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Sierra Leone Business: Salone stock of domestic debt reached Le4.52 trillion in 2017

Total domestic debt stock comprising of marketable and non-marketable securities reached Le4.52 trillion (US$594.37 million) end 2017, this is according to the Ministry of Finance Public Debt Bulletin. Conferring to the figures, the marketable securities include treasury bills and treasury bonds whilst, the non-marketable securities include Ways and Means Advance to the Government and verified domestic arrears. The Financial Secretary stated that when the stock end of 2017 of Le4.52 trillion was compared to its end of 2016 position of Le3.62 trillion, there was an increase of Le907.58 billion, equivalent to a growth of 25.09 percent. Marketable securities it says increased by 33.53 percent, mainly on account of the 364-day treasury bills, which rose by 42.40 percent, from a position of Le2.62 trillion in 2016 to Le3.73 trillion in 2017. The stock in the non-marketable securities decreased by 5.65 percent due to the reduction in the 3-year treasury bond and a planned redemption of Le7.5 billion in the 10-year Treasury bond. On holdings of Government Securities, as at end December 2017, 61.76 percent of Government securities were held by commercial banks, whilst Holdings of Bank of Sierra Leone and Non-Bank Public were 27.82 percent and 10.42 percent respectively. Holders of Treasury Securities in Sierra Leone are mainly classified into Banks and Non-Bank Public. The bank public consists of the commercial banks and the central bank, whilst the non-bank public includes NASSIT, Discount Houses, Other Financial Institutions and the General Public. According to the data from the Ministry, the holdings by the Commercial Banks, Non-Bank Public and the Bank of Sierra Leone increased by 25.64 percent, 12.59 percent and 29.15 percent in 2017 relative to 2016 respectively. The huge rise in the BSL holdings, it says was on account of the end-year Ways and Means Advances, whilst the increase in the Non-Bank Public Holdings by 12.59 percent was due to a rise in the holdings of Discount Houses. The share of marketable and non-marketable securities as at end December 2017 were in the ratio of 83.8 percent and 13.3 percent respectively, whilst, others, including ways and means advances and suppliers arrears amounted to 3.0 percent. When aggregate demand was compared to aggregate offered amount during the period January-December 2017, there was an aggregate over-subscription of Le697.53 billion. The total amount of Treasury Bills that was supplied during the period amounted to Le3.99 trillion. Demand and Supply of Marketable Securities in 2017 During the period January-December 2017, total treasury securities which matured, offered and demanded, amounted to Le2.94 trillion, Le3.96 trillion and Le4.66 trillion respectively. Interest paid on treasury securities for the year 2017 amounted to Le535.28 billion. When compared to the total interest paid on treasury securities in 2016 of Le140.75 billion, there was huge increase of Le394.32 billion, equivalent to a growth of 280 percent over one year. The huge interest payments in 2017 were on account of rising borrowing appetite by Government, resulting in higher yields on Treasury Securities. Interest payments on 364-day Treasury Bills rose to Le488.20 billion in 2017 from Le74.82 billion in 2016. Table 4.4 shows interest payment on quarterly basis for 2017. Total interest paid on Marketable Treasury Bills Le71.51 billion. The interest paid on Treasury Bills amounted to Le463.38 billion in 2017 whilst that alone amounted to Le460.78 billion, indicating a Non-Marketable Treasury Bills amounted to huge change of 462.41 percent when compared to 2016 interest payments of Le81.93 billion. The total interest paid on treasury Bonds and Ways and Means Advances for 2017 were Le71.52 billion and Le12.42 billion respectively. Also, interest paid on the 1-year-Treasury Bonds Securities amounted to Le59.09 billion, an increase of 17.29 percent when compared to its 2016 position of Le50.38 billion.

By Zainab Iyamide Joaque

Monday February 11, 2019.

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