By: Kemo Kanyi
The Minister of Finance and Economic Affairs, Seedy Keita, Friday informed lawmakers that the country’s public debt is expected to remain sustainable despite the pressures.
Minister Keita stated that public and publicly-guaranteed debt is projected to slow down to 63.1 percent of GDP in 2025 and is expected to maintain the downwards trajectory in the medium-term.
“The downward trend will be supported by the Government’s commitment to contain fiscal deficit below 1 percent of GDP, maintaining exchange rate stability, and minimizing the materialization of contingent liabilities from SOEs, PPPs and legacy issues,” he stated as he laid out the 2025 budget before the Parliament.
The finance minister, however, outlined that the macro-fiscal framework, underpinning the 2025 Budget is faced with risks that have the potential to cause deviations, adding that much of the risks are inclined towards the downside.
“These include macroeconomic risks which may emanate from global markets volatility and erratic supply of electricity. If they crystalize, they may undermine the projected economic growth, inflation, exchange rate, and ultimately public finances,” he explained.
On revenue and grants, minister Keita stated that there are risks related to delays or resistance in implementing reforms and donor fatigue, projecting that if this happens, revenue and grants may experience some shortfalls.
“The expenditure is also prone to risk related to climate change events. This may deviate
resources away from planned activities,” he pointed out. He continued: “The public debt portfolio is also exposed to exchange rate and refinancing risk. Movement in exchange rate and interest rates may affect debt sustainability.
The finance minister said poor financial standing among the majority of SOEs poses a significant risk to the Government in the form of contingent liabilities.
