By Sylvester Samai
Debt dependency in Sierra Leone is not a recent development. Post-independence, Sierra Leone faced significant challenges in achieving self-sustained growth, often depending on loans from international institutions like the World Bank, International Monetary Fund (IMF), and other bilateral partners. However, the administration of President Bio, which came to power in 2018, inherited a debt situation that has only worsened due to external economic pressures and domestic governance issues. The debt dependency issue deepened under Bio’s SLPP government as they pursued determined development projects aimed at improving infrastructure, healthcare, and education—sectors that require massive funding. The Free Quality Education initiative, one of the flagship policies of Bio’s administration, has been a noble endeavor but one that requires continuous funding, often supplemented by foreign aid and loans.
Under the SLPP administration, Sierra Leone’s debt situation has become more precarious, reaching levels that have made debt servicing a heavy burden on the national budget. The debt-to-GDP ratio has continued to rise, a sign of economic strain that not only limits fiscal flexibility but also creates a cycle of borrowing that is difficult to break. This cycle is worsened by the fact that much of the debt is earmarked for critical projects that do not generate immediate revenue, meaning Sierra Leone is accumulating liabilities without corresponding assets to balance the scales.
The burden of debt has created significant challenges for President Bio’s government, which faces the difficult task of managing fiscal responsibilities while keeping development projects on track. With much of the national revenue directed toward debt repayment, little remains for other pressing needs. As a result, the government has often struggled to meet its obligations in areas like healthcare and infrastructure, areas critical for the well-being of citizens and the country’s long-term development.
Beyond financial strain, debt dependency has significant political and economic consequences for Sierra Leone’s sovereignty. International lenders and institutions often impose strict conditions on loan agreements, conditions that require the government to implement specific economic policies and reforms. These requirements have constrained the SLPP’s ability to act independently, limiting its options to manage the economy according to its vision. Instead of having the freedom to prioritize national needs, the government is often compelled to adopt policies that serve the interests of its creditors, even when such policies may not align with the immediate needs of Sierra Leoneans.
For example, structural adjustment programs demanded by lenders frequently involve reducing government spending and introducing austerity measures. These conditions are not only politically unpopular but can also aggravate social issues by reducing funding for social services and increasing poverty rates. As Bio’s administration grapples with fulfilling these loan conditions, it finds itself in a challenging position, often forced to justify decisions that impact the very population it pledged to uplift.
President Bio’s administration came to power with an ambitious agenda, promising to transform Sierra Leone through improved healthcare, education, infrastructure, and job creation. However, debt dependency has slowed these development goals. The SLPP’s Free Quality Education program, intended to provide universal access to basic education, has encountered funding challenges due to the high cost of debt servicing. Infrastructure projects, which are essential for economic growth, have either stalled or slowed down significantly.
Moreover, the government’s attempts to attract foreign investment have been less effective due to the perception that Sierra Leone is financially unstable. Investors are often wary of economies with high debt levels, as this indicates a greater risk of economic collapse and policy instability. This perception has led to fewer job opportunities, reduced economic activity, and ultimately, less tax revenue to support the government’s budget. As a result, Bio’s administration is caught in a vicious cycle: without investment, it cannot grow the economy, and without a growing economy, it cannot escape its debt dependency.
The SLPP’s debt challenges under Bio have direct implications for the social fabric of Sierra Leone. The economic pressure created by debt servicing has limited the government’s ability to invest in social programs that are crucial for addressing poverty, healthcare access, and unemployment. With resources increasingly diverted to meet debt obligations, citizens face the brunt of reduced social services. The youth, a majority demographic in Sierra Leone, find themselves with limited opportunities for education and employment, leading to frustration and potential unrest.
Furthermore, the strain of debt has hindered the government’s response to crises. During the COVID-19 pandemic, for instance, Sierra Leone struggled to mobilize resources for healthcare and economic relief due to limited fiscal capacity. Such vulnerabilities are exacerbated by the debt situation, leaving the country exposed to both global and local shocks without adequate means to respond effectively.
Recognizing the unsustainable nature of its debt, the SLPP government under President Bio has made efforts to address the issue. The administration has sought debt relief from multilateral institutions, negotiated for longer repayment terms, and aimed to reduce reliance on new loans. President Bio has also emphasized the need for increased domestic revenue generation as a way to reduce dependence on external funding. However, these measures have had limited success, as structural economic issues persist.
The government’s approach has also included attempts to diversify the economy, focusing on sectors like agriculture and tourism that can provide steady revenue. Yet, diversification is a long-term solution that requires initial investment—resources that are scarce due to the debt burden. For Sierra Leone to break free from debt dependency, the SLPP government must find a sustainable way to balance debt servicing with growth-oriented policies that generate revenue and reduce the need for external borrowing.
Debt dependency has become an exhausting burden for the SLPP government under President Bio, shaping the administration’s policies, straining the economy, and challenging the government’s ability to fulfill its promises to the people. As the country grapples with this reality, the path forward requires careful, strategic planning and a commitment to reducing reliance on foreign debt. A sustainable approach, emphasizing economic diversification and domestic revenue generation, may offer a way out of this dependency. However, this solution requires time, resources, and a focused effort from the government, as well as the support of the international community. Only through such comprehensive measures can Sierra Leone hope to achieve the economic independence necessary for meaningful, long-lasting development.