Minister of Finance Karefa Kargbo has tighten cash-flow cheques before approving public contracts as it seeks to prevent new arrears and pay down old debts, Finance Minister Karefa A.F. Kargbo has said.
The government temporarily held disbursements to Ministries, Departments and Agencies (MDAs) and contractors while clearing external and domestic debt, Kargbo said during the IMF and World Bank Group Annual Meetings.
“For the past few weeks, disbursements both to MDAs and to contractors were really on hold for a while, while we cleared up the external and local debt situation,” he said. “But now we have a handle on that, and so we’re a lot better.”
Before approving contracts, the Finance Ministry will check that cash is available and the relevant MDA has a sufficient budget allocation.
“I think just a bit more discipline on how we enter into contracts on the local front is very, very important,” Kargbo said.
“We have to make sure that we’ve done the work on cash flows, that the MDAs have the necessary budget for them before the Ministry of Finance gives the okay for contracts to be issued,” he said.
The government also needs to address accumulated unpaid obligations, the minister said: “Our arrears are—we need to handle them. There’s a lot of past debt built up into our system that we need to pay down.”
Kargbo said Sierra Leone had kept most external debt obligations up to date despite tight fiscal conditions.
