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Billions of Leones Borrowed by the APC government Will Haemorrhage Sierra Leone’s Economy

The Sierra Leone Telegraph Editorial Team
18 April 2009

The President has laid down the gauntlet for his party officials, Ministers and supporters at the 2009 APC convention held in his home town - Makeni. But what is rather odd and striking about his speech, was the absence of any reference to his government’s real economic achievements thus far.

The convention ought to have been an opportunity for the leader and his disciples to review their performance against the much talked about ‘Agenda for Change’ manifesto pledge.  Should we then therefore expect to see the publication of a mid-term progress report on efforts to combat unemployment and poverty?

Since raising the question as to whether the private sector or the economy for that matter is safe in President Koroma’s hands, we have in the last few days read various ministerial pronouncements of significance, to convince doubting Thomas’s that the government indeed does not have a coherent Private Sector or Economic Development Strategy. What is in place is a ‘patch work quilt’ of disjointed and discretely funded projects, dotted across the country, which have been inherited from President Kabbah’s government.  

Most of the government’s projects are aimed at meeting the priorities and objectives of the Poverty Reduction Strategy Paper and the Millennium Development Goals, handed down by the international donors.  Not surprisingly, the frustration of the previous Minister of Finance and Development, David Carew, at the lethargic response of the donors in meeting their funding obligations was strongly expressed before being shuffled out of his job by the President.

The die has now been cast – the government has this week set its own defining moment of truth, when it announced that; “Bumbuna will be the defining moment of APC Government's achievement this first term.” (Cocorioko News, 13 April 2009).This surely will be one of the STANDARDS by which the PERFORMANCE REPORT CARD of the government will be marked come 2012. 

It was welcoming to read that the Minister of Information, Ibrahim B. Kargbo in his usual charming tone, stated; “very soon President Ernest Bai Koroma will turn the switch on at Bumbuna and will soon start supplying electricity to Sierra Leone.”

But no sooner had I finished writing this piece, including the declaration that; ‘We, the patriotic citizens of Sierra Leone, who do not view national achievements from a partisan, regional or tribal perspective, are delighted with the news about Bumbuna and can hardly wait for the day when President Ernest Koroma fulfils THE FIRST OF HIS MANY PROMISES to the Sierra Leonean people’, came this whopping report from AWOKO (15 April 2009):

“It dropped like a bombshell when President Koroma yesterday admitted that the eagerly awaited Bumbuna electricity which is expected this April has faced serious setback and will not be due until the middle of the rainy season.” This is very serious, I lamented. No rain – No Bumbuna – No electricity. This is plain talk and simple, but COSTLY. Was the supply of water not factored into the Bumbuna Project Plan, before setting the date for commissioning?

Without wanting to sound pessimistic, what if it does not rain much this rainy season, as climate change seems to be taking its toll? Does it mean that we all have to wait for another year, or even longer for Bumbuna to start functioning? But how could April, being the end of the dry season, have been chosen in the first place as the switch-on date?

It seems the optimism for an imminent economic recovery conveyed by Information Minister - I. B. Kargbo just twenty-four hours  prior to the President’s televised speech, was not matched either by his ministerial colleagues; Messrs Samura of the Finance Ministry and Momodu Kargbo, Deputy Minister of Finance. In his speech delivered in the USA, Momodu Kargbo mentioned (Patriotic Vanguard, 13 April 2009), that;

“The Government of Sierra Leone is in the business of providing goods and services, and you are all welcome to be part of this venture that is aimed at turning the country around.”

 No, Minister. Government does not create wealth and therefore should not be in the business of providing goods and services for the people of Sierra Leone. The government’s role and focus must be to create an enabling, private sector business friendly environment, which encourages new business start – ups and promotes business growth. Encouraging Sierra Leoneans living abroad to come home to invest and create jobs is excellent. But as I once again remind the APC government:

  • The President has given us no indication as to what practical and financial support businesses will receive from his government in the next twelve months in order to kick start Private Sector led economic growth of 10% GDP annually.

  • The government needs to guarantee access to affordable finance; access to a pool of skilled and trained workforce; access to suitable industrial premises, managed workshops and business incubators; provision of reliable energy and water supplies; good roads and telecommunication networks. These are just the building blocks upon which a modern economy is built. Industry in Sierra Leone needs them NOW.

Granted that the government has been in power for just less than half its first term in office, eighteen months is nevertheless sufficient enough for the government to show professional leadership and vision, as to where the country is heading and how we are going to get there. Rhetoric must be backed by ACTION.  

Another harsh reminder came from the Minister of Finance, Dr. Samura Kamara himself this week (Awareness Times News, 14 April 2009), when he reportedly divulged that, the biggest threat to Sierra Leone is unemployment. He stated that a huge percentage of Sierra Leoneans lack capital to invest in the commercialized sector. He said that most of the commercial banks operating in the country are owned by foreign nationals.

Does that mean that President Koroma’s government has given up in ensuring that the Banks play fair in their dealings with indigenous businesses that require affordable start – up or working capital?

The Business Counsellor and Coordinator for the Joint UNIDO/AG funded Entrepreneurship Development and Investment Training Programme, which currently supports a group of 21 potential indigenous entrepreneurs, warned that although many of the participants already have micro and small business experience and good business ideas, they will struggle to get a head start, as “there are limitations and constraints for business start ups which they are likely to face in a country where lending institutions are reluctant to support start - ups or have limited or no micro finance facilities” (Cocorioko, 15 April 2009).

These official policy statements and reports would appear to give credence to critics of the government’s Private Sector Development Strategy, that more needs to be done in order to kick start the economy, if the government is serious about tackling poverty. And this comes at a time when the government is printing more money by selling over 200 Billion Leones of Treasury Bills, through the Bank of Sierra Leone (Government’s Treasury Bills Announcement, Awareness Times; 14 April 2009).

If one should believe that this additional Public Sector Borrowing requirement authorized by the President, is needed in order to plug the gaping hole left in the government’s coffers as tax revenue dwindles, then Sierra Leone’s economic decline is set to get worse than was previously anticipated. The government is currently struggling to match current budgetary spending with tax revenues, hence the over reliance on donor support.

The sharp decline in mining revenue, business and personal taxation is ‘haemorrhaging’ the public purse, yet Ministers continue to spend as though the Leone is going out of fashion.  Instead of taking heed of the former Finance Minister’s warning, he was quickly shuffled out of his job. It is odd for a Finance Minister to be removed from office after just eighteen months in the job. This will surely affect investors’ confidence.

As government ministers look up to Ivan Davies, the British Minister,  to make good on his promise to provide £28 Million grant-in-aid, the people of Sierra Leone are left wondering what impact the recently announced  200 Billion Leones Public Sector borrowing requirement (sale of Treasury Bills) will have on inflation.  

A pertinent question that must be asked therefore is - how could a government that is trying to encourage the Private Sector to borrow from banks to pursue growth, is itself out in the financial market place looking for money to borrow? Will this not add to the woes of the very businesses and potential entrepreneurs the government claims to be seeking to help?

By competing in the financial markets with private investors, the government is inadvertently driving up interest rates and the cost of borrowing in Sierra Leone. This will further compound the difficulties faced by indigenous entrepreneurs starting up, or trying to expand their existing businesses.  The simple economic rational here, is that;


The First Vice President of the Sierra Leone Chamber of Commerce, Industry and Agriculture, Mr. Tunde Cole is urging ‘government to be proactive by addressing the challenges faced by businesses, and create a proactive environment for business to thrive’ (AWOKO, 15 April 2009). Perhaps one should no longer continue to ask whether the Private Sector is safe in the hands of President Koroma, but to conclude that IT IS NOT.

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