Much remains to be done – Mr President!
A rejoinder (Courtesy of Bintumani On-line forum)
7 July 2010
One of the missing link to Sierra Leone’s economic
problem is the tacit neglect of the stock market
project that former president Kabbah left
uncompleted that should have been forcefully
followed through by the APC government.
This is because the stock market has an important role
to play in economic development. It is an important
wheel for economic growth, as there is a long-run
relationship between stock market development and
economic growth. Stock market development has direct
impact on corporate finance and economic
This institution is important because financial
intermediation supports the investment process by
mobilizing household and foreign savings for
investment by firms. It ensures that these funds are
allocated to the most productive use by spreading
risks and providing liquidity, so that firms can
operate the new capacity efficiently.
Financial markets, especially stock markets, have
grown considerably in developed and developing
countries over the last two decades, and several
factors have aided in their growth. Amongst them,
are improved macro-economic fundamentals, such as
monetary stability and higher economic growth.
General economic and specific capital market reforms,
including privatization of state-owned enterprises,
financial liberalization, and an improved
institutional framework for investors, have
encouraged capital markets development.
Unfortunately, the APC government is not interested in
doing honest work that will create the necessary
macro-economic, socio-political environment that
will engender the confidence and trust for honest
people to participate in the economy of Sierra
The publicly owned - moribund state enterprises, whose
sale the IMF recommended, managed by political
cronies and relatives of the president, are a drag
on the economy because of their colossal
Instead of these people establishing an investment
company that can market the sale of these companies
to serious investors, there was this talk about
DENI, and the nirvana and paradise it was going to
offer Sierra Leone.
What happened to DENI?
Unless and until the macro-economy improves, our
economic future is doomed. It is market forces that
channel investments to those who have the
wherewithal and entrepreneurial spirit and know-how
to invest, not the invisible hand of the government,
like president Koroma is doing. It is the market
that selects winners and losers not politicians for
parochial and selfish interests.
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