By Ramatoulie Jawo
The Minister of Finance and Economic Affairs, Hon. Seedy Keita, on Friday informed lawmakers that the country’s debt interest is set to rise by 15%, from D5.11 billion in 2024 to D5.88 billion in 2025.
During his appearance before Parliament to present the budget, Hon. Keita introduced the 2025 appropriation bill for consideration. He explained that the projected increase in debt interest is primarily due to a 63% rise in interest payments on external debt, as well as higher payments related to the 30-year bond.
“The Debt Interest is projected to increase by 15% from D5.11 billion in 2024 to D5.88 billion in 2025 Because of an expected 63% increase in interest payments on external debt as well as the expected increase in interest payments on the 30-year bond. Overall Debt service interest payments plus amortization is projected to reach D11.01 billion in 2025 from D7.50 billion,” he told the lawmakers. In line with the government’s fiscal consolidation goals, Hon. Keita also revealed that the budget deficit for 2025 is projected to decrease to D2.7 billion, or 1.4% of GDP.
Hon. Keita highlighted that the GLF deficit, which stands at D198 million (0.1% of GDP), is the lowest average deficit in the past 10 years.
“The deficit will be financed in line with the medium term debt strategy objective of meeting financing needs at minimum cost, subject to a prudent degree of risk. In view of the high gross financing needs to be driven mainly by short term domestic debt maturities and expiring debt deferrals, the MTDS prioritizes, reprofiling short term into long term debt and reliance on concessional external borrowing,” he said.
He noted that despite the fiscal pressures, public debt is expected to remain on a sustainable path. Saying that the 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 the 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 said.
He explained that the macro fiscal framework underpinning the 2025 Budget is faced with risks that have potential to cause deviations. “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 crystallize they may undermine the projected economic growth, inflation, exchange rate and ultimately public finances,” he said.