Concerned citizen: Sierra Leone Telegraph: 13 August 2019:
It is a fact that Sierra Leone’s economy is taking a nose dive. Whether it is the cost of goods, rising inflation or stagnated wages, a lot of people measure the performance of the economy against the Leone versus US Dollar exchange rate.
This is not surprising, and is understandable because it is the easiest way to appreciate the economy even though it does not tell the entire story of the living standards of people.
But why the dollar when economists will tell you there are many other factors, including export performance, level of tax burden on businesses and individuals, government revenue, consumer spending, agricultural productivity, increased service sector performance – including the education sector, pay levels and so on.
I am not an economist but there is consensus that of all these factors, export performance plays a major role in exchange rate differences. Yet the over simplification of the factors that make the economy stupid tends to put unnecessary spotlight on the Bank of Sierra Leone, and by extension makes the Bank Governor – Professor Kefala Kallon (Photo) the single individual responsible for the economy. This is as absurd as it is stupid.
This article is not to make a defence for a governor that is clearly a novice to such an intense policy environment. It does not try to exculpate him of the fact that his interventions are either late or insensitive.
I do not wish to go down the route of vilification of a revered academic who is clearly retired. But I wish to draw your attention to the fact that the reason for the state of the economy is more political or the result of political mismanagement than monetary policy effectiveness.
To start with, everyone agrees that since the mismanagement of the mining sector that saw the collapse of the major mining companies under the last regime, the economy needed some dynamism and prudent management.
The euphoria that swept the New Direction to power would have lasted long enough by reversing the mistakes of the past government. Instead, here is what is happening that is wrong:
Instead of reducing the wage bill, we are witnessing the biggest expansion of the public sector despite all the ethnicised sackings that took place in the first twelve months of the New Direction government coming to power.
Across government, employment has soared in almost every department. Take a few examples; here, at State House alone where the office of the Chief of Staff had about three dozen staff in the previous government, we now have over one hundred.
Parliament has moved from a bloated staffing of 120 administrative staff to 230 now employed.
Despite sacking over 30 people at NatCom, the Commission only recently had to purchase extra chairs and tables to accommodate the large intake of staff, sometimes in duplicating roles.
The Police and the Army will soon continue their regular recruitment while offices like the ONS, NCRA, PPRC, EPA, ACC among others have seen a 15 to 20 percent jump in their staffing levels.
The Ministry of Agriculture budget proposal include 969 new extension workers.
Every embassy position has been filled, including the household staffing that Ambassadors fly in from home.
These are not mere statistics but will have significant levels on the government’s budget.
Discussions about the government wage bill in fact masks the real killers of its budget, such as the hidden emoluments in the administrative budgets of MDAs.
In our public sector, every official from grade 7 (graduate level) upward is entitled to 45 litres of fuel. This is not budgeted for under wages and emoluments but rather as activities for the administration of the Ministries. In some MDAs, vote controllers and Ministers can get as much fuel as they like including fuel for their home generators. There is no exact figure on the cost of fuel as this is very difficult to quantify, not including the fact that most MDAs get donor support that also come with fuel.
This is clearly not an efficient way to run a government and one would expect that if a situation like this occurs in one’s personal life, major efficiency savings would have been implemented. The recent ban on ministerial international travel appears to come close to this principle, but it is as superficial as it claims.
No Minister will submit a travel request without making a good case of the importance to government business. Besides, there is no objective criteria to determine this.
We were all very excited in the early days of the New Direction when they went after the previous government in order to track down government vehicles. Their findings reveal that there are over a thousand government vehicles in active use.
But why the need for all these vehicles and new ones when the country is on the brink of bankruptcy (without donor direct budget support)? Take the EPA with over 30 vehicles where even a junior officer can have a car assigned.
No one disputes the need for transportation to facilitate government business within this four-kilometre administrative hub of the city. But one wonders if there are no better ways of running a government transport system when the cost of maintenance of these vehicles can run into hundreds of millions for a small agency.
This is no exaggeration that we are all too familiar with the manner of usage and abuse of government vehicles; vehicles that work throughout the week including Saturday and Sundays when they are not essential service sectors (medical and security), will not last long.
Vehicles that ply rough terrains to ferry building materials for government officials building their mansions will not last long.
One would expect a government complaining about a sterile economy to be sensitive to the rising cost of running the machinery of government, but what we continue to see is a complete failure.
For those of us closer to this government, when we complain about the rising cost of living or “the grun dry” albeit sotto voce, we forget that we are the same ones that cheer the long convoys of the president when he returns from his numerous foreign trips that cost nothing less than a million dollars.
I won’t go into his travel cost which are now sufficiently discussed even in our Bonthe whatsapp fora.
The point here is that, we cannot blame a bank governor we all knew was clearly out of touch with policy, and looking to augment his retirement purse. The problem is the mental imprisonment we find ourselves due to a patrimonial political party system that has become even more dangerous through a more entrenched ethnic mobilisation strategy.
The last time this was the case was the Momoh “Ekutay” APC government, when we could hardly pay teacher salaries and those employed in the public sector, but reward others for thuggery and violence against political opponents.
History likes to repeat itself. To say that we will see an end to this economic malaise is a pipe dream.
As long as we have bought into this dangerous political masochism, do not expect a pay rise if you are a teacher whose salary now battles with a bag of rice; nor expect the dollar to fall.
It will never fall when the currency of choice of the President, Vice President, Chief Minister, First Lady, Finance Minister and Financial Secretary and so on is the US dollar, do not expect the Leone to rise.
When we continue to recruit partisans (although we like to be believe that they are more qualified than the others who were there), do not expect that things will improve.
This economy is not stupid, it is our politics that has gone mad.