Freetown, 29 July 2025 – Government of Sierra Leone has announced a major cut in its 2025 spending plan as falling domestic revenues, missed tax targets, and rising debt service costs force a mid-year fiscal reset.
Presenting the Supplementary Budget in Parliament on Tuesday, 29th July 2025, Finance Minister Sheku Ahmed Fantamadi Bangura said the government has revised its total expenditure for the year down to NLe31.3 billion (16.2% of GDP), a significant reduction from the original NLe35 billion (18.1% of GDP) approved last December.
The bulk of the cuts affect domestically funded capital projects, which have been scaled back by over 50%, from NLe2.2 billion to NLe1.1 billion.
Bangura informed parliament that the shortfall in domestic revenue, particularly in GST collections, makes it impossible to maintain the original spending envelope, adding that this Supplementary Budget is a necessary step to preserve macroeconomic stability and avoid further debt accumulation.
The revised fiscal framework follows a NLe646.2 million revenue shortfall in the first half of the year. The Goods and Services Tax (GST) underperformed sharply, falling NLe674.7 million below target, largely due to weak compliance and tax evasion. Total domestic revenue for 2025 is now projected at NLe17.9 billion (9.3% of GDP), down from NLe18.9 billion.
Compounding the crisis is the absence of budget support grants. While capital project grants amounted to NLe2.2 billion, no direct budget support funds were disbursed by development partners during the first half of the year. This lack of external financing, coupled with higher-than-expected debt servicing costs, has stretched the government’s fiscal space.
“Off-budget grants provided by partners amounted to NLe1.4 billion. There was no disbursement of budget support grants during the first half of 2025,” Bangura pointed out.
Debt service remains one of the most serious constraints. In the first half of 2025, 50% of domestic revenue was spent on interest and principal payments. Treasury Bill rates, while down from over 40% last year to 14.8% in June, still contributed to higher borrowing costs. Total public debt stands at US$3.1 billion, with US$1.3 billion of that domestic.
Macroeconomic indicators showed some improvement amid these challenges. Inflation fell from 13.8% in December 2024 to 7.1% by June 2025, driven by a stable exchange rate, easing global prices, and tight monetary policy. The Leone also remained relatively stable, depreciating by just 1% against the U.S. dollar over the past year.
To bridge the revenue gap in the second half of 2025, Bangura said the National Revenue Authority (NRA) will implement a series of aggressive compliance measures, including expanding electronic cash register use, recovering petroleum duty arrears, tightening customs systems, and enforcing new tax assessments. At least 5,000 GST-registered businesses are expected to be brought under stricter electronic monitoring.
On the expenditure side, the Ministry of Finance has warned all government ministries and agencies to strictly adhere to their approved budgets. Quarterly allocations will be based on updated cash flow forecasts, and a ministerial committee has been established to review and prioritize capital projects within the available resource envelope.
“This Supplementary Budget will maintain the posture of fiscal consolidation in the second half of the year in order to preserve these macroeconomic gains, enhance budget credibility, and address debt vulnerabilities,” he maintained.
The overall budget deficit for 2025 is estimated at NLe3.7 billion, representing 1.9% of GDP. When grants are excluded, the deficit rises to NLe5.9 billion, or 3% of GDP. The domestic primary deficit, excluding interest payments and external financing, is estimated at NLe1.0 billion, equivalent to 0.5% of GDP.
Parliament is expected to debate and vote on the Supplementary Budget in the coming days.
