Sierra Leone Telegraph: 31 January 2018
Sierra Leone’s economy is in tatters. IMF withdraws funding. A few months ago, the Sierra Leone Telegraph published a story about the declining performance of the Sierra Leone economy. It warned that the government is in serious paralysis, as funds meant to support economic growth were being siphoned by ruling APC officials to pay for election campaign.
The Sierra Leone Telegraph report also said that: “Key government officials and ministers – including the president, have in the last six months taken their eyes off the economy to focus on their political survival. The Koroma government has lost control of the economy. “ (Photo: President Koroma out campaigning with his party’s presidential candidate – the former finance minister Samura Kamara, who is being blamed for the country’s economic mess).
“It seems the only job at State House now, is the packaging and selling of the president’s chosen candidates for the presidency and vice presidency at next year’s elections – Messrs Samura Kamara and Chernoh Bah, whose unpopularity has become a huge headache for ruling party rank and file members – who are deeply unhappy about the president’s unilateral imposition of their candidacy.
“Sierra Leone’s economy is in dire straits. Inflation is rising much faster than expected. Basic food prices – such as rice and cooking oil have gone up by almost 30% in the last six months. The government is struggling to pay the salaries of public sector workers.
“There is serious political tension in the streets. Investor confidence is at an all-time low. World Bank and IMF funding have been frozen until after the elections in March 2018, following allegations that ruling APC government officials are misappropriating and siphoning public funds to pay for their political campaigns.
“The value of the Leone to the dollar and sterling is declining fast. The country is importing far more than it is exporting. With its continuing reliance on falling international aid and meagre mining export revenue for its survival, the Koroma government is struggling to meet its basic financial commitments as foreign aid is cut by almost 60%”, the Sierra Leone Telegraph reported in November 2017.
And in March 2017, the Sierra Leone Telegraph also published these statements:
“The economy of Sierra Leone is going through its toughest phase, since the end of the Ebola epidemic. The government has run out of cash – donor funds have declined massively, inflation is rising out of control, unemployment remains chronically high, taxation base has declined, public sector workers are going without pay, public services are facing huge financial constraints, and government contractors are not getting paid.
“The government has now realised that without private sector investments, it cannot diversify the economy and expand growth. Yet, public sector borrowing is rising fast – now standing at over $2 Billion.
“Foreign direct investments have dried up, as corruption, lawlessness, the arbitrary use of state powers, poor governance and impunity, drive away good investors from Sierra Leone. And with the economy stuck in deep recession, since the fall in global market prices of iron ore – the country’s major export, government’s revenue has dwindled. (Photo: Samura Kamara – the former finance minister blamed for Sierra Leone’s economic woes, is seen here last Friday in Freetown – in his red party shirt, among hundreds of okada riders campaigning to become president. What a funny old world).
“But this decline in government’s ability to raise cash, has had little effect on government’s unscheduled spending. The ruling APC is spending far more on trying to win the 2018 elections to stay in office, than on real programmes aimed at addressing abject poverty and massive unemployment in the country.
“Ministers are now concerned more about bleeding every cent out of the treasury in preparation for next year’s elections, triggering an upward spiral in bribery and corruption in high places.
“International donor funds for next financial year – starting April 2017, are likely to face massive cuts – if not frozen. China’s promise of millions of dollars in cash aid has not materialised. The Chinese government has recently announced a rolling back of public expenditure in 2017/2018.
“The International Monetary Fund (IMF) is once again looking to rescue the government, from what many analysts believe is an economic mess of the government’s own making.
“Despite warnings about reckless spending, poor budgetary allocation, and high level of corruption, the Koroma government has continued to spend its way out of an economic austerity it has created – by ramping up its infrastructure development budget, with millions of dollars in contract kickbacks going into the pockets of corrupt ruling APC party officials and ministers,” the Sierra Leone Telegraph reported in March 2017.
Today, there is further damning report published by the Africa Confidential publication. It confirms that the ‘The government is spending IMF money on trying to win the election, not on agreed measures for economic recovery. The Fund has suspended payments.”
According to Africa Confidential: “A confidential despatch by United States diplomats in Freetown has laid bare the cause of strained relations between President Ernest Bai Koroma’s government and the International Monetary Fund; the cable also voices what Sierra Leone’s international partners really think about its prospects for economic reform.”
At the conclusion of the IMF visit to Sierra Leone on 28th March 2017, the head of the IMF team – Mr. Wakeman-Linn issued this warning statement:
“While the economy is projected to expand by 6 percent in real terms in 2017, the macroeconomic situation remains challenging. End-period inflation increased significantly in 2016, to 17.4 percent from 10.1 percent in 2015. The fiscal deficit is estimated to have increased from 4.6 percent in 2015 to 8.2 percent in 2016.
“The budget was under severe pressure, leading to expenditure overruns in goods and services and domestic capital expenditures late in the year and arrears to domestic contractors and suppliers.
“On the external front, renewed iron-ore exports contributed to a strengthening of the trade balance, but it was not enough to compensate for the decline in donor support.
“As a result, the current account deficit is estimated to have widened from 17.5 percent in 2015 to 19.9 percent in 2016,” the IMF said in March 2017.
Today, there is confirmation by the latest Africa Confidential report, that the IMF has indeed stopped throwing money into the ruling APC’s big black hole that is fuelling massive corruption in high places and used for funding the party’s election campaign, as government ministers and officials down tools to head for the election campaign trail.
There is only one job in town now (Photo above), for all ruling party government ministers and public officials: Election campaign to keep their jobs and stay in office for another five years, despite serious economic mismanagement and poor governance.