All is not well for Sierra Leone, a country that has settled for austerity if the economic crunch continues unabated. Sierra Leone has been isolated by the international community by holding back its funds from government owing to dissatisfaction with the outcome of the election results.
Her traditional donors: the United States, United Kingdom and European Union have cut off cooperation with Sierra Leone Government three months ago owing to the rigged June-24 election.
The International Monetary Fund and World Bank too have stopped funding Sierra Leone by withholding grants and loans while other countries benefit from the scheme.
Recent reports have shown that the two inter-governmental financial institutions have waived debts for other countries in Africa while Sierra Leone is left out. Withholding donor support makes it difficult for government even to pay salaries and wages to employees in several public institutions.
Investigation recently conducted by this press has shown that most government workers work from home, and they appear in offices only if there is a sensitive and urgent issue to attend to.
The work-from-home syndrome is glaring just with an ordinary squint at Youyi Building, Sierra Leone’s main ministerial edifice which currently bears the looks of a ghost town. The building which hosts about 10 ministries is known for its hustling and bustling during normal times when everything is well and good.
But, such is now a faded glory as several workers having less to do hardly surfaces in their offices to save their fares.
No new, sensitive project to roll out for now except the backlogues and no new policy to implement except in the health sector which seems to be the only ministry getting international support in the short run. Former US Ambassador to Sierra Leone, David Reimer made it clear during a media interview that his country, the United States would support only the health projects saying they touch life.
Other projects are currently left out in the American support especially budget support, governance, human rights and rule of law issues. The negative impact of the funding cut is also felt by the public with ripple effects on the economy.
Sierra Leone is currently fraught with low consumer spending owing to low income circulation, high capital flight, balance of payment deficits, weak terms of trade and a sky-rocketing inflation.
Recurrent consumer price indices compiled by the national statistics agency are spelling doom and gloom every year for Sierra Leone tagging inflation rate at over 40 per cent. The inflationary trend grows worse every year showing no sign of receding.
Professor John Hopkins inflation dashboard also holds horrific projections for the country’s inflationary trend placing it at about 43% quite lately. World Bank Economic Outlook for Sierra Leone also indicates that food inflation has hit 63%, a record figure for Sierra Leone since independence.
The food inflation comes out at a time President Julius Maada Bio is launching the ‘Feed Salone,’ an initiative which government will use to strengthen agriculture in Sierra Leone, but its success is something to deeply think about as the structures for agricultural productivity are yet to be laid.
One cannot fatten a pig on the market day as agriculture has been neglected for years in Sierra Leone in preference to the mining sector which has shown to be the most volatile.
The rapid fall of Iron Ore price at the World Market and the departure of investors from the mining sector following the outbreak of Ebola in May, 2014 shows how unreliable the sector has proved to be.
A slight exodus of investors in the mining sector also became apparent when Corona Virus struck Sierra Leone in March, 2020. A number of investors also pulled out reversing several gains made in the mining sector. Faced with a seemingly uncontrollable financial constraints, government is going an extra-mile to mobilise resources for a cash-trapped country.
The mining and transport sectors have lately attracted government’s attention hoping to get the required resources with foreign companies on the profit side than Sierra Leone.
Currently, Sierra Leone Government and the Chinese Company, Leone Rock aka Kingho went into a 20-year agreement for the management and operation of the Ferengbeya-Pepel rail and port in the Tonokolili and PortLoko districts in the Northern region. The amount of money that will go into government coffers is not known although it hopes to make more money out of the deal.
Wonders about what led government to lease the rail and port to Leone Rock still linger. But, observers in the media hold that the agreement marks a symbol of economic hysteria and paranoia on the part of government. Others view the Kingho agreement as a resistance to punitive financial measures taken by Western countries and the United States.
Since Bio is not sure of getting support from Europe and America, China became the only country to turn to as a new source of hope, and the only way to achieve such mission is to offer the country’s strategic facilities for such a long period.
Although it may be seen as a feel-good effect, it is not free from negativity as it deprives competitors from coming into the industry. Arise Integrated Industrial Platforms (Arise IIP) and Marampa Mines companies which have a material interest in and reasonable expectation of use of the port and rail facilities have been constrained.
Even if the facility is used, it would not be beneficial to the mining companies and the room for expansion is limited owing to monopoly power conferred on the Chinese company.
Such action will not free Sierra Leone Government from the risk of lawsuits as Arise IIP and MML have legal rights (locus standi) to sue government if they do not enjoy the road facilities to full capacity.
MML once sued Sierra Leone Government and won; the Iron Ore miner is also sure to win this time if government is dragged to an international court again for failing to honour its promise.
Arise IIP will surely got to court according to sources and hopes to win the case remains high as government has breached about nine portions of the agreement, a reliable source intimates this press. Information filtering through the public also shows that government would likely hand over the Lungi Bridge project to China which will be operated under a toll system although such prospect remains slim.
It is initially a US$2.1 billion investment through which government hope to make huge gains for the payment of salaries and wages to civil and public servants. It is not yet clear whether China would accept such a finically demanding venture from government in light of their potential to recoup their money in a reasonable period.
Questions about how many people travel from Lungi to Freetown and vice versa remains on the lips of many Sierra Leoneans. This press has also learned that government has increased the 5% which the past government used to have from Freetown-Masiaka toll road constructed by the Chinese few years ago.
Arguments are rife that President Bio might increase years of the agreement to over 25 should his government remain in power to that period. Bio’s government also recently pawned the Ferry-terminal to a Turkish company for 25 years with the hope of making money just to run a government at such a trying time.
The lease of the country’s only international airport to Suma Group of companies for 30 years on a toll model also show the extent to which government is ready to mortgage strategic portions of Sierra Leone to keep the country well afloat. Owing to its uncontrollable desire for money, the length at which government would go in pawning the country’s facilities is yet unknown.