Prince Jacob Macauley: Sierra Leone Telegraph: 12 August 2019:
People of Sierra Leone have come to realize that we cannot keep on doing the same thing and hope to get different result.
The economic policies that have been followed are not helping; and we have an ongoing economic crisis as a nation. High cost of fuel, the rise in foreign exchange rate and the lack of private sector investment, are all part of the problem.
The sad reality is that we are looking for foreign investors to come and rescue us. But we have never seen anywhere in the world where foreign investment leads and domestic investment follows. It is always domestic investment that leads and foreign investment follows.
As a country, we have to build confidence in our own economic capability. And the way to do that is to provide an economic stimulus, driven by a strong plan to progressively transform our economy from a commodity dependent economy.
In my view, I think the government is getting advise from the usual suspects – like the IMF, for some reasons and for some years, since the global financial crisis.
The IMF was wrong on the issue of capital controls; they were wrong on the issue of inflation targets; and they were also wrong on the issue of trade unions and labour market.
And so as a nation, we all should know that there is a shift that has taken place internationally, including recognition of austerity policies in Europe which is absolutely disastrous.
But it seems as if our treasury and key elements of government – and I am not saying the entire government of President Bio, but there are key powerful members in the Bio government, that are linked to this element because they testify to these rating institutions and agencies; they testify to global financial institutions.
It is high time they stop looking to these institutions for direction; and its time also that we take responsibility and our sovereignty for our own economic direction.
Ordinary people are suffering in the country, there are no jobs for the youth, affording ‘bread and butter’ items have become more difficult for everyone now; not only for the average man alone.
What international experience shows since the global financial crisis in particular, is that countries have taken responsibility to implement large scale public investment programs for example, to implement a degree of capital control, etc.
Doing all these things that are aimed at protecting the population and boost the economy, these countries have managed to weather the global financial crisis; while those that follow the advice of deregulations and regularization – as we are, are facing the worst now.
Also, the central bank long ago should have done better to salvage the country’s economy by cutting interest rates.
One important point the government should take into consideration is that it is because of their policies why the economy is contracting now, and why we are where we are and have been for a number of years.
They need to introduce a counter-cyclical fiscal monetary policy, but what they are doing now is the opposite by tightening our monetary and fiscal policies, making large cut backs.
In other words, public investments suffer and as a result the cost of capital has become too expensive for small businesses and manufacturers to invest in boosting the productivity capacity of the economy.
What we need urgently and critically to help boost the country’s economy is drastic structural reform, and a government investment stimulus package.