Sierra Leone Telegraph: 26 April 2018:
The last twelve months have been excruciatingly tough for ordinary Sierra Leoneans. The previous APC government, led by president Koroma, ran the economy into bankruptcy before being thrown out of office at the ballot box last month.
Inflation – prices of basic necessities, have skyrocketed to an annual average of over 30% in the last three years, as the costs of imported goods rise.
The value of the Leone against the Pound and the Dollar, has fallen by over Forty-Percent in the last twelve months.
One British Pound now costs almost Eleven Thousand Leones, compared to Seven Thousand Leones this time last year.
Interest rates – the cost of borrowing, which is now estimated at about 30%, have remained stubbornly high since 2010, when the Koroma government’s appetite for increased spending on non-essential items began to grow faster than it could afford to repay back.
And so too has the country’s foreign debt grew exponentially, since the APC government took office in 2007 when foreign debt was about two hundred million dollars. Today, they have left office, and the newly elected government is saddled with a huge debt burden of over $3 billion.
Shortly before leaving office, the APC government were told by the IMF that they will no longer be making any further advances into the government’s coffers, after the government had failed to curb spending and find ways to generate revenue to pay for its reckless spending – especially on election campaigning.
The outgoing APC government may have struggled to find innovative ways to diversity the economy, stimulate the economy to create employment, increase value-added exports to generate revenue, expand the country’s taxation base. But those in power were far too obsessed with amassing personal wealth from the nation’s meagre finances through corruption.
The Koroma government had long ran out of cash to pay salaries of public sector workers. Not even pensioners have been spared the agony of living without receiving their well-earned pensions, as those in power persistently used the nation’s pension fund as their private piggy bank to supplement their income.
State-owned enterprises (SOEs) have become the personal enterprises of those running them – APC political party card holders, family and friends of those in power.
Rather than making profit for the taxpayer, SOEs are being heavily subsidised to stay afloat as cash cows for the well connected.
Commercial Bank Ltd., which is the government’s own private bank, and several private banks, are in serious financial trouble. They are carrying millions of dollars in debts on their balance sheets, that have not been repaid by government ministers and officials.
Commercial Bank was established to provide much needed funding for development projects across the country. But ministers and their families and friends have abused their powers and political connections.
Today, the newly elected SLPP government is having to take tough action to curb excessive government spending, so it can balance the books and be able to meet its most pressing financial commitments without further borrowing.
But critics say that president Julius Maada Bio has not gone far enough. So, what are the measures he has today announced? In a statement published last night, president Bio has decided on the following:
1. Vehicle Purchase
With immediate effect, purchase of vehicles by all Ministries, Departments and Agencies (MDAs) and public corporations is banned until a new Fleet Management Policy is put in place.
2. Wage Bill Control
All public sector employees with the exception of those under charged emoluments and those covered by an Act of Parliament who have attained the retirement age of 60 years are relieved of their duty effective May 31st, 2018. Accordingly, the Accountant General and the respective heads of MDAs are authorised to remove the names of such persons from the payroll by that date.
3. Payment for Fuel, Telephone and Internet Services
Payment for fuel, telephone and internet services to public servants in Ministries, Departments and Agencies for their residences are suspended with immediate effect pending a new benefit policy.
4. Overseas Travel
All commitments by MDAs relating to overseas travel including cost of tickets should be within their approved budgets and must be cleared with the Ministry of Finance to ensure they are cost-effective and within budgetary limits.
5. Contract Prices
In line with Section 23 of the Bank of Sierra Leone Act 2011, prices for contracts shall be quoted and payable only in the local currency (Leone). All existing contracts already quoted in foreign currency shall therefore be paid in Leones.
6. New Contracts
All new contracts by MDAs and public corporations should be cleared by the Ministry of Finance to ensure they do not constitute a financial risk to the national budget.
7. Embassies and High Commissions
(i) All revenues collected by Sierra Leone’s diplomatic missions overseas shall be transferred to the Consolidated Revenue Fund with immediate effect. By the same token, the Ministry of Finance will effect regular disbursements to support their operations.
(ii) All political appointees in Sierra Leone’s diplomatic missions overseas including Ambassadors and High Commissioners and all Attachés are hereby relieved of their duty effective April 30th, 2018.
8. New Recruitment
All MDAs and public corporations shall refrain from any new recruitment without the prior approval of the Office of the President.
Will these tough measures announced last night by president Julius Maada Bio be enough to curb rising inflation, stem the rapid fall in the value of the Leone, generate sufficient cash to pay the salaries of public sector workers, meet the huge cost of implementing the free education that president Bio has promised, get the electricity and water utilities to function efficiently?
No, it surely will not, but it’s a good start that must quickly lead to action and bigger announcement about ways to restructure the economy through diversification, stimulate the creation of hundreds of thousands of jobs, broaden the nation’s taxation base, negotiate with the IMF and World Bank, stimulate private sector investments, curb rampant corruption, and enforce law and order in the country.
This surely must be Bio’s agenda for the next six months. And this is how his stewardship will be judged for the next five years in power.