SIERRA LEONE

Sierra Leone is a unitary constitutional republic with a unicameral parliamentary system. According to the 1991 Constitution, the president is both the head of state and the head of government. The president appoints a cabinet with the approval of the members of parliament (MPs). Members of parliament are not permitted to hold office concurrently in the cabinet. The president is elected through universal suffrage for a maximum of two consecutive five-year terms. Legislative power is vested in the parliament, which is composed of 146 members, serving for five-year mandates. Of these, 132 members are directly elected under a first-past-the-post system from across the districts, and the remaining seats are reserved for paramount chiefs elected through the electoral college of the districts chiefdom councils. The last parliamentary elections took place in March 2018.

The current 1991 Constitution does not make provision for devolution of functions to subnational governments. In 2004, after a period when subnational governments had been abolished since 1972, the country embarked on a countrywide decentralisation programme. The Local Government Act (LGA 2004) was approved, encouraged by international donors engaged in post-conflict governance, which re-created local councils. The regulation acknowledged the ‘dual system’ of local councils at municipal level, and chiefdom councils at the sub-municipal level, and included transitional provisions (2004-2008) on decentralisation and chiefdoms, towards the amalgamation of subnational levels and devolution of functions. However, structural ambiguities have led to tensions between the local councils and chiefdoms and challenges to the process of decentralisation, resulting in inefficiencies and power struggles. In 2011, the government reinstated the position of district officer as the national government principal representative to enhance the national government’s relationship with traditional authorities (chiefdom councils, which increased from 149 to 190) and the co-ordination of non-devolved functions of other ministries with local councils at district level. In 2016, the Constitutional Review Committee recommended the inclusion of a local government and decentralisation chapter in the Constitution.

Under the LGA 2004, a decentralisation secretariat, part of the Ministry of Local Government and Rural Development (MLGRD), has been granted responsibility for implementing decentralisation reforms. The Local Government Service Commission (LGSC) was also established in fulfilment of Section 35 of the LGA 2004. The Commission is responsible for providing support to local councils regarding regulatory, performance management and management functions, in order to establish effective human resource systems at the subnational level, and regulate the local council civil service. A local government finance department was created within the Ministry of Finance to manage transfers and accountability. Lastly, an inter-ministerial committee (IMC) on decentralisation has been established as the highest national political body in this domain, chaired by the vice-president of Sierra Leone and including four representatives of local councils (usually mayors). It arbitrates between local councils and provincial administrations, ministries, departments and governmental agencies.

The National Decentralisation Policy of 2010 was updated in 2020 with the aim of better aligning the role of local councils with the country's national medium-term development plan for 2019-2023 and the implementation of the Sustainable Development Goals.

TERRITORIAL ORGANISATION
Municipal Level [1]	INTERMEDIATE LEVEL	REGIONAL LEVEL	TOTAL NUMBER OF SNGs (2021)
15 district councils 6 city councils 1 municipal council
Average municipal size: 362 590 inhabitants
22			22

[1] Name and number of sub-municipal entities:
190 chiefdoms

OVERALL DESCRIPTION: Sierra Leone acknowledges a single tier of local self-government, the district. Since 2018, there are 22 local councils, made up of six city councils and one municipal council in urban areas, and 15 district councils in predominantly rural areas.

In terms of administrative organisation, the country is divided into four provinces (the Northern, North-West, Southern, and Eastern Provinces) and a region known as the Western Area. Local councils’ boundaries are delimited within provinces. The Western Area is governed by a rural council and the city council for Freetown, the country’s capital.

So far, local elections were held every four years - the last ones took place in March 2018. According to the revised Decentralisation Policy of 2020, local council elections will now be conducted every five years. The next local council elections are due to take place in 2023.

MUNICIPAL LEVEL: Before their de-activation in 1972, several acts established the typology of Sierra Leone’s local councils, which included urban district, district, town, township and city councils. Even with the de-activation of local governments, however, town councils remained de facto in place.

In 2004, local councils were re-established. In 2006, through the Local Government (Assumption of Functions) Regulations (Statutory Instrument No.13 of November 2004), the status of the towns and Freetown was converted into a city/municipal status. This innovation was included in the LGA through a 2017 amendment. Besides, several localities in Sierra Leone are designated as towns. Those refer, generally, to larger settlements within districts and do not correspond to electoral wards.

Since 2008, the heads of the local councils are mayors (city council) and chairpersons (district council), elected by universal direct suffrage. Deputy mayors are indirectly elected by local councillors, who in turn are elected by universal suffrage in each ward.

The districts are divided into chiefdoms. The 190 chiefdoms are the lowest administrative level. According to the regulation, chiefdoms are subordinated to local councils.

Nationally, there are 446 electoral wards, according to a 2017 amendment to the Wards (Boundary Delimitation) Regulations. All district and city councils include paramount chief councillors, selected by the paramount chiefs of the district. In addition, paramount chiefs are members of the ward committees of the local council in their chiefdom. In 2017, the Provinces’ (Administration Divisions) Order led to a de-amalgamation process and the increase from 145 to 190 chiefdom councils.

Key changes in the revised Decentralisation Policy 2020 and Local Government Act 2004 (under review) include higher level of qualification required for occupying the post of local council chairperson and higher salaries for the said post, de-politicising of the posts of chairpersons and mayors, restructuring of local council hierarchies, and creation of boroughs in Freetown municipality. Proposals for creating upward promotion for chief administrators in councils, with the view to increase motivation, improve transparency and staff effectiveness were also included in the revised decentralisation policy.

HORIZONTAL COOPERATION: The LGA 2004 re-activated the provincial coordination committees. These bodies are responsible for coordinating the activities of local councils in each province. The mayor and chairperson of each local council in the province are part of the committee with voting rights; local council chief administrators also participate, ensuring that local councils collaborate in the execution of joint programs in which they have an interest, and reviewing and coordinating the provision of public services in the province.

As an enforcement of the LGA 2004, the Local Government (Assumption of Functions) Regulation (Statutory Instrument No. 13 of November 2004) aimed at guiding the devolution of 80 policy functions to local councils until 2008. Despite delays in the devolution of functions, 71 out of the 80 devolved functions slated for devolution have either been partly or fully devolved from about 17 different ministries, department and agencies. Additional 17 central government functions were passed on to local councils in early 2019.

In addition, the inter-ministerial council was reactivated to coordinate strategic decisions on decentralisation with a renewed commitment from national government to deepen decentralisation, particularly local strategic planning, issuance of building permits, and preparation of land use plans as well as planning and building control amongst other responsibilities. Under this devolution framework, responsibility for many basic social services has been transferred to local councils. Chiefdom councils can collect local tax revenue on behalf of the national government, but have no functional responsibility (2009 Chieftaincy Act). The COVID-19 pandemic, however, disrupted the process at all levels.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Municipal level
1. General public services (administration)	Civil status register, celebration and registration of civil marriages, registration of births and deaths; cadastres and maintenance of customary law (in areas with a paramount chieftaincy system)
2. Public order and safety	Fire protection (shared with national government) and basic firefighting; civil protection (exclusively the local government probation services); drug control and prevention programme (shared with national government)
3. Economic affairs / transports	Licensing of small canoes and attendant fishing gear; Establishment and management of fish ponds and inland lakes; agricultural extension services (crop and animal); maintenance of roads and urban road infrastructure (shared with national government); local economic development, tourism (shared with national government)
4. Environment protection	Sanitation and solid waste management; tree planting (shared with national government); education and sensitisation on environmental issues, consumer protection, slaughterhouses.
5. Housing and community amenities	Water management; provision of local public address equipment; strategic local plans; issuance of building permits; local museums
6. Health	Primary and secondary health (health service delivery, health promotion, drug control and prevention); hospital (including procurement of drugs for both peripheral health units and district hospitals-shared with national government); health protection (including education on environmental, fire prevention and public health issues, access to safe drinking water and food quality and safety)
7. Culture & Recreation	Maintenance and management of cultural (museums and libraries); sport and leisure facilities
8. Education	Primary education (schooling) and secondary education (shared with national government); school supervisors
9. Social Welfare	Childcare and family welfare services; gender and child advocacy (shared with national government); disability issues; community-based organisations

Scope of fiscal data: 18 out of 22 local councils, representing around 85% of total local councils’ expenditure and revenue

Ministry of Finance

Availability of fiscal data: Low

Quality/reliability of fiscal data: Low

GENERAL INTRODUCTION: In Sierra Leone, fiscal decentralisation took place as part of the local government finance committee (LGFC) in accordance with Section 52 of the Local Government Act (LGA 2004). The vast majority of expenditure on compensation of employees and infrastructure financing still occurs at the central government level. These are identifiable in the national budget and financial accounts presented to the parliament.

Local councils have financial autonomy to levy taxes and fees. However, this power has been challenged by unclear assignment of responsibility with chiefdoms.

Subnational government expenditure by economic classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure	9	0.5%	2.1%	100.0%
Inc. current expenditure	6	0.3%	2.1%	67.8%
Compensation of employees	2	0.1%	1.3%	-
Intermediate consumption	-	-	-	-
Social expenditure	-	-	-	-
Subsidies and current transfers	-	-	-	-
Financial charges	-	-	-	-
Others	-	-	-	-
Incl. capital expenditure	3	0.2%	2.3%	32.2%
Capital transfers	-	-	-	-
Direct investment (or GFCF)	-	-	-	-

EXPENDITURE: In 2020, audited financial statements were available for 18 out of 22 local councils (excluding Kailahun District Council; Kenema City and District Councils; and Kono District Council). Total expenditure for these 18 local councils (which can be estimated at round 85% of total subnational government expenditure) amounted to Le 213.4 billion (USD 74 million PPP or USD 9 PPP per inhabitant), accounting for 2.1% of total public expenditure and 0.5% of GDP. This represents a decrease of 4% compared to 2019 (when it amounted to Le 222.3 billion).

Most local councils had poor financial performance in 2019, with negative fiscal deficits. However, in FY 2020, most local councils were able to attain fiscal surplus balances – these include Bo District (Le 1.1 billion), Kono New Sembehun City (Le 842 million), Bo City (Le 1.5 billion), Bombali District (Le 3.9 billion) and Freetown City Council (Le 34.9 billion). However, four local councils reported negative fiscal balances in 2020.

Salaries of mayors, chairpersons and their deputies are included in the national budget. The 2020 national budget indicates an increase (compared to 2019) in remuneration for core staff and councillors of local councils, paramount chiefs, regent chiefs, chiefdom speakers and tribal heads in the Western area.

DIRECT INVESTMENT: Local councils have a very limited role in direct investment. They may invest in local public infrastructure (e.g., markets, slaughterhouses) mainly through the local government development grant provided by the central government with the support of external partners.

ⓘ No detailed data available for this country

There are mechanisms for collecting and consolidating subnational government fiscal data at the national level but they are partial and irregular. At national level, the largest share of public expenditure is on education with 21.4% of the total discretionary budget to support basic and secondary schools, followed by economic affairs and transport, and health. This budget includes primary and secondary education which are shared responsibilities of local councils and national government

In 2020, health represents the largest sector devolved to local councils, in particular for primary health care and secondary health services (district hospitals), which accounted for 31% of total transfers to local councils. The agriculture and food security and education sectors account for the second and third largest sectors, accounting for 7% and 6.6% of transfers to local councils, respectively.

Subnational government revenue by category
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	10	0.6%	3.0%	100.0%
Tax revenue	3	0.2%	1.3%	29.9%
Grants and subsidies	7	0.4%	-	64.7%
Tariffs and fees	0.5	0.0%	-	4.8%
Income from assets	-	-	-	-
Other revenues	0	0.0%	-	0.6%

OVERALL DESCRIPTION: With USD 82 million PPP, or USD 10 PPP per inhabitant, local councils’ revenue accounted for 3% of total public revenue and 0.6% of national GDP in 2020. There are three main sources of revenue for local councils: own-source revenue, grants for devolved functions, and transfers for services delegated from government ministries, departments and agencies.

According to the LGA 2004 (sub-section 4 of section 45), local councils are granted authority to collect local taxes, property taxes, licences, fees and charges, a share of mining revenues, interests and dividends. They remain highly dependent on grants from the central government for devolved functions. There are several challenges related to transparency and accountability issues and backlog in accounting. In addition, there is generally a lack of institutional capacity to mobilise and generate revenue at the local level, with wide disparities between municipal/city and district councils across the country.

TAX REVENUE:In 2020,tax revenues represent a little less than 30% of local councils’ revenue. There are three legislations that regulate tax collection. Following the de-activation of local councils in 1972, the Local Taxes Act of 1975 stated that they should be collected by a “local authority” (oftentimes, chiefdom councils), while the central government would determine tax precept. The LGA 2004 re-established local councils’ autonomy to set local tax rates, while chiefdom councils are supposed to collect and remit them to local councils. Hence the complexity of the relationship between the two entities. Moreover, the LGA 2004 did not repeal the Local Taxes Act. In parallel, chiefdoms gained more fiscal powers of their own, to collect revenues on behalf of the national government, (according to the 2009 Chieftaincy Act, later enshrined in the Chiefdom and Traditional Administration Policy of 2011). This results in a blurry fiscal framework, particularly in district councils where the power of chiefdoms councillors is significant and where they are able to influence their share of tax collection.

Local taxes come from five primary sources: the local (poll) tax, market dues, property taxes, business licenses, and other fines and levies. Part of this funding comes from the mining sector – the taxes levied are earmarked, formula-based, and are transferred from the central government.

The Local Government Act of 2004 empowers local councils to collect annual property taxes. On average in 2020, property tax revenue accounts for 66% of tax revenue and 20% of local councils’ total revenue. In 2020, in Freetown city council, it represented 74% of the city’s tax revenue and 41% of its total revenue. The Act provides local councils with the ability to set their own local tax rates. Reform efforts, however, have been repeatedly stymied, largely because of lack of political committed leadership. Most urban councils are able to generate a significant amount of revenues from property tax despite problems, such as the limited existence of property cadastres. In contrast, the property tax base in rural areas is much smaller and there is strong public opposition against property taxes in rural areas; therefore, rural councils are very reluctant to collect it. In 2020, the national government required local councils to implement the automation of property cadastre systems in city and municipal councils to facilitate the collection of property tax. This aims at gradually reducing their reliance on central government transfers.

GRANTS AND SUBSIDIES: In 2020, direct grants and subsidies accounted for 64.7 % of local councils’ revenue. According to the LGA 2004, annual transfers from the central government to local councils must be equitable and fair. In compliance with the requirements of the law, 26 transfer formulae for horizontal distribution make up a complex transfer system based on local council expenditure needs, availability of infrastructure and revenue raising ability.

There are three main categories of grants provided by the central government to local councils and identifiable in the national budget: the administrative grant, grants for devolved functions and the local government development grant. Local councils may also have access to grants from external partners, such as the World Bank or the African Development Bank.

The administrative grant component increased in the 2020 national budget. For example, in the 2020 national budget, the total renumeration for mayors/chairmen increased from Le 601.9 million per annum to Le 4.49 billion. Similarly, remuneration for deputy mayor/chairmen increased from Le 575.5 million to Le 3.17 billion. The administrative grant includes a support to ward committees. This support is meant to serve as basic incentive and to contribute to the operational cost of ward committees to strengthen civic participation.

The grant for devolved functions is regulated under the provision of section 46, sub-section 2 of the Local Government Act 2004. It states that local councils should receive earmarked grants for each devolved function (e.g., health, education, agriculture, rural water, social welfare, etc.). This forms the bulk of total resources available to local councils for operation and maintenance as well as participation in development plans. The grant also includes an unconditional block grant.

The local government development grant provides discretionary funds to local councils for local public infrastructure and sectoral local government development. Created in 2004, it is financed by the national government and development partners and support local councils’ participation in the Medium-Term National Development Plan (2019-2023) or the Sustainable Development Goals. Local councils are free to use these funds according to their priorities each year.

OTHER REVENUES. Other revenues, including tariffs and fees, accounted for just over 5% of local councils’ total revenues in 2020. The LGA 2004 gives both the local councils and the chiefdom council’s powers to collect fees and charges, which include services provided by the local council (including waste collection), market dues, business registration, and licences/fees and charges. In addition, local councils can also raise revenue from economic activities such as fishery, timber, revenues from mining and extraction of sand (or other building materials) in their jurisdiction. They can also receive interests and dividends, and any other revenue due to the government but assigned to local councils by the minister responsible for finance by statutory instruments.

ⓘ No detailed data available for this country

FISCAL RULES: The Local Government Act 2004 includes several provisions relating to local government financial management. Section 52 provides for the establishment of a local government finance committee at national level, to advise and follow up on the allocation of grants. Section 81 of part IX on accounts and audits states that “every local council shall keep proper books of accounts and proper records in relation to the accounts and shall, within the first quarter of the next financial year, prepare a statement of its final accounts in conformity with existing financial regulations”. Moreover, local councils’ financial statements and accounts must be sent to an auditor within a timeframe of six months after the end of the financial year. Finally, sections 103 to 107 of part XV on transparency, accountability and participation include several measures to combat corruption and promote transparency in local financial management, such as the need for local councils to take annual inventories of assets, to document all revenues in printed receipts, or to post financial reports on notice boards in each ward.

DEBT: According to the 2004 LGA, the Ministry of Finance (in particular the Local Government Finance Department) and the Ministry of Local Governments must provide authorisation (policy guidelines) and guarantees for local councils to take on debts. This is possible and allowed but has never happened in practice. No data are available on subnational government debt.

TERRITORIAL MANAGEMENT OF THE CRISIS: Sierra Leone started introducing COVID-19 precautionary measures many weeks before the first case was recorded on 31 March 2020. The COVID-19 management infrastructure was set up at the national level, nearly all decisions being taken at this level. The initial actions by the government included a ban on all public gatherings of more than 100 persons, restrictions on oversea travels (to and from) and a mandatory quarantine for people suspected to have contracted the virus or travellers coming from countries with local COVID-19 transmission cases exceeding 50. A lockdown was declared in the immediately aftermath of the outbreak with travel restrictions being intensified and an extensive testing programme introduced which required a high level of social compliance from the public. Other steps included the imposition of curfews and an inter-district travel restriction.

The Emergency Operation Centre (EOC) was activated to deal directly with the disease with support from an inter-ministerial committee which was set up to lead on all matters of COVID-19 policy. The country’s risk communications system on COVID-19 was enhanced with three public health laboratory facilities created as part of efforts to strengthen in-country diagnostic capacity.

The pandemic has had negative effects on Sierra Leone’s growth prospects. While the economy was predicted to contract in just a few months prior to the outbreak, from 5.4% in 2019 to 4.2% in 2020, real GDP declined by 2.2% reversing some of the earlier gains in poverty reduction, particularly in Freetown, where the impact has been severe. The decline led to a drop of business activity as households’ incomes fell and made it difficult for SMEs and other businesses to operate owing to lower demand and modified consumption patterns. For many businesses, this led to the adoption of cost-cutting measures such as the temporary laying-off of workers.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: In Sierra Leone, municipal and local governments have had limited decision-making powers regarding the COVID-19 response. Therefore, their role focused on the containment of the disease and social protection measures, which they sometimes performed with NGOs or local community groups.

In Freetown, one key measure during the lockdown was the delivery of emergency food packages to vulnerable residents living in informal settlements. This measure was critical in view of the food insecurity challenges that were steered by the restrictive measures used to contain the disease. The measure was complemented by an urban farming initiative that involved supporting individuals and youth groups to grow their own vegetables. In 2021, the World Bank, with contributions from the European Commission, provided livelihood support in the form of a one-time cash transfer to 29 000 households and informal sector.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: At the subnational level, travel restrictions and other socio-economic measures caused disruptions in the domestic supply chains, leading to a drop in domestic revenue. The collapse of businesses not only led to declines in income but the depletion of savings, as households struggled to secure daily food. This affected the livelihoods of the poorest and most vulnerable households who depend on unstable and insecure sources of income. Other seriously affected persons where those who depend strongly on remittances for their daily support.

In this context, subnational governments experienced severe budget shortfalls and revenue losses, which constrained their ability to deliver services and ensure productivity of the city economy. Impacts were worsened by challenges of access to the urban market of local agricultural products which led not only to food insecurity but also a small increase in poverty.

ECONOMIC AND SOCIAL STIMULUS PLANS: With the pandemic slowly fading out, the government has embarked on a series of recovery measures which involves improving the business environment (prioritising the tourism, trade, transport and manufacturing sectors) and strengthening governance institutions as part of its Quick Action Economic Response Programme (QAERP). This includes measures to reduce the burden of households who have faced increased hardship but also creating employment opportunities for individuals who had worked in the margins of the economy and are now the most hit by the pandemic.

The specific measures include the provision of cash transfers to vulnerable groups (and some others who lost their jobs due to COVID-19), while also providing concessional loans and/or tax deferments to local businesses, including seeking debt relief from the IMF and other bilateral and multilateral agencies to prevent a debt crisis. These actions are intended to prevent the further worsening of hardship and food insecurity on the people. Other actions include the extension of social services delivery to communities and the setting up of more effective and practical system of social safety nets and social protection programmes that prioritise poor and vulnerable groups.