Political economy is the study of production and trade and their relations with law, custom and government;and with the distribution of national income and wealth.
It gives governments adequate tools to understand the issues facing the world and allows them to focus on and break down those issues into their important components.
In his contribution to the Critique of Political Economy, Marx, 1859 (547k) has noted that in the social production of their existence, men inevitably enter Into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production.
The most fundamental components of political economy are markets and property, the interactions between the forces of supply and demand.The way a state structures its trade can profoundly affect its own economic development.
The situation in Sierra Leone with regards the economy is getting complex.
The Sierra Leone Peoples Party ruling Government is fastly losing grip on managing the political economy of the country.
The New Direction when coming to power in April, 2018 was very keen in resuming the Extended Credit Facility Program (ECF) of the International Monetary Fund (IMF) which was abandoned by the Koroma Government.
The IMF conditionalities for the resumption of the ECF had subjected the government of Sierra Leone to a number of conditions including removing subsidies on fuel and also taking a number of other measures to undertake sustainable debt measures.
President Bio was very hopeful that with the return of the IMF’s ECF program things will kick-off for the better.But alas things are tough.
Even though the National Revenue Authority (NRA) continue to break new grounds in terms of local revenue mobilization, digitalization and automation of tax systems, very stubborn indicators pointing to lack of economic stability ,high exchange rate, high and unsustainable wage bill and dollarization of the economy continue to hunt the country’s economy.
Despite all of this government has been able unlike in other countries to pay salaries of public sector workers, undertake its human capital development projects of Education, health and Agriculture and also meet other competing priorities.Budgetary allocations to these sectors continue to increase in the last two years.
But many Sierra Leoneans both at home and abroad who are closely following developments within the country are worried that the New Direction is still to inject a new direction into the management of the economy.
A Very high taxation of the private sector, the lack of sound economic policies,huge wage bill,an unsustainable debt burden are continuously presenting challenges for the economy.
The increase need to meet IMF and country targets in terms of the collection of taxes has prompted the NRA to reintroduce the Customs and Excise tax of 1982.
This development has created a burden in the importation of building materials especially cement.
From the position of the NRA they are of the opinion that the ordinary importers of cement and other building materials into the country are increasing prices unnecessarily.
They have maintained that the introduction of the Customs Excise Tax was not a justification for the over Le 12,000.00 added into the basic prize of a bag of cement by importers.
The Chief Finance Officer for Dangote Cement factory that packages cement in the country and a number of other importers in the country have a different position when they met Sierra Leone Law makers last week to discuss the issue around the high increase in the price of cement.
Various importers present at the well of Parliament have blamed government for continuously increasing taxes and thereby constraining their capital expenditure.
‘’We are left with no option but also to increase the basic prize of cement to be able to meet our capital investment ’’, they maintained.
The situation in the oil and gas sector which is also a hot political potato is also the same.
The New Direction Government since coming to power some almost two years ago has got to contend with three increments in fuel pump prices.
The only three Oil Marketers in the country Total Sierra Leone,NP SL Limited and LEONCO had complained that internal economic issues such as the exchange rate, landing taxes and inadequate storage facilities within the country are challenging their efforts to bring in sufficient petroleum products into the country.
These internal issues are further compounded by developments in the international scene vis a vis the threatening wars between the US and Iran.
The ruling government which inherited huge number of problems in managing the oil and gas sector has not been able to address the plethora of issues as they relate to the absence of government in the value supply chain, few players in the sector, storage facilities and the dollar rate etc.
A government which promised a new direction has not been able to begin to address these issues.They have continue to blame the APC regime for failing to address these issues thereby leaving the market open to several shocks which have a serious impact on the people .
As all of this is happening the ability of government to negotiate and break new grounds with importers has been lacking.
It is always the case that government officials in the Trade Ministry have the acumen to be able to have the upper hand when negotiating especially in a market in which the private sector companies have the edge.
These issues were almost going to rear –up their ugly head in the first year of the government but for the experience and tact of the then Minister Peter Bayuku Conteh we saw the massaging of these issues to the advantage of government.
His tact and understanding of the business and politics dynamics within the country’s business sector had helped him in dialoguing with the various importers of essential products to the country especially when the issue around subsidies continues to come into the fore.
The Bio led government had failed to use a national approach bringing everybody on board to solve the issues around the economy.
Tejan Kabbah of blessed memory who was immediately challenged in forming a government in the midst of a devastating rebel war had opened-up the cabinet and other areas within government to include people who are not within the SLPP circles.
The Alhaji YD, the Alpha Timbo’s and many others were brought and co-opted into the SLPP due to their prominence at the time in the business and labour movements.
It yielded a very good dividend for the party and it helped a lot in terms of stabilizing the economy and other dissenting views.
The Government of President Bio together with others around him has failed to garner a national structure outside the SLPP to be able to cushion the current economic brunt.
It is no secret that the opposition main opposition has a fair share of the business community and one would not put aside the issue of sabotage.The opposition would always want the government to fail.
This is where government should always use the national aspirations card rather than victimization to address the current challenges.
The business community in Sierra Leone has accused the SLPP of using divide and rule tactics within its ranks and this for them would not work.
Understanding the politics of the economy is crucial and would help a lot in addressing the quagmire in which we are findings ourselves