Another Expensive Experiment Financed By Taxpayers

By Abdul Rahman Bah

The Government of Sierra Leone is facing growing questions over its fuel subsidy policy after the Minister of Information and Civic Education, Chernor Bah, acknowledged that the government is reconsidering its earlier commitment to phase out subsidies and is preparing to inject additional public resources into the fuel sector.

The disclosure has raised concerns about whether the government is drifting away from the fiscal commitments contained in its Extended Credit Facility programme with the International Monetary Fund (IMF), particularly at a time when the administration continues to tell the public that public finances are under severe pressure.

Responding to questions about the government’s commitment to limit subsidies and transfers to Independent Power Producers and other subsidy arrangements, Minister Bah explained that the original understanding was for subsidies to be strictly limited in 2026, with spending capped at about 0.18 percent.

But instead of moving decisively towards the complete phasing-out of fuel subsidies, the government now appears to be preparing a different strategy.

Minister Bah said the government is negotiating and looking for additional resources to cushion the impact of fuel prices on citizens. He argued that allowing market forces to determine prices without government intervention could place an unbearable burden on ordinary Sierra Leoneans.

According to him, the government is therefore being forced to make difficult choices between supporting fuel prices and financing other national priorities.

The Minister’s explanation, however, exposes the difficult balancing act confronting the administration. If government continues to subsidise fuel, it must find additional money to finance the subsidy. If it redirects more resources towards subsidies, other sectors of the economy may have to suffer cuts.

The fundamental question is whether Sierra Leone can continue operating such a system without creating another fiscal problem.

Minister Bah likened government budgeting to a household trying to survive on a limited income. He explained that when resources are limited, government must decide which areas deserve priority and which expenditures must be reduced.

But the fuel crisis has become particularly sensitive, because increases at the pump affect virtually every aspect of economic life. Higher fuel prices immediately translate into increased transport fares, higher food prices, rising production costs and additional pressure on already struggling households.

The government’s challenge is therefore not simply about the price of petrol or diesel. It is about how the country manages an economy where citizens are already struggling with the rising cost of living.

What is particularly striking is the government’s emerging plan to become more directly involved in the fuel business.

Minister Bah confirmed that government is considering a strategic intervention in the petroleum sector that could see the state becoming involved in fuel importation, storage and wholesale distribution.

That would represent a major shift from the traditional position in which the government primarily regulates the sector while private companies handle the commercial business.

The Minister explained that government could potentially become involved at different levels of the petroleum supply chain, including importing fuel, maintaining strategic stocks, storing petroleum products and participating in wholesale distribution.

The argument is that such intervention could give government greater influence over the market and prevent excessive price shocks from being passed directly onto consumers.

But the proposal also raises serious questions about efficiency, accountability and the potential financial risks to taxpayers.

If government becomes an importer, storage operator and wholesaler, who will bear the losses if international oil prices rise or if the government is unable to sell its stock at a commercially viable price?

And perhaps more importantly, what safeguards will prevent political interference, procurement problems or inefficiencies from turning the proposed state intervention into another expensive burden on the public purse?

Sierra Leone has witnessed numerous state-led initiatives where noble objectives eventually became costly exercises because of weak management, inadequate transparency or insufficient accountability.

The government must therefore explain exactly how this proposed fuel strategy will work before taxpayers are asked to finance it.

Minister Bah also referred to the importance of strategic fuel stocks, suggesting that government wants to establish reserves that could protect the country during international disruptions.

Such a policy could have merit, particularly given the vulnerability of small economies to global fuel shocks. But strategic reserves require substantial capital, secure storage facilities, professional management and strict accountability.

The public will need to know how much money government intends to invest, where the fuel will be stored, who will manage the facilities, how frequently stocks will be replenished and what independent mechanisms will monitor the transactions.

More troubling is the question of subsidies for mining companies. While protecting ordinary consumers from sudden fuel-price shocks can be defended as a social policy, using taxpayers’ money to subsidise fuel consumed by large commercial mining operations requires far greater justification.

Mining companies are commercial enterprises that generate substantial revenues from their operations. The government must therefore explain why scarce public resources should be used to reduce their fuel costs when ordinary Sierra Leoneans are struggling to pay transport fares, feed their families and meet basic household expenses.

A fuel subsidy designed to protect vulnerable citizens is one thing. A subsidy that indirectly reduces the operating costs of profitable corporations is an entirely different proposition. If mining companies can afford large-scale investments, equipment, exploration and commercial operations, it is difficult to justify why taxpayers should carry part of their fuel bill, unless there is a clearly demonstrated national economic benefit.

The government should publish the full cost of any such arrangement and identify precisely who benefits from the subsidy.

At the same time, Minister Bah’s remarks suggest that the government is aware that its fiscal room is extremely limited.

The administration cannot simultaneously promise fiscal discipline, commit to IMF conditionalities, increase subsidies, finance strategic fuel reserves and take on commercial responsibilities in the petroleum sector without clearly demonstrating where the money will come from.

Government revenue cannot be treated as an unlimited pool.

Every Leone allocated to fuel subsidies is a Leone that may not be available for hospitals, schools, roads, electricity, social protection or other essential services. That is why the fuel policy requires more than political assurances. It requires transparency.

The government must tell citizens how much has already been spent on fuel subsidies, how much additional money is being requested, how much is projected to be spent before the end of 2026 and how the expenditure will affect the country’s IMF-supported fiscal programme.

It must also explain whether the new strategy has been formally discussed with the IMF and whether the Fund has accepted the government’s decision to reconsider the subsidy trajectory.

Minister Bah indicated that the government does not want to return to negotiations without a clear strategy, and suggested that additional subsidies are being reflected in the new budget. That admission makes parliamentary scrutiny even more important.

When the proposed budget reaches Parliament, lawmakers should demand detailed figures rather than simply approving broad allocations.

The public deserves to know whether the government is genuinely protecting vulnerable citizens or postponing a difficult fiscal decision.

Sierra Leoneans are already paying the price of economic hardship. They should not also be expected to pay indefinitely for poorly designed policies.

The government’s proposed entry into fuel importation, storage and wholesale distribution could either become a strategic intervention that protects national interests or another expensive experiment financed by taxpayers.

The difference will depend on transparency, competent management and strict accountability.

For now, the government’s fuel strategy leaves one uncomfortable question hanging: if the subsidy was supposed to be phased out under the country’s fiscal commitments, why is government now preparing to spend more money to keep it alive?