Sierra Leone’s finance minister fights for his job amid serious economic malaise

Sierra Leone Telegraph: 8 August 2019:

Sierra Leone’s Minister of Finance – Jacob Jusu Saffa is today fighting to keep his job, as pressure mounts on president Julius Maada Bio to transfer him to another ministerial role, following increasing calls for his sacking.

Saffa is accused of incompetence and failing to turn the economy around as promised over sixteen months ago, during election campaign.

Opposition parties and critics say that Saffa cheated his way to the top job as finance minister, by pretending on radio and television on many occasions to have the answers to Sierra Leone’s economic problems.

The APC government of former president Koroma lost elections held last year, after the opposition SLPP launched a massive publicity campaign – led by JJ Saffa, against the credibility and poor stewardship of the APC government.

Saffa accused the Koroma-led APC government of incompetence and negligence in failing to address what he referred to as “bread and butter issues” affecting the people of Sierra Leone.

But today, Saffa himself is now facing similar accusations, as critics call for his dismissal as finance minister.

There is no doubting the fact that the Bio-led SLPP government inherited an economy that was almost bankrupt. (Photo: JJ Saffa – Right, with Chief Minister Francis).

But it is now more than sixteen months since SLPP came to office, and the people of Sierra Leone are getting impatient to see an improvement in their standard of living.

When SLPP won the elections in March 2018, inflation was about 17%. Since then, prices of basic goods and services have gone up by almost 3%, as most Sierra Leoneans struggle to cope with the rising costs of living.

The value of the Leone has fallen by about 20% since March 2018. The country’s over-reliance on the mining industry for its export revenue continues to take its toll. Gross domestic product (GDP) remains low at about 3%.

The government’s latest decision to review all mining contracts is likely to lead to many companies losing their licence. This could result in further decline in government revenue – at least in the short to medium term.

The continuing failure of the minister of finance to restructure and diversity the economy, is certainly destroying every chance of an economic recovery anytime soon.

Much needed investments in the fishing, tourism and agriculture sectors that should create employment for hundreds of thousands of people, widen the country’s taxation base, and boost government revenue, are yet to be made.

When president Bio took office over sixteen months ago, he announced key measures to curb what he referred to as financial leakages across government. But there have been serious failings by the ministry of finance in enforcing those measures.

Rather than think outside of the box and implement innovative strategies that will turn the economy around, the finance minister is instead being accused of becoming an IMF Project Manager, overseeing conditionalities imposed by the IMF.

In response to these criticisms and calls for the sacking of the finance minister, today the editor of the Global Times newspaper and a strong supporter of the SLPP government – Sorie Fofana, who himself was last year appointed chairman of the country’s Cable Company (SALCAB), has written in defence of the finance minister.

This is what he said:

“After he was declared winner of the March 31st 2018 run-off elections, Julius Maada Bio appointed one of his trusted political allies, Jacob Jusu Saffa as Finance Minister. Before the announcement of the first set of Cabinet Ministers, speculations were rife that Jacob Jusu Saffa was to be appointed as Chief of Staff at State House because of the spectacular role he played in the election of President Bio first as flag bearer and later as President.

“In opposition, J.J. Saffa was one of the SLPP spokesmen on the economy. He performed several roles during the campaign. He was Elections Coordinator, Spokesman for Julius Maada Bio and he represented Julius Maada Bio at several meetings with donor partners during the campaign.

“J J Saffa inherited a difficult portfolio, which he has managed, with determination to turn around. Under his watch, the Free Quality Education initiative (President Bio’s flagship program) is being implemented. Salaries are being paid on time. No more overdrafts borrowing to pay salaries. Road contractors are being paid. The Gratuity and End of Service Benefits for former President, Vice President, Cabinet Ministers and Diplomats have been paid, or at least 50% of it has been paid. It has to be said that the economy is not as rosy as he would have wanted it to be.

“These are difficult times! Business people are grumbling about the introduction of a raft of new taxes. The tax burden is killing small businesses. There are fewer imports of goods now than there was before April 2018.

“Let us, as a nation, be patient, as the President and his team work tirelessly to address the bread and butter issues that some of our compatriots complain about.

“One local newspaper yesterday called for the Minister of Finance, the Governor of the Bank of Sierra Leone and the Financial Secretary to be sacked. The question must be asked: Will sacking them now change anything? In several European countries, Finance Ministers are hardly sacked. They normally resign. Only people who believe in the President or Prime Minister’s agenda are normally appointed Finance Ministers.

“The SLPP Government inherited a huge debt burden. Presently, 60 to 70% of domestic revenue generated by this government is used for debt servicing, arrears payments and payment of wages and salaries. Only 30 to 40% is used for funding other recurrent and capital projects. To date, mining of Iron Ore is yet to fully resume. Besides, the US Dollar continues to appreciate globally.

“It has to be stated that most of these arrears were left behind by the APC administration of President Ernest Bai Koroma. This messy situation is what JJ Saffa inherited from the APC administration when he was appointed Minister of Finance. With a team of dedicated men and women in the Ministry of Finance, JJ Saffa has done his best to consistently fund the implementation of the Free Quality Education and to ensure the consistent delivery of social services.
Let JJ Saffa continue to dance!”

But will the hungry and desperate people of Sierra Leone continue to be patient? And for how long will the president continue to test their patience?

12 Comments

  1. I knew this should happen anytime soon, but the minister has the chance not just to keep his job but to actually make history by ending poverty and all other structural problems, and take the country to a new social economic level. He only needs to make one contact: Adeleke William.

  2. “Trump policies on China (tariffs) and other trade negotiations with NAFTA and co have brought a large part of the U S economic success.” Abdul Azeez. Mr. Azeeez, please give the forum a good explanation of how the Trump China tariffs have contributed to economic growth in the United States? Thanks.

    • Mr. Bakarr of all the things I wrote your only interest is on Trump tariffs which was not the gist of my contribution. I just reference how diverse policies can bring out different results based on the objectives. The focus is Sierra Leone, but given that you are only interested in Trump as some people seems to be triggered by his name, see this article below from Forbes on some of the gains the US has made over China.

      FORBES August 9, 2019
      Trade War Hurting China’s Economy

      Charles WallaceContributor

      Policy

      President Donald Trump talks to reporters on the South Lawn of the White House, Friday, Aug. 9, 2019, in Washington. (AP Photo/Evan Vucci)
       ASSOCIATED PRESS

      New signs emerged Friday that President Trump’s tariffs on Chinese exports are beginning to seriously impact the overall Chinese economy.
      The Chinese government reported that exports to the U.S. in July fell by 6.5%. It was the second month after Trump increased tariffs on $250 billion worth of Chinese goods to 25%. Imports from the U.S.. Also fell by 19.1%.

      Perhaps more alarming, the country’s producer price index turned negative, falling 0.3% from flat levels in the previous month. It was the first time the PPI has been negative in three years.
      Analysts say that the trade war with the U.S. Is forcing Chinese factories to sell their wares to wholesalers at a discount.
      Another key indicator, the manufacturing purchasing managers’ index (PMI) – which measures factory owner sentiment, registered 49.7 in July. Although this was slightly above June’s levels, a reading below 50 is a sign that the industrial sector is still contracting.

      The country’s National Bureau of Statistics reported Friday that the means of production – capital goods like machinery – fell by 0.7 % in the month.
      Trump has expressed hope that the declines in the Chinese economy will force the Beijing government to agree to terms of a new trade agreement when the two sides next meet in September. But the Chinese have accused the U.S. of instigating unrest in Hong Kong and allowed their currency, the renminbi, to fall in value against the U.S. dollar, signs that relations are worsening rather than improving.
      While U.S.-China trade has sharply declined since Trump began imposing tariffs a year ago, Beijing reported that trade with Europe and Southeast Asia rose in July.

  3. We have to continue to pray for the country and the current government. They are working tirelessly to improve the economy and the standard of living. Rome was not built in a day. Sierra Leone will rise up again under this administration and I believe there will be a turn around before this time next year. May God bless the leaders and the people of Sierra Leone.

  4. The president needs to find ways to help heal the economic problems in the country. It is unbelievable, and our people are suffering because of it. I hope there is a way to help the youth to get jobs or job training to bring the unemployment rate low for everyone in the country.

  5. Hey guys, if JJ Saffa is not doing well let the president replace him with someone who can do the job. We no longer have time for these tribalist and politically affiliated journalists who pose themselves with poor journalism.

    Let somebody competent pick up the job, okay. You guys should stop all this nonsense. This is about the country, not individual an thing. Mr. President, sack JJ and get someone better.

  6. Controlling the financial system, hence the economy of a country, is not like cooking a delicious food and eating it with pleasure immediately after its preparation. The effect/impact of all prudent monetary and fiscal policies take time to be noticed.

    The current period is the heating-up period of economic policies that have been implemented by a government that came to power about seventeen (17) months ago. Both the Governor of the Central Bank and Finance Minister in conjunction with the Financial Secretary are seasoned economists who are helping the country to contain from total financial collapse.

    If the country wants them to be sacked, who should replace them to fast-track the economic recovery process in the country. Or is it a way of setting up the President against his trusted minister and the other trusted economists in his government? I hope the latter is not the case.

    Not even the father of Macroeconomics (Sir John Maynard Keynes) can solve the current economic problem in Sierra Leone within six months. Never will that be. The policies of the current macroeconomic gains of the Trump administration in USA were implemented during the Obama era.

    As for the huge financial deficit which is being financed by external borrowing, causing the devaluation of the country’s currency and the high inflation rate, it is natural for any crumbling economy like Sierra Leone. Even the best economies of the world are in financial deficit of multiple trillions of dollars.

    The most important question for Sierra Leone is “in which sectors of the economy are these monies used to boost the economy of the country?”. I suggest that the President, in consultation with his competent economists, should critically think and examine the situation on the ground.

    I am totally convinced that the three prominent economists in President Bio’s government are doing the right things, but the impact will only be felt after the heating-up period.

    When former President J.J. Rawlings took over power in Ghana the country was in a far worse economic crisis than the situation in Sierra Leone.

    There is the need to applaud the current government for giving the country’s image a face lift at the international front. The image of the dark decades of the country is now transformed into that of a country ready to join the rest of the world to improve of the economic wellbeing of the population.

  7. What Mr Yajah said is the fact. These two countries put more pressure on Salone economy, as most people close to the border do business with Liberia and Guinea. Let’s give chance to the Minister to tie his belt tightly. Thanks.

    • Gentlemen (Mustapha and Yarja) I beg to differ with you on trade between our neighbouring countries weakening our economy. It is true though that both Guinea and Liberia are also facing challenges, but there are more goods coming from Guinea than going there from us. A visit to the border crossings can easily verify it. Guinea importers have far large financial muscles and can import huge quantities and benefit from economies of scale than their counterparts in Liberia and Sierra Leone.

      Yes, economic policies have long term effects but they also have short term and medium term impacts. Not all fiscal policies are long term in nature. This myths that the U.S. economy is as a result of Obama policies is not helpful. Hate him or love him it has to do with Trump for the large part. Obama’s administration itself mocked Trump during the campaign about waving a magic wand to restore jobs. The Obama administration confirmed that the economy cannot grow beyond 2% and that there is nothing to be done to restore jobs in middle America. Trump policies on China (tariffs) and other trade negotiations with NAFTA and co have brought a large part of the U S economic success. The media is painting Trump negatively but the economy is performing brilliantly. If on the other hand Trump policies have failed, people like you (Yarjah) will be quick to point out the unrolling of Obama’s policies as the factor.

      Back to SL, 16 months (25% of a government term) is a not too short a time as these problems were existing before the Bio administration. The economy has not been hit by any major external shock since the Ebola and fall in ore prices since J.J. Saffa – first as an opposition prescribing solutions. They need to do more the economic malaise is getting worse

  8. Jacob Jusu Saffa does not have a magical elixir to wave away Sierra Leone’s chronic economic problems in fifteen months. Given the circumstances, the man has done an excellent job. Fiscal policies do not impact the economy overnight as they are constrained by timelags.

    If the United States is today enjoying the lowest rate of unemployment in fifty years, it is because of the fiscal policy initiatives that were implemented by president Barack Obama and his men, and not what president Donald Trump has been doing in two years of chaotic governance.

    In the case of Sierra Leone, much patience should also be exercised given that the IMF conditionalities that the country had to implement last year made a bad situation worse. Yet the country had no choice but to deal with the IMF, since the morally bankrupt APC government of Ernest Koroma had totally bankrupted the economy before it was kicked out of power.

    President Bio should not sack JJ Saffa. Let Saffa stay and turn the stubborn economy around.

  9. LOL “… let JJ Saffa continue to dance”? And who will continue to play the music for him to dance, Mr Editor of Global Times? No doubt he has the energy to dance after the daily square meals he eats, but what about the musicians who cannot afford even a square meal a day. How will they have the energy to play music for the Finance Minister, JJ Saffa to dance?

    Maybe am missing a point here. Alternatively, the SYCOPHANTS can provide the music (clapping) for the Finance Minister to dance.

  10. Thank you Mr. Thomas for keeping me positively alert about my country even though i am away from the country for more than a month ago. Your World Press medium is presently the most reliable press house that I certainly believe for disseminating proper information about Sierra Leone.

    Here, I mean you prove to be neutral in the style of your Journalism. I could see articles published by your press house which are said to be written by Pro ruling party supporters and pro opposition supporters in the likes of Dr. Sama Puawi Banya, Barrister/ Solicitor Joseph F. Kamara, etc. This is what to me good journalism is. It should not be focusing or targeting one person only because you hate him.

    Now, in response to Mr. Sorie Fofanah`s written document, Jacob Jusu Saffa, current Minister of Finance in the republic of Serra Leone is doing very well in performing his duties. The issue of price escalation of commodities and dollar increment is as a result of the two neighboring countries (Guinea and Liberia) whose present economic situations are very poor.

    Prices of their food commodities are extremely high, dollar exchange is also high; and because of these factors, there are serious pressures on our economy in Sierra Leone caused by inhabitants of these neighboring countries. We have seen the rapid smuggling of our fuel to Guinea by a particular set of people; foods like garri, palm oil, cash crops – like cola nut, along Kailahun border with Guinea; rice to Liberia and even Guinea.

    And to crown it all, some set of people are buying huge sums of dollar in Sierra Leone and smuggling them to Guinea. These are some of the present challenges to my knowledge that the Minister of Finance is facing and need to be addressed immediately to help reduce prices of commodities of food and non food items, as well as the dollar exchange rate.

    Of course, I am not praising the present Govt. of the republic of Sierra Leone but when comparisons are carefully done with regards prices of goods and food stuffs, taxi charges, fuel prices, specifically in Accra here in Ghana, you will realize that Sierra Leone is somehow better in terms of prices of some goods. I can`t talk about Liberia and Guinea, their own situations are worse. So let us allow the Finance Minister to do his job but we continue to put more pressure on him in order to do more. Thank you.

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