Portions of an Agreement between Arise Industrial Integrated Platforms (Arise IIP) and Sierra Leone Government have been breached leaving several investors worried and jittery.
Use of the rail and port by Arise IIP which is part of the agreement has been breached as the transport facilities have been handed over to a Chinese company, Leone Rock aka Kingho. The Chinese company went into agreement with government few years back to mine the ore at Ferengbeya village in Tonkolili district.
But, the rail and port agreement was later speedily gone into after Arise IIP expressed interest. Investors who are already in the country may pull out while potential ones would not come in to plough their resources here in Sierra Leone. The investors have been following the interaction between government and the company and are now privy to several facts.
They have learned a lot from the stand off between Sierra Leone Government and Arise IIP. By the agreement, the Chinese company now has temporal ownership right of the port and rail facilities, and will be difficult for other companies to enjoy access to the facilities.
Kingho will now determine who will use the rail and at what terms and conditions. An official in the Ministry of Information made it clear that the Chinese company had been preferred to Arise IIP saying it had created more jobs and paid royalties than Arise IIP, and that the Chinese company was the highest bidder.
The company, he said, had been in Sierra Leone for years and would not take too long to create jobs compared to Arise IIP which would take years to catch up with Kingho.
However, the government official said he was impressed with what Arise IIP’s investment in Benin, and if those achievements are replicated here, Sierra Leone will rise. “That is why the Koya land had been given to them to see what they can do,” he said.
When asked about the rail and port, the government official did not hesitate to say that the facilities had been handed over to Leone Rock and nothing else, but he is highly hopeful that other companies including Arise IIP would get access to the rail and port.
The official even informed Sierra Leoneans that he was part of the media tour to Benin where Arise IIP had invested, created jobs and transformed lives. Six months ago, President Julius Maada Bio launched Arise IIP in Koya community in PortLoko district in a colourful occasion witnessed by local stakeholders and authorities including Paramount Chief, Bai Kompa Bomboli.
Impressed by what he saw, then Resident Minister, Alpha Kanu requested the stakeholders to go down on their Knees and apologise to President Bio for disappointing him for too long by not voting him in the past election.
The former Resident Minister made the request owing to tangible preparation he saw on the site during the launching. Almost two weeks ago, a battery of dignitaries and media practitioners visited the site and saw firsthand progress made so far. Hundreds of able-bodied men and women are active on the field as an endless perimetre fence is being constructed alongside other facilities.
Again, the paramount chief did not hold any reservation for the company as he commended its officials for providing jobs to his people. Government’s latest action stuns and shocks Arise, a company that has shown keen interest in transforming Sierra Leone by adding value to her Mineral and agricultural produce before exporting them.
The investment is sure to create jobs as shown by the expansion of the value chain in the production and manufacture of goods.
Owing to the economic crunch and joblessness, Sierra Leone is in dire need of credible investors to contribute to national development, but government action is sure to drive them away owing to deception.
Sierra Leone started seeing capital flight in the early days of 2018 after President Julius Maada Bio became President of Sierra Leone. The cash stashing was caused by bad governance and business climate evidenced by harsh taxes and weak exchange rate, political tension, human rights abuses and weak economy defined by uncontrollable inflation, weak terms of trade and balance of payment deficits among others.
The above-mentioned factors undoubtedly called for investors that will lift the country out of the economic quagmire into which Sierra Leone has been trapped for years.
Business, according to economists, is stalled in a country where there is no good governance so be it for Sierra Leone. For many Sierra Leoneans, Bio started with the wrong footing immediately he was sworn in early April, 2018.
Nobody was safe in the first month of Bio’s rule as government officials were targetted, chased and killed thus creating an atmosphere of terror and oppression.
In such situation, businesses were shut down and many investors had cause to pull out with their money. The arrest of a Lebanese businessman with hundreds of thousands of US dollars at the Lungi International Airport substantiate claims of capital flight from Sierra Leone.
Other businessmen closed down operations, and sought havens. Even when the business situation became miserable, government’s crackdown on opposition politicians never stopped thus heightening political tension in the country.
Members of the main opposition, All People’s Congress (APC) who bore the brunt of SLPP’s brutality no longer saw the ruling party officials as friends or fellow Sierra Leoneans but big time foes.
The situation became worse as most of the businesses were owned by businessmen linked to the opposition. To heal an ailing economy, government initially increased taxes to expand the revenue base so that government would meet its obligations of providing for the people of Sierra Leone.
But, a big hurdle lies along the way as the business community no longer had trust in government as they put up several protests.
Businessmen, in July, 2021, staged a stay-at-home as no shop or business centre opened in Sierra Leone almost for a week, and the traders returned after a protracted negotiation with government.
However, life is never the same even after the traders returned to their shops as signs of bad governance and brutality still crystalises.
Sierra Leone still continues to see police and military presence on the streets owing to fear that the political tension may result into a bloody conflict. Matters were made worse after National Revenue Authority, the country’s tax collection agency, attempted to install electronic machines to record all business transactions so that no one evades what is popularly known as Goods and Services Tax (GST).
Again, the business community locked down their shops as a sign of resistance to government’s action, but they later returned after they were prevailed on.
However, another protest could not be ruled out in the near future as the bad business climate still persists. The GST is a composite tax that was introduced in Sierra Leone by former President Ernest Bai Koroma in early 2008 for the development of Sierra Leone.
In Koroma’s days, GST was complied with as the country enjoyed good governance owing to the high degree of tolerance with opposition politicians. Sierra Leone went into the doldrums of crude rule the day former President Koroma left the stage of state governance. In a bad business situation, only credible investors will change the narrative, but such effort is being frustrated.
Government’s overnight cancellation of Arise IIP agreement is a red flag for existing and would-be investors.