolidated Revenue Fund registering that position,” he revealed adding that it was stated in the Memo that the University authorities should discuss with the Government to determine the rate of such an increase as well as the recruitment procedure otherwise if an increase is made without the resources available to pay such will result to strike actions.

“You may have seen the Social Media bashing of Government for delay in the payment of some segment of workers of their January salaries which the Government has finally cleared,” he recalled.He continued by stating that to address the existing macroeconomic weaknesses and enhance economic growth, the Sierra Leone Government should maintain the fiscal consolidation path, improve debt policy and management and intensify efforts to clear the large stock of arrears.

“The Government plays a key role in developing the financial sector through promoting resilience and stability. One of the key functions that needs to be established is an effective supervision and regulatory regime for financial institutions to address market failures like anti-competitive behavior, market misconduct, information asymmetries and systemic instability, which can negatively impact financial sector development, economic growth and shared prosperity,” he proffered recommendations.

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