The SLPP Presidential candidate, Brig. (Rtd) Julius Maada Bio has assured the people of Sierra Leone that, the SLPP under his leadership “is committed to the full implementation of the People’s Manifesto under a New Direction”.
Brig. (Rtd) Julius Maada Bio called on the people of Sierra Leone to vote the APC party out of office on March 7, 2018. “After ten years in office, the APC politicians have nothing new to offer to the people of this country…All around the APC table, you see recycled Politicians being moved from one office to another… What really can these people offer to this country again?…They have run out of ideas to govern the country…The people of Sierra Leone deserve a change for a New Direction”, Brig. (Rtd.) Julius Maada Bio said.
See how the SLPP intends to finance the New Direction under the leadership of Brig. (Rtd) Julius Maada Bio below.
FINANCING THE NEW DIRECTION
The obvious question is how we intend to finance this ambitious plan. Whilst we shall continue to look forward to external support, it is imperative that we rely primarily on domestic revenue. In the medium term (2018-2023), we shall reduce the persistent budget deficit and even generate surplus through our revenue mobilisation strategy and expenditure control measures. In addition to budgetary resources and external aid (loans and grants) through traditional sources, we will finance our programmes from public-private-partnership, Diaspora bonds, carbon trading and South-South cooperation.
At present, it is estimated that the total shortfall in domestic revenue is Le2.5 trillion or about 7.0% of GDP. Also, estimates from the 2017 budget shows that if domestic revenue to GDP ratio increases from 12.1% in 2017 to 13.3% in 2018, a total additional revenue of Le1.028 trillion(equivalent to US$137.1 million) will be raised. When domestic revenue GDP ratio further rises to 14.6% in 2019, additional revenue of US$132.56 million will be generated and when it rises to 15.4% in 2020, additional revenue of Le 1.18 trillion or equivalent to US$157.06 will be raised. As it is, due to excessive duty and tax waivers, the APC Government cannot live up to their commitment to achieve the revenue targets. We have also seen that the current APC Government have over the years embarked on expansive and unsustainable expenditures underpinned by uncontrollable fiscal indiscipline resulting in mounting public debt and raising domestic revenue GDP ratio to 20% within three years. This will obviously expand the fiscal space for public spending on priority programmes. Thus, just by reallocating public spending, we can finance our core programmes from domestic resources. When we mobilise additional external resources from development partners, there will be sufficient resources to implement our core programmes.
In the New Direction, one of our flagship programmes is free primary and secondary education. This will be funded through mobilizing more domestic resources and undertaking disciplined expenditure measures. These are discussed below, including the indicative cost of the free education programme.
6.2: Indicative Costs
The costs of the Flagship programme are indicative and will be reviewed annually. Our analysis shows that the unit cost per pupil per year is about US$51(equivalent to Le380,000) covering tuition, core text books, uniforms and other learning materials and with projected total enrolment of 2,090,385 pupils over a five-year period based on 2016 Annual School Census figures, we will require Le115 billion in 2018, Le126 Billion in 2019 and Le 140 Billion in 2020. This estimate will increase at an average of 10% consistent with the school enrolment rate.
TABLE 1: SCHOOL EXPENDITURE PER CHILD PER YEAR
|Expenditure Category||Cost (Leone)||Cost in US$|
|* Social Science|
|* Integrated Science|
|* Exercise Books|
|Two sets of uniform & shoes||75,000||10.5|
|Other learning materials||80,000||10.5|
6.3 Measures to Mobilise Additional Revenue
Our broad strategy is therefore to push for better taxation collection rather than imposing new taxation. We commit to increase domestic revenue to 20% over 3 years. Such efforts hold the potential to stimulate growth and investment whilst also allowing for increased levels of tax collection.Specifically, the following shall be the focus:
- We intend to reduce these waivers by at least 50% in the first two years and level around 25-30% in 3rd to 5th These alone will provide additional revenue of around Le150 billion per year.
- All holders of elective office and political appointees including the President and Vice President will pay tax on their earnings to ensure fairness in the tax system. This will generate additional taxes of at least Le15.0 billion per year.
- We will implement ECOWAS Common External Tariff (CET) fully like in other countries, generating additional resources of about Le35.0 billion yearly.
- Implement without delay the Treasury Single Account (TSA) system that would allow Government to aggregate receipts from all government sources in order to give a better oversight of public finances, improve cash management and reduce reliance on bank financing.
- Implement the Carbon Trade facility; this will yield an estimated annual revenue of US$60.0 million or Le450.0 billion
6.4 Measures to Control Expenditure
Control of the Wage Bill
Uncontrolled wages and salaries caused by bloated public sector through presidential appointments and establishment of commissions that largely usurp the line Ministries’ functions, unregulated wage increases, double or triple dipping of salaries and pension as well as uncoordinated recruitment across the public sector.
If we are to restore credibility to the service, we must coordinate the wage bill. If we are to enhance staff moral and improve on service delivery, we must control the wage bill. Wages and Salaries must be harmonized on the basis of fairness and equity in the use of public resources. A commissioner or a director or director general must have an aligned appropriate grading within the civil service comparable to other public sector workers, payroll verification exercise between Government and NASSIT, public sector workers on Government payroll will be assigned biometric photos and personalized pin codes linked to NASSIT numbers. These measures, when implemented will lead to substantial savings to finance our programs. This will provide substantial savings to the Budget.
Goods and Services
The goods and services expenditures are mainly recurrent expenditures, wages and salaries and debt service payments. They include vehicles, utilities (telecom, electricity, water facilities, housing), travels, procurement of drugs and medical supplies. This is where we have very large leakages and unbudgeted expenditures. These are the areas that should be tackled decisively to make the required savings for financing poverty related activities.
Procurement and Maintenance of Vehicles
It is reported there are 100,000 vehicles registered by Government and related institutions. These exclude those registered under parastatals using private number plates. The purchasing cost of the vehicles, which are mainly SUVs, is around $65,000 to $110,000 each (Government prices). First problem, the vehicles are excessively overpriced.For example, a V6 Land Cruiser or Prado costs Government around Le660 million for 5 years covering high purchase price, customs duty/tax waiver/insurance and repairs. V8 Toyota Land Cruiser will cost Government Le1.09 billion in 5 years. We estimate that 10,000 vehicles cost is around Le6.6 trillion. Reducing this cost by at least 50% will make Le3.3 trillion in 5 years.
Concrete measures will include reducing spending on purchase of V8 vehicles, introducing pool vehicle system in the public sector; staff bus service for junior workers and vehicle loan system for certain categories of public sector workers.
Reduce Cost on Travelling
Over the last 10 years, overseas travel was an expanding Government area. Despite the cosmetic austerity measures, reports show that the travel budget after austerity is higher than the pre-austerity period. For example, the attendance of the President to UN, AU or ECOWAS Summits cost over Le4.0 billion in each case. Overseas travel expenses across the MDAs are uncontrollably higher, estimated at over Le250 billion or more than $30 million a year.
We recognize that it may be impossible to reduce overseas travel to zero. However, in order to to make savings the following measures will be adopted:
- Government delegations will be reduced or streamlined to the minimum-value for money travels
- Quarterly budget performance report on the outcomes compared to estimates of MDAs will be published
- Use of Sierra Leonediplomatic missions to represent Government except where there are unavoidable statutory meetings that lead to net economic benefits
- Adopt travel policy across Ministries, Department and Agencies (MDAs) on ticketing, travel per diem computation, categories of class of travel for each category of staff.