Public Debt and Fiscal Space in Sierra Leone: An Analysis of the FY 2026 Appropriation Act
DOI:
https://doi.org/10.47604/ijecon.3678Keywords:
Public Debt, Fiscal Space, Budget Analysis, Sierra Leone, Debt Servicing, Development FinanceAbstract
Purpose: Sierra Leone’s FY2026 Appropriation Act reveals a fiscal structure in which public debt servicing exerts strong pressure on fiscal space. This paper examines how debt-service obligations constrain the government’s ability to finance key development sectors, using the FY2026 national budget as the central analytical reference.
Methodology: The study adopts a qualitative and document-based analytical approach, drawing on data from official Ministry of Finance documents, including the FY2026 Appropriation Act, Budget Estimates, and IMF–World Bank debt sustainability assessments. The analysis shows that with NLe 8.63 billion allocated to debt charges out of a NLe 27.72 billion Consolidated Fund appropriation, debt servicing absorbs nearly 31% of available resources. When considered within the broader NLe 30 billion expenditure-plus-net-lending envelope, debt servicing still accounts for about 29% of total government spending.
Findings: The findings indicate that rising debt-service obligations increase rollover risks, restrict fiscal space, and limit the government’s capacity to invest in essential sectors such as education, health, agriculture, water, and public infrastructure.
Unique Contribution to Theory, Practice and Policy: The paper concludes that strengthening revenue mobilisation, improving debt management strategies, and prioritising concessional borrowing are necessary to expand fiscal space and support sustainable development.
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