President Koroma’s missing Billions

6 March 2012

Every household struggling to manage its finances, understands that desperate times very often call for desperate measures. And for governments – this may well mean increasing taxation, cutting down on  spending, increase borrowing, or sell reasonable  amounts of treasury bills and bonds.

Yet, few governments in democratically run countries, would raid the pension funds of their cash strapped tax payers, in order to pay for its rising cost of staying in power.

But in Sierra Leone, this is a routine policy of a government that has lost its ability to manage the economy effectively, generate sufficient revenue through taxation, and is reluctant to reduce its avaricious appetite for spending.

Sierra Leone’s debt has risen from almost zero in 2002 – thanks to the multi-lateral agreement brokered by the World Bank in 2001, which wiped off the country’s crippling debt – to an estimated $900 Million in 2011.

This growing debt burden is predicted to reach $1 Billion by the end of 2012, if the government does not take drastic and immediate steps to curtail its wasteful spending on capital programmes, which cannot be sustained by current rate of economic growth.

But what is even more alarming, is the government’s routine policy of raiding the pension and social security contributions paid by poor cash strapped tax payers, held in account by the country’s National Agency for Social Security (NASSIT).

It is now emerging that the total cash missing from government ministries and state-run enterprises runs into Billions of Leones. 

According to the report into the country’s 2010 public accounts, published by the National Audit Office, Billions of Leones have been siphoned off by those in power, from the NASSIT funds – meant to be invested.

The monies have gone missing and cannot be accounted for, dating back to 2009.

The report states that although the government has accepted liability; ‘no repayment has been made as at the end of February 2010,’ in order to replenish the depleted social security funds.

There have been growing concerns among trades unions, civil society groups, opposition political parties and tax payers, about the poor performance of NASSIT, in investing and accounting for hundreds of Billions of Leones paid to the fund by workers across the country for their retirement.

NASSIT’s investments portfolio focuses largely on the co-financing of national development projects, such as housing, hotels and sea ferry service, which critics say have yielded very little return, and in some instances have recorded massive financial loss.

NASSIT, as with all state-run enterprises, has been heavily criticised for its lack of effective management, poor governance, and corruption.

Those appointed to manage the country’s state-run enterprises are invariably inexperienced and unqualified cronies and patrons of the ruling party – a trend that is not new in Sierra Leone.

But in response to criticism of the government’s policy of routinely raiding the nation’s depleting pension funds, party supporters have been quick to point out; “In the UK, do you know the amount of pension black holes there are? Billions of pounds Sterling! It is called deficit financing.”

Few in Sierra Leone would be prepared to make such analogy in justifying what the country’s national audit office has fallen just short of describing as ‘corruption’.

In any case, the UK’s so called pensions ‘black hole’ has long been coming, and is caused by shifts in global finance and poor performance of investment portfolios, held by the big pension investment companies.

And the 2007/2008 sub-prime mortgage crash in the United States was the final nail on the coffin of UK pension funds. Pension funds in the UK have performed very badly in the last decade.

There is no evidence of the British government raiding the nation’s pension pot to plug its public spending deficit. But in Sierra Leone, what is apparent is the government’s orgy of pension looting, done routinely through corrupt means.

The National Audit Office now has difficulty in getting the government to account for the missing Billions of Leones, taken out of the nation’s pension funds.

And it seems the government’s corrupt policy of routinely raiding the coffers of state-run enterprises, also extends to ministries, departments and agencies (MDAs). They too have had difficulty escaping the long and shadowy hands of those in power, entrusted with fiduciary responsibility.

According to the 2010 Audit Office Report, the Ministries of Trade and Industry; Social Welfare and Children and Gender Affairs; and Foreign Affairs, have all fallen prey to corruption and the lack of probity.

It is reported that the Ministry of Trade and Industry cannot account for over 639 Million Leones missing from its accounts, whilst the Social Welfare, Children and Gender Affairs Ministry has a whopping 402 Million Leones unaccounted for.

Similarly and worryingly, the accounts of Local Councils, in particular the Freetown City Council whose Mayor has recently been indicted and now standing trial for the misappropriation of public funds, tells the same story of criminality.

Hundreds of Millions of Leones have disappeared from state coffers, meant to tackle poverty, poor health care, falling standards of education, and rising youth unemployment.

What is obscenely ironic, is that Sierra Leone continues to be classed as one of the poorest nations in the world, with international aid accounting for over 45% of public spending.

Yet, government ministers and those responsible for managing the affairs of state, are busy creaming off public funds through corruption.

 

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