Sierra Leone launched its fourth Medium-Term National Development Plan (MTNDP) in 2019 to accelerate the country’s development. This plan set an ambitious vision for the country’s sustainable development path and targets stable economic growth, alongside progress in poverty reduction, education, health, and peace and cohesiveness. Plan realization is an important step in the country’s journey out of fragility towards its vision of becoming an inclusive, green, middle-income country by 2035, but a key bottleneck is lack of financial resources. The total estimated cost of the MTNDP is US$8.15 billion for the period 2019 to 2023. According to the Ministry of Finance fiscal projections for this period, discretionary and non-discretionary expenditures including direct development (domestic and foreign), totaled US$6.60 billion, there remains a financing gap of US$1.55 billion. Bridging this gap requires a wide range of resources that go beyond public finance, as well as policy reforms for equal participation of women, especially from rural communities.
In view of the above, UNDP commissioned Development Finance Assessment (DFA) to support the realization of the MTNDP. The DFA scanned the financing landscape, analysed financing trends and opportunities, and assessed the potential for various forms of public and private financing to contribute towards the objectives of the MTNDP. It produced 18 recommendations adopted in the plan implementation chapter of the MTNDP including the establishment of an Integrated National Financing Framework (INFF). INFFs are the architecture used within government to bring together a coherent approach to financing national sustainable development that incorporates public and private forms of financing. As such, the Ministry of Planning and Economic Development undertook the preparation of an INFF strategy supported by UNDP to operationalise DFA recommendations. The INFF prescribes several instruments and policies that government can use to promote growth through resource mobilisation and job creation in the economy in line with the overall objectives of the MTNDP. As part of the operationalisation, a new secretariat was established at the Ministry of Planning and Economic Development (MOPED) supported by the Joint SDGs Fund (UNDP and UNCDF) to support institutions strengthen domestic resource mobilisation to support SDGs financing in the country. A national coordinator superintends the activities of the secretariat in line with the INFF strategy.
Implementing partners such as the Ministry of Planning and Economic Development, Fiscal Decentralisation Division of the Ministry of Finance, National Revenue Authority, Sierra Leone Chamber of Commerce and National Social Security and Insurance Trust have been implementing Joint SDG Fund project activities for almost two years now towards enhancing domestic resource mobilisation for development.
Contributing outcome and output
United Nations Sustainable Development Cooperation Framework (UNSDCF) 2020-2023 Outcome 2: By 2023, people in Sierra Leone benefit from more gender- and youth-responsive institutions that are innovative, accountable, and transparent at all levels and can better advance respect for human rights and the rule of law, equity, peaceful coexistence, and protection of children, girls, and persons with disability
Output 2.6: Government has strengthened Public Financial Management
Output 2.7: Government-wide national M&E system of development results strengthened
Outcome 4: By 2023, the most vulnerable, particularly women, youth,
adolescents and children (especially girls), and persons living with disabilities are empowered and benefit from increased social protection
services, economic and social opportunities
Output 4.5: Vulnerable groups have improved entrepreneurial and, financial literacy, and employability
Country Programme Document (CPD) Output 2.4: Capacities of targeted local councils improved to deliver on devolved functions and manage resources
The Medium-Term National Development Plan (MTNDP) for 2019-2023
Pillar-I: Domestic Public Finance
Pillar-II: Private Sector Investment and Financial Services, and
Pillar III: Development Cooperation
Implementing Partners
Ministry of Planning & Economic Development; Ministry of Finance
Bank of Sierra Leone; Directorate of Science; NASSIT National Pension Fund; SLANGO; FAMBUL TOK; Sierra Leone Association of Commercial Banks; Sierra Leone Association of Microfinance institutions; and Sierra Leone Chamber of Commerce
The project theory of change relies on several interventions that work in tandem with activities planned or underway to improve domestic resource mobilization through improved policies, systems, and outreach. Increasing government revenues for enhanced social service spending (Activity 1) and more lending to the private sector, as well as financial inclusion (Activity 2), are mutually reinforcing to ensure that both economic and social development advance in tandem, as neither will be as successful without progress on the other.
Activity 1 – Improved Government Revenue Collection
If Public-Private Dialogue occurs under this JP between NRA and businesses, particularly those businesses currently operating in the informal sector, to build trust and better understand obstacles to tax payment by businesses;
If awareness is raised among the public on how taxes are used to benefit the country through Public-Private Dialogue under this JP and events like annual Taxpayers Day planned initially for 2020 (AfDB support);
If more Tax Preparers are trained to support SME tax filings through an ongoing program (AfDB support);
If NRA improves its overall tax administration capability through data management improvements (IMF support);
If NRA adopts an integrated tax administration system (ITAS) consolidating different accounts for the same taxpayer into a single account for a more simplified and transparent system (World Bank support);
If NRA enhances collection of the existing Goods and Services Tax though an ongoing program that includes expanding the use of electronic cash registers (AfDB support);
If NRA has improved capacity for tax collection and auditing of businesses and individuals due to the digitization of tax filing and collection systems and support on compliance by Tax Inspectors Without Borders under this Joint Programme (JP);
Then, GoSL will increase revenues and increase spending on SDG social programs, while and other parties, such as donors, the private sector, and the diaspora, will recognize this commitment and the improved fiscal environment and increase financial flows to Sierra Leone for SDG realization,
Because the culture will transition from one of tax avoidance to responsible tax payment, SMEs will have the support and tools necessary to be tax compliant, NRA will increase its capacity and efficiency for tax collection and auditing, and the country will demonstrate its full commitment to funding the SDGs and stabilizing the fiscal environment
Activity 2 – Increased Domestic Capital Accumulation
If Public-Private Dialogue occurs under this JP among the Ministries of Finance, Planning, Trade and other state institutions, financial institutions, and civil society groups representing consumers to identify types of savings products that would encourage more privately held savings to be deposited in the formal banking sector;
If financial institutions design savings products that respond to the needs of individuals and SMEs and market these products throughout the country;
If those lacking financial literacy skills are well trained to improve their confidence is dealing with money matters and the formal banking sector (ongoing UNCDF project);
If consumer confidence in the banking system is enhanced by the development and publicizing of legal protections for banking consumers (ongoing UNCDF project);
If Public-Private Dialogue occurs under this JP between Bank of Sierra Leone, financial institutions, and potential third-party banking agents to develop a plan to reach areas of the country not currently served by commercial banks;
If Bank of Sierra Leone continues to develop its agent banking guidelines with technical assistance under this JP and support is provided for implementation systems;
If ongoing initiatives with the Ministry of Finance, the Bank of Sierra Leone and mobile phone service providers to develop mobile banking services throughout the country are accelerated under this JP;
If the national pension fund (NASSIT) is provided with technical assistance under this JP to digitize contributions from businesses and promote use of the fund, thus making it easier for businesses of all sizes to contribute to the fund;
If NASSIT is provided with technical assistance under this JP to improve its governance and assess the composition of its investment program and consider modifications to better channel investments towards SDG realization;
Then participation in the formal banking sector will increase along with use of savings products; groups currently lacking financial literacy and access to banking services, including women in rural areas, will have improved skills and access; and, more funds will be available for SDG investment,
Because increased funds accumulated in savings products by individuals and SMEs, and the increased capital in the national pension fund, would be available for lending to the private sector, and a re-oriented investment program of the national pension fund could direct more funds to large-scale SDG investment projects.
Job Features
