By Christian Lawrence
The Citizens Budget launched at the Miatta Conference Hall on Thursday 10th May 2012 was just a miniature of the Comprehensive 2012 national budget. I must reckon that as most of us reading this piece are Sierra Leonean nationals, we certainly must have our support/loyalties for different political parties. I too have mine as well, but do not and hopefully will never show up in doing the kind of work that I do in ActionAid International Sierra Leone. So the analysis I did below is as far as possible devoid of bias.
I looked at the figures/information and as a professional, made interpretations with the help of my experience and knowledge on governance issues, processes, trends and the political milieu. Nonetheless, we are all at liberty to think otherwise of some of the perspectives or analyses below. This is Democracy, which is about choices!
The immediate graph below shows Government’s priorities for 2012. Not surprisingly, roads take the bigger chunk of the national cake, as is represented by 40%. With myriads of road works in many districts and bigger towns of the country, one will not be surprised if it takes 40% of total government income. Energy and Water is Government’s second priority as is represented by 21% in the graph. The famous Bumbuna hydro project is no news to many Sierra Leonean. Personally I am a bit disturbed that as the second priority…many district headquarter towns – talk far less of chiefdoms and wards – are yet to be guaranteed of public electricity power.
The proportion of Sierra Leoneans still drinking unsafe water is very high, especially in the provinces. In many parts of the provinces, people drink water from private wells and streams that are not well/scientifically treated. Well, with about 6 more months to go before elections, I hope with some miracle many areas in the country will benefit from electricity power and safe drinking water. Health is the less prioritized priority, with 11% of the national resources allocated to it. With the country (forgive my humour) Winning The Trophy for infant and maternal mortalities in the world, I personally was expecting an increased allocation in this sector. The caveat is that increase in allocation does not necessarily guarantee expected results. Huge chunk of resources can be allocated to a sector, but if proper monitoring system is not instituted the funds can end up lining the pockets of those in position to spend on the poor’s behalf.
Interestingly, the graph below shows that the government generates more revenue domestically than it gets from outside sources. There is a glimmer of hope that one day (I hope to live till then) Sierra Leone will be 100% donor-independent. The 70% of domestic revenue generation in figures is Le. 1.6 trillion. The 30% coming from donors is Le. 696 billion. In total, we are saying the Government’s revenue for 2012 is Le. 2.3 trillion. As Herculean as this figure seems, it is still insufficient to address even the most basic of needs of the poor.
It will be worthwhile knowing where Government is getting its revenues from domestically, don’t you think? Government gets its revenue from many sources. Look at this graph below:
As you have seen above, Government’s main source of revenue is Income Tax. By income tax, I mean the taxes that our Finance personnel in our offices (for those of us working in formal institutions) deduct every month from our salaries for PAYE, NASSIT etc! When the income of all Sierra Leoneans working (whether formally or informally) is taxed, the Government uses such funds to run the country. So as you can see, it is the business of all of us, not just those working exclusively on governance issues, to be inquisitive about what Government is doing with public funds.
It may surprise at least a few of us that Mines and Minerals is not Government’s main revenue generation source. With so much talk about Sierra Leone endowed with natural resources, it is not even the second or third highest area that Government gets revenue from. I can confidently say that the economy of Sierra Leone at the moment is predicated on taxation. Look at the graph above again; the first three highest bars are Income Tax, GST, and Customs and Excise. All three are taxes that you and I pay – not the mining companies! I am sympathetic, but we must also be proud that with many citizens living in the doldrums of poverty we are still able to finance our economy.
Now let us quickly look at how Government spends its money. Ironically, though the Government’s revenue for this 2012 is Le. 2.3 trillion, its expenditure is estimated at Le. 2.8 trillion. The technical term for this economic quagmire is Deficit Budgeting. The one million dollar question is, how can the Government spend what it does not have? Where will the government get the remaining Le 500 billion? This is almost always the case. The Government intends and needs to do more but as the Economists would say, resources are scarce. Will you blame Government for wanting to spend more with so many citizens in squalor? I want to stop here for now. Have a great day everyone.
Christian Lawrence is Governance Coordinator, ActionAid International, Sierra Leone.