Deputy Finance Minister for Fiscal Policy, Anthony Myers, has expressed strong commitment of the Joseph Boakai administration to service the country’s domestic and external debts.
According to the government’s public debt service portfolio, as captured in the administration’s recently submitted draft national budget to the Legislature, the total debt service, subscription, and other payables for FY2024, are projected at US$217.28 million, representing a 117.69 percent increase, compared to the FY2023 forecast of US$99.81 million.
However, US$129 million has been allocated to service this debt, and it represents an increase of 29.26 percent, compared to the FY2023 forecast of US$99.81 million.
Moreover, the overall debt stock as of December 2023 stands at US$2,337.26 billion, of which domestic debt is US$1,022.00 billion, 43.73 percent, and external debt is US$1,315.26 billion, 56.27 percent.
Deputy Finance Minister Myers attributed the increase in the budgetary allocation of the Ministry of Finance mainly to the commitment of the government to financing the accumulated debt incurred by other institutions of government.
Deputy Minister Myers noted that it is so because it is the responsibility of the Ministry of Finance to finance the activities and liabilities of other government entities.
According to him, the allocation of US$129 million was a major reason that led to the increase in the allocation to the Ministry in the FY2024 Draft National Budget before the Legislature for ratification.
Myers further clarified that, as a function of government, the Ministry of Finance is the institution responsible for debt management, stressing that by increasing debt servicing, the government committed to being “responsible” to domestic and foreign partners.
He asserted that servicing the debt obligations to domestic banks, for example, would help strengthen the capital portfolio of the commercial banks and keep them more viable, thus preventing them from collapsing.
Speaking at the Ministry of Information’s regular press briefing yesterday, the Deputy Finance Boss indicated that servicing the government’s external debt obligations will help create space for the needed support to finance the government’s development plan for the next five years.
He also disclosed a more favorable outlook for the country’s economy, as it is projected to expand to 5.3 percent in 2024, and by an average of 6.4 percent in the medium term from 2025 to 2027.
This is a progress from the 4.6 percent Real GDP expansion in 2023, which, according to him, is based on growth in the mining, manufacturing, and services sector, among others.
Meanwhile, Deputy Minister Myers also expounded on a number of macroeconomic assumptions that informed the preparation of the Draft FY2024 National Budget, contrary to criticism from the public.
Key amongst them is the favorable GDP growth rate, as well as the expected rise in imports due to anticipated increase in major commodities’ outturn in all sectors of the economy, and projected increase in government revenue due to expected rise in mining.
Others are manufacturing, services, and primary commodity output, moderation of inflation and stability of exchange rate in the medium term, among others, over the next six years.
It can be recalled that President Boakai, through Finance Minister, Boima Kamara, submitted the Draft 2024 National Budget to the Legislature, with a resource envelope for FY 2024 at US$692,409,245.53.
However, 28 percent or LD41.1 billion is domestic currency and US$500.4 million or 72 percent is actual USD. Projected annual average exchange rate is US$1:213.82 LD.
The total projected revenue from domestic resource mobilization is US$649.9 million or 93.9 percent, while external resources account for US$42.4 million or 6.1 percent.
