Sierra Leone on the Rebound

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President Ernest Bai Koroma

President Ernest Bai Koroma

The trauma and triumph of Sierra Leone in the last couple of years can be captured in the seminal message of a world renowned philosopher: “When we meet real tragedy in life, we can react in two ways — lose hope and fall into self destructive habits, or use the challenge to find our inner strength.”

Faced with an economic crisis occasioned by the fall in global prices of commodities like many developing countries around the world, Sierra Leone had the additional misfortune of being simultaneously devastated by the deadly Ebola disease. It was a double assault that tasked the administration of President Ernest Bai Koroma. Fortunately, the country’s leader was able to galvanize his cabinet into action, aided by the international community. Within 18 months of confronting the virus, Sierra Leone was declared Ebola free by the World Health Organisation (WHO). The pronouncement marked a dramatic turnaround for the beleaguered nation. It was the signal to return the economy to status quo ante. Sierra Leone chose to “use the challenge to find its inner strength.”

With that blight behind it, eyes firmly fixed on the health sector’s massive investment in and upgrade of facilities, the country’s leadership has resumed its ambitious push for prosperity as enunciated in its home-grown development blueprint – the Agenda for Prosperity.  As a strategic move to insulate the economy against future shocks and ensure inclusive and sustainable economic growth, the Koroma administration recommitted to the diversification of the economy along key sectors.

Momodu Lamin Kargbo, Minister of Finance and Economic Development confirmed government’s resolve at the launch of the African Economic Outlook (AEO) and Country Note for Sierra Leone 2016 at the ministry’s conference hall. Said he: “All what we have discussed pertaining to the report means one thing—we need to diversify our economy.” Kargbo’s declaration followed a well laid-out framework by President Koroma who, in late 2015, enumerated a six-point action plan for the country. Coming at a time the country had defeated  Ebola  with well-coordinated response and policy package that saw many afflicted Sierra Leoneans bouncing back to life, the road map aims at promoting social cohesion, education and community mobilization, developing Sierra Leone’s private economy, investing in national infrastructure, encouraging foreign investment and driving economic diversification.

The recovery programme, government said, would focus on key sectors such as agriculture, energy, manufacturing, infrastructure upgrade and boosting revenue drive. Before now, Sierra Leone had relied heavily on its mineral resources, especially iron ore, for foreign exchange.

With the twin-trauma of iron ore price crash and Ebola’s devastating effects now evident, the administration of President Koroma has regained momentum and is making spirited efforts to put the country back on the path of development.

Like the President, Kargbo is hopeful that diversifying Sierra Leone’s economy will lead to the country regaining what it lost to the epidemic and slump in the price of mineral resources. He regrets the unprecedented deceleration in GDP growth to a record low of -21.1 percent in 2015, from a high of 20.1 percent in 2013 which caused living standards of at least 2.3 million to deteriorate substantially. This depressing state of affairs may soon change. “Our diversification efforts are directed towards agriculture, fisheries, manufacturing and tourism, to be accompanied by light manufacturing. More than 70 percent or more of the economically active population are engaged in these sectors,” Kargbo says.

Agricultural transformation

Agriculture is the linchpin of Sierra Leone’s economic diversification drive. This is anchored on President Koroma’s vision to move the country away from “subsistence to commercial agriculture, agro-processing,” that adds “value to our agricultural products and realising maximum benefit from the richness of our soil.”

Kargbo says government is working to transform the agriculture sector by encouraging large-scale mechanised farming to boost production and attract new private investments considering Sierra Leone’s expanse of arable land.  Much of the country’s output today comes from small-holder farmers who also consume an inordinately large portion of what they produce.

For the government, it makes sense to encourage agro-based industry to convert agriculture which employs 65 percent of labour force, into a wealth-multiplier through value addition. A successful transformation, the minister says, would lead to the improvement of the lives of the vast majority of Sierra Leoneans.

Professor Patrick Monty Jones, Sierra Leone’s Minister of Agriculture, Forestry and Food Security, says investment in the agricultural sector, aside ensuring increase in food production, will create jobs for the country’s youth in sync with the President Koroma’s vision. The strategic objectives are “to increase the productivity, production and processing of key commodities such as rice, cassava, cocoa; livestock and fish along the agricultural value chain as well as promote and increase private sector-driven production and value addition activities on agricultural goods,” says Jones.

To ensure effective implementation of the agriculture sector master plan, government has identified five priority areas: land development and mechanization, research and development, agricultural extension and advisory services, access to institutional credit and innovative financing of agricultural infrastructure.

In keeping faith with the agricultural sector’s power to fast-track Sierra Leone’s long term goals, the government draws inspiration from the success of such countries as China, Malaysia and Thailand, that recognised and exploited the potential of agriculture decades ago.

Boosting power supply

Determined to boost its manufacturing sector, Sierra Leone recognises the need to improve electricity supply. Power projects are ongoing in different towns and districts including thermal plants for Bo and Kenema cities (4.8MW); Lunsar town (1MW); Lungi township (6MW); Makeni city (2.3MW); Bumbuna township (2MW) and Koidu city, 2MW thermal plant plus distribution lines.

The country is also harnessing its potential in renewable energy with the ongoing installation of a 6 MW Solar Park in the Newton-John community and environs in Western Rural Area. This is already yielding dividends. Current installed capacity for power generation has hit 100MW, a significant step in ensuring steady power supply in the country.

Industrializing Sierra Leone

Industrialization is also a top priority of the government. To achieve its goal of moving Sierra Leone into manufacturing, government has created the necessary environment for investment through the enactment of investor-friendly policies. According to Kargbo, “these incentives cover all sectors of the economy and are wide ranging.” They include tax holidays, duty and tax waivers, lower duty rates on capital equipment and raw materials as well as accelerated depreciation of capital. Apart from these, the government is putting in place mechanisms for quickening the business registration process for a more business-friendly climate.

Infrastructure upgrade

One of the clearest indicators of the quality of life in any nation is the state of infrastructure. President Koroma’s administration recognises this, which explains the huge investment in new roads, rails and airport facilities.

Some of the roads constructed in recent years include Freetown Hillside Bypass Road, Hill Cot Road in Freetown, Spur Road, Regent-Grafton Road and Wilkinson Road in Freetown. Rehabilitation work is also ongoing or concluded in provincial headquarter towns, including Bo, Kenema, Makeni, Magburaka, Pujehun, Kailahun and Moyamba. There’s also the donor-assisted feeder road programmes linking rural areas to urban centres. The benefactors include the European Union, the World Bank, African Development Bank, the German kfW, the Islamic Development Bank and the International Fund for Agricultural Development. Besides these international agencies, the government’s infrastructural agenda is realised through collaboration with countries such as China, which is handling the Mamamah International Airport and a medical and public health infrastructure.

Tourism

Another sector which would benefit from improved infrastructural development is tourism. Ever on the look-out for class, tourists crave value for money and that’s what awaits them in Sierra Leone, a country blessed with numerous attractions. Total tourist arrivals decreased from 43,731 in 2014 to 23,803 in 2015 — a 46 percent decrease. Growth in the tourism and trade sub-sectors declined by 6.7 percent compared to a reduction of 4.6 percent in 2014. Government officials have, in recent times, been participating in exhibitions and fairs in countries like Germany, Morocco, U.K to rekindle interest in Sierra Leone’s natural beauty, especially its unsullied breaches along its long coastline. At home, institutional and legislative frameworks for tourism have been strengthened via the approval by cabinet of the National Tourism Policy and the validation and approval of the Eco-Tourism Policy.

Budget Planning

As part of efforts to strengthen its budgeting system, the Koroma administration started, in 2014, two training workshops; first at the policy level for Ministers and Members of Parliament and second, for all 19 Local Councils and Civil Society Organisations. This led to the harmonization of budget planning processes between Ministries, Departments and Agencies (MDAs). To improve on budget reporting, a consultant was hired to bring the reporting to international standard.

Further to this is the development of a public investment guideline for relevant staff. A connection between the Public Investment Project Cycles with regards to budget and Medium-Term Expenditure Framework (MTEF) was developed by the Public Investment Management Unit. The Project Preparation Fund that supports MDAs in developing pre-feasibility projects is being managed by the Public Investment Management (PIM).

With the support of the World Bank, the Sierra Leonean government has embraced the Integrated Financial Management Information System (IFMIS).

Tax administration is also being strengthened. There has been an increase of five percent for Pay-as-You-Earn from 30 to 35 percent. Furthermore, tax and duty exemptions on contracts awarded by MDAs have been streamlined while MDAs are now required to make provisions for import duty in their budgets for all contracts subject to the payment of taxes and duties. Other areas in which reforms were initiated include accounting, reporting and cash management, policy and revenue administration, debt relief management, public procurement system, human resources management and financial management in local councils.

Treasury Single Account

To ensure better control and management of government revenue, the Koroma administration has commenced the implementation of the Treasury Single Account (TSA). This model of managing government’s receipts and payments complements the President’s zero-tolerance for corruption as it will consolidate all cash resources of government as well as MDAs under one unified management and control. That way, government is better able to monitor cash inflow into its coffers and deploy same effectively. As part of measures to fast track the implementation of the TSA, a survey of all bank accounts operated by MDAs was carried out leading to the closure of all dormant accounts. To achieve this, the Government of Sierra Leone sought the assistance of Crown Agents for technical assistance through the Commonwealth Secretariat. And in line with its agenda, both internal and external audit mechanisms were strengthened as were oversight functions.

Anti-corruption drive

Keen to keep a robust relationship with international agencies, institutions and development partners, Sierra Leone is committed to conforming with global best practices in its affairs. The government has strengthened its anti-corruption drive while reforming the revenue collection system through a sector-wide approach in the coordination of the implementation by MDAs. Also, key instruments such as integrity pacts were instituted just as integrity management committees were established in MDAs to enable them address first hand issues of corruption and maladministration.

This drive is already yielding results. Statistics show that in the past few years, significant achievement has been recorded in the fight against corruption. Assets amounting to Le 63,967,000 were recovered from treasury looters and venal officials in 2015. The success of the anti-corruption war has led to increased public confidence in the work of the anti- corruption commission. Sierra Leone’s current standing in Transparency International Corruption Perception Index improved from the 158th position in 2008, to 119 last year.

Lately, President Koroma reintroduced the ‘performance contracts’ he ‘signed’ early in his first tenure with public officials, especially cabinet ministers. The contracts tie ministers to specific, quantifiable goals, which they must achieve on the pain of outright dismissal from office.

Leveraging on economic diplomacy

For a country that prides itself as investor-friendly, Sierra Leone takes seriously its partnership with foreign agencies and companies. Dr Samura Kamara, Minister of Foreign Affairs and International Cooperation says his country aims to leverage on the partnership to transform not just into a middle-income country by 2030 but a developed one  by the end of the 21st Century. Describing the relationships as work in progress, the minister says Sierra Leone is maintaining socio-economic and political development drive through engagement at the multilateral and bilateral levels, including building partnerships with several countries, the Mano River Union, the Economic Community of West African States (ECOWAS), the African Union (AU), the United Nations (UN), the Commonwealth, the Organisation of Islamic Cooperation and the Non-Aligned Movement.

Commendations

President Koroma’s administration is working hard to put Sierra Leone on the path of economic growth it attained before the Ebola pandemic and it is no surprise that the country has received numerous commendations and support from international agencies including the International Monetary Fund (IMF) and World Bank. The country continues to make progress in the implementation of the Extended Credit Facility Programme supported by the IMF.  In March this year, technical discussion on the fifth review of the programme was held in Freetown and this continued in Washington DC on the sidelines of IMF and World Bank Spring meetings. It says something about the confidence and willingness of international bodies to assist Sierra Leone realise its goals and reposition the country as an emerging African market.

By Amaka Enyi

 

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