The Sierra Leone Telegraph: 5 March 2013
The government has borrowed far more than it can afford, to get this infrastructure in place. But will it pay off?
Critics say that with over 90% of the entire country in perpetual darkness – most days of the week, only a handful of citizens will enjoy the benefits of fibre optic.
Computers, mobile phones and other telecommunication equipments need electricity to function. And in Sierra Leone, electricity is a luxury for far too many, as the cost of fuel to run domestic generators keeps rising.
The truth is that Sierra Leone has one of the lowest rates of access to the World Wide Web, and at an appalling speed. But it seems this image is about to change, with the country now linked to the West African Fibre Optic Cable Network, if the government get its sums right.
Work on developing the project started in June 2010, when Sierra Leone signed a financing agreement with the World Bank, to modernise the country’s information communication technology (ICT) platform.
When completed, the fibre optic cable technology, will provide mobile phone network companies and internet ISP providers operating in the country, with faster connection speeds.
Will the rates charged by telephone companies be significantly reduced, as a result of the fibre optic cable?
Technically, they should be, depending on the business model that the government puts in place in the next few weeks and perhaps months, and the level of market competition encouraged by the government.
But fibre optic is not coming to Sierra Leone for free. It has been a very expensive journey, which may prove unprofitable to the government in the long-run, if it does not get its operating business model right.
As president Koroma makes it clear at the market testing event held in Freetown on the 20th February, 2013; “The business model will be fine-tuned from the public policy perspective in the next couple of weeks.
“Let us also note that we are part of the West Africa Regional Communications Infrastructure Program (WARCIP). Hence the objectives of WARCIP, Sierra Leone Chapter, are to increase the geographical reach of broadband networks and reduce costs of communications services within the territory of Sierra Leone.”
It is estimated that the government has borrowed over $100 million, in order to become a part of this West Africa Regional Communications Infrastructure Program.
Initial funding was levered, after the government received a credit line in the sum of $31 million from the World Bank, as part of the $71.5 million it had approved to boost ICT communications sector generally, and the development of broadband technology in particular, across the African continent.
But president Koroma is under no illusion that the fibre optic project must yield a high return on investment. Not only is the World Bank’s investment at stake, but so too is the loan borrowed from the Chinese government last year, and a few others.
In October 2012, the government of Sierra Leone signed a US$15 million loan agreement with China, to help link the country to the Africa Coast to Europe (ACE) cable network.
President Koroma must get his sums right.
Yet, there are genuine fears that the new ‘Fibre Optic Platform’ managed by the Sierra Leone Cable Limited – a company set up by the government, could become a money making machine for the president’s cronies and senior party officials, such as former information minister – I.B.Kargbo, who is said to have bought massive amount of shares in the company.
The country’s telecommunications gateway, known as Sierratel, has a long history of being a loss making state enterprise, run by self-serving, corrupt and inept ruling party appointed officials.
But president Koroma knows that he will have to do better than his predecessors, to make sure that public investment in fibre optic, does not become another state-owned gravy train for his cronies.
Speaking in Freetown last week, he said:
“It is worthy to note that the private sector is now part of the Sierra Leone Cable by virtue of its partial divestiture.
“This is an example of the Public and Private Partnership model that my government sees as one of the best ways to move this country towards prosperity. This is exactly why my Government gave the opportunity to private telecoms operators in Sierra Leone to buy shares in the Sierra Leone Cable Limited.”
But many in Sierra Leone are disappointed that already, the average Sierra Leonean is losing out on the opportunity to own a stake in this newly formed company – Sierra Leone Cable Limited.
Huge volume of shares, valued at billions of Leones are said to have been bought by government ministers and friends of the president.
The challenge for the president is enormous.
The country’s telecommunications laws must be overhauled, in order to ensure a fair and competitive environment for mobile phone companies and internet service providers.
Failure to restructure the market and update the laws, will make it difficult for new companies to enter the market and offer the technology at affordable cost to the people of Sierra Leone.
Answering to doubters, as to whether the government has done enough to create an open and competitive telecommunications market, president Koroma said:
“Let me briefly comment on one critical matter relating to the liberalization of the international gateway. This has been thoroughly discussed with various stakeholders, and the Ministry of Information and Communications is currently working with other stakeholders to revise the telecoms law of 2006, as amended in 2009, in order to ensure fair play in the industry.
“We are definitely taking this country to the era of faster, cheaper and more effective communications. The transformation is unstoppable.”
The ACE cable network is owned by France Telecom. It has laid down 17,000 kilometre telecommunications fibre optic cable from the coast of France to South Africa, connecting 23 countries along the way.
The potential benefit for Sierra Leone being a part of that network is breathtaking. President Koroma has taken out a separate loan from the Islamic Development Bank to pay for the underground fibre optic network, which will run across the country, covering 660 kilometres.
The cost of the loan for this intra-country fibre optic cabling project is a whopping $28.27 million.
Official figures show that so far, the president has indebted the country to the tune of over $75 million, in order to modernise the country’s telecommunications and ICT superhighway. The true cost is over $100 million.
But speaking at the fibre optic market sensitising event a few weeks ago in Freetown, the president is confident of the benefits such investment would bring to the country. He said:
“The essence of this project is to develop applications for the use of this huge bandwidth. Examples of these applications are e-education, e-health, e-tourism, e-commerce, e-banking, and e-government, to name but a few.
“Over and above the foregoing, the available bandwidth gives Sierra Leoneans access to an array of internet based products, including high speed web surfing, video searching, Online education, Video conferencing, Cloud computing, Business process outsourcing and many more. Most importantly, there will be massive reduction of the costs of communication.”
The sacked former minister of information and communication, who was responsible for overseeing the delivery of the fibre optic project – Alhaji Ibrahim Ben Kargbo, now serving as adviser to president Koroma, also spoke at the market testing and sensitisation event.
Commenting on the signed funding agreement between the government and the World Bank, he did not respond to accusations that he had embezzled millions of dollars from the project.
The former minister is yet to be investigated by the country’s Anti-Corruption Commission for the allegations of misappropriation of public funds, meant to support the successful and timely delivery of the fibre optic project in Sierra Leone.
The project is said to have over-ran by a year and with huge rising costs, in excess of $20 million.
Will president Koroma get his sums right?