The World Bank has raised concerns about the government’s continued overspending and weak financial discipline, warning that it could threaten the country’s overall economic stability if not urgently addressed.
In its latest Sierra Leone Economic Update (7th Edition) released this month, the World Bank said the government has been spending far more than it earns, resulting in budget deficits for the fourth year in a row.
According to the report, the budget deficit in 2024 — the gap between what the government spent and what it earned — was 5.1% of the country’s total economic output (GDP). This figure was 1.3% higher than the government’s target, and reveals a worrying pattern of budget overruns that has persisted since 2021.
The Bank said this consistent overspending has weakened trust in the government’s financial plans and made it harder to maintain macroeconomic stability, that is, keeping prices, borrowing, and growth under control.
“Persistent budgetary overruns reveal significant public financial management weaknesses,” the World Bank stated. “Stronger coordination and control are needed to ensure spending aligns with approved budgets.”
The Bank highlighted that most of the extra spending came from capital projects, such as road construction and infrastructure works.
“Some of the drivers of the overruns include the completion of township roads; completion of water supply facilities in six district towns, establishment of a presidential development fund, rehabilitation of correctional centers, food for boarding home schools, and the integrated civil registration and vital statistics and ID management system,” the World Bank stated.
In 2024, for example, the government spent 1.5% more of GDP on capital projects than originally planned, especially on completing township roads. The government also cleared more old debts (arrears) than planned, adding further pressure to the budget. And by the end of 2024, total spending had climbed to 17.5% of GDP, up from 14.9% in 2023, a big jump that shows how fast expenses are rising.
On the positive side, the World Bank noted that government revenue collections improved in 2024, rising to 9.2% of GDP, thanks to better tax collection. However, this increase was not enough to cover the extra spending, forcing the government to borrow more to fill the gap.
As a result, borrowing costs have gone up. The average interest rate on government treasury bills — short-term loans used to raise money — rose to 40.8% in 2024, compared to 39.3% the year before. This means the government is paying more just to borrow money to fund its activities.
The World Bank also highlighted serious weaknesses in how public money is managed. Some contracts for government projects are not properly monitored, and payments are sometimes made without full supporting documents, the Bank said, pointing to poor coordination among key government institutions, notably the Ministry of Finance, the Ministry of Planning and Economic Development, and the Sierra Leone Roads Authority.
Experts warn that if the government continues to overspend, the country could face higher inflation, more debt, and reduced investor confidence. The World Bank has urged the government to strengthen budget control, improve monitoring of public projects, and enforce fiscal discipline to prevent further damage to the economy.
