Sierra Leone's Minister of Finance, Karefa A.F. Kargbo, has outlined the fiscal reforms and financing priorities for the Fiscal Year 2027 National Budget. The official budget preparation process for FY2027 formally commenced on Wednesday, 16 September 2026, marking the start of a new fiscal planning cycle and setting the stage for full national financial planning. This commencement date signals the government's commitment to a structured and timely approach to budget formulation, ensuring that all stakeholders have ample opportunity to contribute to the process.
A critical phase in this preparatory cycle involved the National Policy Hearings. These essential sessions, a key component of the budget preparation process, were meticulously conducted at the Miatta Civic Centre within the Youyi Building in Freetown. The choice of location shows the public and inclusive nature of these discussions, bringing together various government agencies and stakeholders. During these hearings, foundational policy directions for the upcoming budget were established, providing a strategic framework for resource allocation and economic initiatives. These discussions are instrumental in shaping the government's fiscal agenda and ensuring alignment with national development objectives. The overarching theme guiding the FY2027 Budget Preparation Process is explicitly articulated as "Building Resilience to Create Jobs," signaling the government's strategic focus on achieving both economic stability and strong employment generation through its fiscal policy. This theme emphasizes a dual approach: strengthening the economy against external shocks while simultaneously fostering an environment conducive to job creation, particularly for the nation's youth.
Fiscal Reforms and Revenue Mobilisation: A Strategic Imperative
A critical concern for the government, and a central driver of the proposed reforms, is the imperative to increase domestic revenue mobilisation. This focus has become particularly acute due to a noticeable decline in external development financing, which necessitates a greater reliance on internal fiscal resources to fund national priorities. To address this critical challenge, the Ministry of Finance, working in close collaboration with the National Revenue Authority, will introduce a more rigorous performance contract system specifically designed for revenue mobilisation. This initiative aims to significantly enhance the efficiency, transparency, and accountability of revenue collection efforts across all sectors and regions of the country, ensuring that revenue targets are met and exceeded.
The government's commitment to strengthening its revenue base extends to more stringent enforcement measures. Stronger enforcement will be applied to businesses that fail to issue proper sales invoices or engage in undervaluing sales to reduce their tax obligations. This push for stricter compliance is part of a broader, multi-faceted strategy to close existing revenue loopholes and ensure fair and equitable contributions from all economic actors operating within Sierra Leone. To modernize and streamline the collection process, electronic tax systems are slated for widespread deployment. These advanced systems will be used to ensure that legally mandated taxes are collected accurately and efficiently at the point of sale, thereby reducing opportunities for evasion and enhancing the overall integrity of the tax system. This technological upgrade is expected to significantly improve tax compliance and revenue yield.
A significant reform is also planned for the government's approach to tax exemptions. Under the new framework, tax exemptions will only be granted where they are explicitly tied to strategic investments that demonstrate clear and verifiable benefits for Sierra Leone. These benefits must include, but are not limited to, demonstrable employment creation and technology transfer, thereby aligning fiscal incentives directly with national development goals and ensuring that such exemptions contribute positively to the country's economic growth and human capital development. This targeted approach seeks to prevent the misuse of exemptions and maximize their developmental impact.
For warehouse operations, which are often critical points in the supply chain and potential areas for illicit activities, the Ministry of Finance intends to introduce stronger controls. These full controls are designed to prevent illicit activities, combat smuggling, and ensure proper inventory management across all storage facilities. Specifically, these measures will encompass electronic access controls, automated tracking systems for goods entering and leaving warehouses, and mandatory audit trails for all transactions. The overarching goal of these enhanced controls is to significantly improve transparency and accountability within the supply chain, thereby safeguarding government revenue and preventing economic leakages.
The FY2027 Budget will strategically seek to achieve a balanced allocation between recurrent and capital expenditure. This strategic approach is designed to direct available resources towards critical sectors identified as priorities for national development, ensuring that both immediate operational needs and long-term growth objectives are adequately funded. These priority areas include bolstering domestic revenue mobilisation itself, promoting agricultural productivity, enhancing public health services, improving educational outcomes, expanding energy access, developing vital infrastructure, and fostering technological advancement. The government’s focus is squarely on fostering economic resilience and creating sustainable job opportunities through targeted and impactful investments in these essential sectors. The full set of reforms shows the government's unwavering commitment to strengthening its financial independence and supporting sustainable economic growth and development for all citizens of Sierra Leone.
Medium-Term Expenditure Framework and Priorities for Sustainable Growth
The 2027–2029 Medium Term Expenditure Framework (MTEF) outlines a clear strategic vision for the nation's economic future. According to government plans, this framework will prioritize several key objectives: accelerating economic growth to improve living standards, strengthening fiscal sustainability to ensure long-term financial health, and robustly creating employment opportunities, particularly for the burgeoning youth population. Beyond these core aims, the MTEF also explicitly targets increasing private-sector participation in the economy, recognizing its vital role as an engine of growth and innovation. It commits to significant investment in critical infrastructure and technology, essential for modernizing the economy and enhancing productivity. Finally, the framework seeks to improve public service delivery across Sierra Leone, ensuring that government services are efficient, accessible, and responsive to the needs of the populace.
Regarding key economic sectors, the government will intensify its focus on increasing production, particularly in areas with high growth potential. A concerted effort will be made to diversify mining products, moving beyond traditional exports to explore new mineral resources and value-added processing. Simultaneously, the government aims to enhance the value of exports from the extractive sector, ensuring that Sierra Leone derives maximum benefit from its natural resources through improved beneficiation and market access.
Health and education, recognized as foundational pillars of human development, are slated for additional financing. The government is actively exploring potential arrangements involving debt-related financing to secure the necessary resources for these vital sectors, emphasizing that investment in human capital is a non-negotiable priority for national progress. This commitment shows a long-term vision for a healthier and more educated populace, capable of contributing to and benefiting from economic growth.
In a proactive move towards environmental stewardship and sustainable development, climate priorities will be comprehensively integrated within the government’s overall development framework. This integration means that climate change considerations will inform policy decisions across all sectors, from agriculture to infrastructure, ensuring that development initiatives are resilient and environmentally responsible. Reducing production costs for businesses, improving investment confidence to attract both domestic and foreign capital, supporting entrepreneurship through targeted programs and incentives, and developing a highly skilled workforce capable of meeting the demands of a modern economy are all identified as important and interconnected elements of the government’s economic strategy to foster sustained growth and stability. These measures are designed to create a dynamic and competitive economic environment.
A particularly ambitious and socially impactful target has been set by the government: to create 500,000 jobs for young people by 2030. This target reflects a profound commitment to addressing youth unemployment and leveraging the demographic dividend. To ensure inclusive growth and gender equity, at least 30 percent of these new jobs are specifically expected to benefit women, reflecting a deliberate emphasis on inclusive employment generation and empowering women in the workforce. This strategic focus aims to reduce social disparities and enhance overall economic participation.
Strengthening Governance and Addressing Fiscal Challenges
In a concerted effort to enhance fiscal management and ensure effective resource allocation, the Ministry of Finance has issued full budget preparation guidelines to various government institutions. These guidelines meticulously outline the framework and procedures for the upcoming fiscal year, ensuring that all ministries, departments, and agencies adhere to a standardized and transparent process for submitting their budgetary proposals. This step is key for fostering fiscal discipline and coherence across the government.
In parallel efforts to bolster fiscal management and governance, the Ministry of Finance is actively engaged in the critical process of revising the Public Financial Management Act. This full revision aims to significantly strengthen fiscal governance, improve transparency and accountability in public spending, and ensure the efficient and effective management of all public resources. The amendments are designed to create a more strong legal framework for financial administration. Concurrently, work is progressing steadily on a thorough review of the Public Procurement Act. This review is specifically intended to boost efficiency, enhance transparency, and improve accountability within public procurement processes, while also securing better value for money in all government purchasing activities. The goal is to eliminate inefficiencies and reduce opportunities for corruption, ensuring that public funds are utilized optimally.
Despite these proactive measures, concerns have been raised regarding instances where funds allocated to development projects are not fully utilized. These situations indicate potential inefficiencies in project execution and absorption capacity, which the government is keen to address to ensure that planned investments translate into tangible development outcomes. Fiscal challenges are also particularly evident in the energy sector, where existing obligations have grown to an approximate and substantial US$150 million. This significant financial burden notes the need for sustainable solutions and reforms within the energy infrastructure. The government provided about NLe196.8 million in fuel subsidies between February and the end of August 2026, illustrating the considerable fiscal strain imposed by market fluctuations and the need to support citizens and businesses.
Adding to the complexity of the fiscal landscape, the financing gap for Sierra Leone’s national development plan has significantly increased. This gap has risen from an approximate US$2.56 billion in 2024 to more than US$5 billion, showing the immense financial requirements to achieve the nation's ambitious development objectives. This substantial increase notes the urgency of the domestic revenue mobilisation efforts and the need for strategic partnerships. Following these initial stages of policy formulation and guideline issuance, the FY2027 Budget Preparation Process will advance to detailed bilateral discussions with individual ministries and agencies. These discussions will be followed by further consultations with relevant stakeholders, including civil society organizations, private sector representatives, and development partners, to ensure a participatory and inclusive budget that reflects national priorities and aspirations. This full approach aims to produce a budget that is not only fiscally sound but also responsive to the diverse needs of Sierra Leone's population.