President Dr. Ernest Bai Koroma welcomed Sierra Leonean home comers from the Diaspora at the State House on December 29, 2011. The occasion was described by his Minister for Political and Public Affairs, The Honorable Alpha Kanu, as an “every year get-together family reunion” hosted by the President to entertain his fellow Sierra Leoneans and to give an account of his stewardship to the nation; and the centerpiece of that stewardship is the President’s gradual progress from the “Agenda for Change towards the Agenda for Prosperity.”
Mr. Kanu described the President’s function for the evening as similar to reading his own report card, just as a head teacher would do for his students, about the work he has done for the country during four years of his administration. The difference however, according to Mr. Kanu, is that this time the highlights in the President’s report card are not farfetched, imaginary or promissory; they are visible, tangible and quantifiable. They can be seen and felt everywhere. There can be no better audience to hear the President’s report card first hand than his “Fifth Region,” Sierra Leoneans from the Diaspora.
Since he came to power in 2007, President Koroma took positive steps to engage Sierra Leoneans from the Diaspora and to encourage them to invest in their country and participate in all aspects of his development agenda because, according to Mr. Kallay Musa Conteh, the present Coordinator for the Office of Diaspora Affairs, “the President is passionate about Sierra Leoneans in the Diaspora …he considers them as the Fifth Region additional to the four regions we have in Sierra Leone- North, South, East and the Western Area.”
Mr. Conteh used the analogy of the internet to describe the Fifth Region as the cyberspace that is an integral part of the President’s “all hands on deck” approach to development. In other words, Sierra Leoneans all over the world can now participate in the governance and development of their country through the opportunities offered by the information super highway; satellite communications, the web and any other means available to them to invest in their country and to support the development efforts of President Koroma’s administration.
President Koroma commenced the reading of his report card by stating that his Government is transforming the Office of Diaspora Affairs into the Agency for Diaspora Affairs which well defined structures to optimize Diaspora contributions to the development of the country. Through the Government’s capacity building program, experts are being recruited and deployed in several key sectors, among them worthy and qualified Sierra Leoneans. Members of the Diaspora have also been investing in key sectors of the economy, seizing the opportunities present in Sierra Leone that the President said “is now internationally acclaimed as one of the best ten reformers in the world.” Highlights of recent Diaspora investment efforts in Sierra Leone include a $40 million investment to construct a five star hotel at Cape Sierra. This investment package was put together by members of the Diaspora working in partnership with the Hilton Group.
There is also a big poultry business, the Sierra AKA and VAJA, owned and managed by Diaspora Sierra Leoneans. The President spoke about an SBTS company pioneering Information and Communications Technology (ICT) products in the country. He mentioned and applauded the efforts of Maya Kaikai who established the Luawa Resort in Kailahun, Eastern Province of Sierra Leone. Kailahun is the district that produces the bulk of the country’s cash crops such as coffee and cocoa, but production fell to low ebb during the war years and deplorable road conditions continue to plague the farmers who bring their products to the open markets for high returns on their investment.
The President cited many other worthy Diaspora Sierra Leonean efforts to develop the private sector, including Olu Beckley’s fruit juice factory, Adama Kargbo’s Ashobi Designs, Madam Madina Rahman whose organization introduced the School Feeding Program in Sierra Leone. Madam Madina Rahman spoke at the meeting and described her organization as a 501 (C) (3) nonprofit charitable organization registered under the laws of the United States. She said her organization fed 400 students at the Siaka Stevens Stadium on the occasion of Sierra Leone’s 50th Independent Anniversary in April 2011. The short term goal of Madam Rahman’s School Feeding Program is to feed lunch to four elementary schools from each region of the country by the year 2015, and eventually to be able to provide one meal a day to all elementary schools in the country, an opportunity that was lost to schools since the end of the colonial era.
Another laudable Diaspora Sierra Leonean effort mentioned by the President is the Arc of Hope group of Dr. Sandy and others building a $3 million Children’s Hospital on a 10 acre plot of land provided by the Government. Similarly, Dr. Sylvester Nicol has established a hospital at Cole Farm where a battery of Diaspora medical practitioners partnered with their home-based colleagues is providing first class medical services to the country. The President said “the list of worthy Diaspora Sierra Leonean efforts is long and endless…, and many more are digging in and sending strong message to everyone that this is our country and we are here to make it great.”
On his Government’s efforts towards development of the private sector, the President said his administration has created an environment that encourages business development by Diaspora communities:
“Our country is one of the ten best reformers of the world. Our economy is projected to grow by 51% in 2012, one of the highest in the world. We are building roads everywhere in the country to make sure it is easier for our people to own and operate businesses right across the nation. We have developed a ‘Local Content Policy’ to make sure that international firms operating in Sierra Leone partner with our people…”
The President went at length to catalogue a number of initiatives underpinning the overall growth in the economy during four years of his administration. But first, it is necessary to evaluate the efficacy of the President’s statement with reference to reform and economic growth indicators cited above. This is important not only in the interest of objectivity, but also to put into context the President’s progression from his ‘Agenda for Change’ to the ‘Agenda for Prosperity.
So, is Sierra Leone one of the ten best reformers of the world in 2012?
“Investment Climate,” a publication of the World Bank that provides advisory services to the World Bank Group in Africa, had this to say about Sierra Leone’s reform agenda under the leadership of President Koroma:
“While obstacles remain to doing business in Sierra Leone, the country has recorded major improvements in recent years, thanks to the collaboration and support from many stakeholders including the World Bank Group’s Removing Barriers to Investment Program. Results have been significant. Sierra Leone has been steadily making progress and has ranked second behind Burkina Faso, among the Economic Community of West African States in number of improvements recorded by the World Bank/International Finance Corporation (IFC) ‘Doing Business Report – a remarkable turnaround only seven years after a civil war had all but destroyed the country.”
With regards to the ease of doing business in country, Sierra Leone was ranked 141st out of 183 countries in 2012, compared to 150th out of 183 countries in 2011. This in itself is a significant yearly improvement indicating progressive liberalization of the business environment. Based on this writers analysis of statistics provided in the “Doing Business Report 2012”, Sierra Leone takes 8th position overall, out of 12 countries worldwide that made 4 or more reforms targeted at making it easier to do business within their borders. As a matter of fact, the only country that made 5 reforms among the 12 countries is Armenia, but all others made 4 or fewer reforms, including Russia, Senegal, Ukraine and Georgia. Technically speaking, the President’s statement that Sierra Leone is one of the ten best reformers of the world in 2012 is accurate, as no other country in the world made more reforms in the area of making it easier to do business except Armenia. However, it is important to note that Sierra Leone did not make notable reforms in other key categories including Paying Taxes, Getting Electricity, Registering Property and Protecting Investors.
Nevertheless, Sierra Leone made 4 reforms in these key categories; Getting Credit, Trading Across Borders, Enforcing Contracts and Resolving Insolvency. The Report notes that Sierra Leone improved its credit information system by enacting a new law providing for the creation of a public credit registry. What is a Public Credit Registry (PCR)? According to the World Bank’s Policy Research Working Paper No 5489 (December 2010),
“PCRs are databases with detailed information of the credits granted by financial intermediaries created to support bank regulation and supervision. On occasions, they also participate actively in the credit information market by providing data to creditors (namely banks) and credit bureaus…” that is used to assess the credit worthiness of borrowers, including individuals and institutions. This is certainly a new development in Sierra Leone’s financial market. It means that credit bureaus will now exist to collect and report data on borrowers and their creditors, and this will determine the ability of borrowers to obtain credit at fair market interest rates depending on their credit histories. The availability of credit is critical to the ease of doing business in a country and the existence of a credit reporting and assessment methodology certainly enhances the fluidity of the financial market.
But critics question whether Sierra Leone is ready to embrace a PCR reform. Since PCR depends largely on the extent, accuracy and availability of the data collected by the authorities, how effective would implementation of this monitoring system be in a country where record keeping and data management systems remain moribund? Moreover, what does PCR mean for the average Sierra Leonean? How long would it take for a high school teacher to work into a dealership and take out a car on loan without collateral, based only on a good and verifiable credit history? Critics also believe a PCR system works best in a country with a vibrant middle class that has a strong earning and purchasing power. This requires the need to beef up the country’s educational system and to revamp the wage structure to bring it in line with comparable economies with workable PCR systems. As a result, some question this reform as premature, putting the cart before the horse, so to speak.
Listening to the President while he addressed Sierra Leoneans on December 29 last year, it appeared to me that his “Agenda for Prosperity” cannot wait. He told his countrymen and women that “We applaud all of your burning desires to see a transformed Sierra Leone; but desiring and intending is not enough, we must move to the realm of action. We must all be action oriented in the land that we love…” The President’s statement seems to underscore the fact that Sierra Leoneans must wake up from slumber and embrace reform; prod along and adapt to the new economic dispensation. In other words, let there be reform and all Sierra Leoneans must follow in its wake, making the necessary adjustments from time to time to make it work.
Another area of reform is Trading Across Borders. In this category, the “Doing Business Report” states that Sierra Leone made trading across borders faster by implementing the Automated Systems for Customs Data (ASYCUDA). What is ASYCUDA? ASYCUDA is a computerized system designed by the United Nations Conference on Trade and Development (UNCTAD) to administer a country’s customs. In 1981, UNCTAD received a request from ECOWAS to assist in the compilation of trade statistics in their member states with regards to customs clearance modernization and procedures. Even though the project has been long delayed due to a myriad of computer technology problems in member states, it is now on record that Sierra Leone implemented this all important tool under the leadership of President Koroma. Here is how UNCTAD describes the functionality of its program:
“ASYCUDA is a computerized customs management system which covers most foreign trade procedures. The system handles manifests and customs declarations, accounting procedures, transit and suspense procedures…it generates trade data that can be used for statistical economic analysis and … takes into account the international codes and standards developed by ISO (International Organization for Standardization), WCO (World Customs Organization) and the United Nations…ASYCUDA can be configured to suit the national characteristics of individual Customs regimes, National Tariff, legislation,…It provides for Electronic Data Interchange (EDI) between traders and Customs using EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) rules.” See Asycuda.org.
Theoretically, the implementation of ASYCUDA in Sierra Leone is supposed to minimize corruption in the collection of customs duties, improve revenue collection and enhance the operations of the National Revenue Authority (NRA). In practice however, the effectiveness of ASYCUDA remains to be seen in our customs collection system given the fact that this sector is still viewed by many as the bane in our revenue collection efforts due to unfettered corruption and mismanagement.
In the Enforcing Contracts category, the Report notes that Sierra Leone made enforcing contracts easier by launching a fast-track commercial court. Some may ask why a fast track commercial court is a necessary indicator of a good business climate. The Investment Climate Facility (ICF) for Africa, recognizing Mauritius’ giant strides towards improving its commercial justice system, stated that “When disputes occur in the commercial world, investors need assurances that disagreements will be resolved quickly, efficiently and transparently.” See www.icfafrica.org.
Moreover, commercial disputes do not necessarily have to be resolved through the rigors of the civil court litigation system. A commercial court such as the one established by Sierra Leone would have an Alternative Dispute Resolution (ADR) system as a mechanism to resolve commercial disputes. This could take the form of informal negotiations or mediation outside the formal court system. A commercial court can also function as an Arbitration Court interpreting specialized arbitration laws adopted either by the parties in their arbitration agreement, or by the “Situs” of the Arbitration Court.
The Fast Track Commercial and Admiralty Court, located at Government Wharf in Freetown, was commissioned on December 9, 2010 by President Ernest Bai Koroma. Observers say it is the only automated court system in Sierra Leone so far, equipped with digital technology and other high tech devices to ease the process of case management and document production and processing. This is clearly another effort by the Koroma administration to ensure the existence of a conducive atmosphere for doing business in the country. The project is a joint partnership between the ICF and the Government of Sierra Leone. It is hoped that efforts will be made in the not too distant future to improve the dispensation of justice across the entire judiciary, which is still plagued by case management problems and document production nightmare due to outdated technology.
The last category, resolving insolvency, is also a function of the Fast Tract Commercial Court. It is supposed to function as a bankruptcy court to conduct insolvency proceedings involving domestic entities to reduce time and cost and to facilitate speedy business closings. Of course, the Doing Business Report makes several assumptions regarding businesses that may be subject to this inquiry, including type and scope of the business, dollar value of the business, the number of employees, etc.
The data clearly suggests that all things being equal, Sierra Leone’s economy as projected will grow in geometric progression in 2012. It is important to note that this is a mere projection, not a statement of fact as it exists on the ground today. However, it is important also to consider some of the factors underpinning the projected economic growth for Sierra Leone under the leadership of President Koroma. At the conclusion of the most recent IMF Mission to Sierra Leone from March 28 to April 11, 2012, IMF Mission Chief for Sierra Leone, Malangu Kabedi-Mbuyi, issued the following statement:The President also said that Sierra Leone’s economy is projected to grow at 51% in 2012. This is, of course, a very loaded statement for obvious reasons. In fact, quite a few murmurs and giggles were heard in the crowd when the President made this statement. Even his Political and Public Affairs Minister, Honorable Alpha Kanu, said openly that he could not believe when the Finance Minister told him the good news and he had to request to see the figures to make sure. So, is 51% GDP annual growth rate for Sierra Leone in 2012 realistic? Given the fact that economic growth for Sierra Leone in 2011 was 5.1 %, how could it be possible for the GDP growth rate to jump almost tenfold within twelve months? Based on the following data posted by credible financial sources such as the IMF, the projection is accurate. In the interest of objectivity and to satisfy the curiosity of critics and observers alike, AAM reproduces the data below culled from the IMF website.
“Sierra Leone’s economy continued to expand in 2011 on the back of agriculture, construction, and services, supported by increased energy supply and infrastructure investments. Real gross domestic product (GDP) growth in 2011 is estimated at 6 percent. Price pressures have receded somewhat since mid-2011 and consumer price inflation eased to 16.9 percent (year-on-year) at end-2011, as food price increases subsided and tight monetary policy helped contain non-food inflation. Gross international reserves remain at a comfortable level; and the Leone has been relatively stable, depreciating by 4 percent (against the dollar) over the course of the year…” [Statement at the Conclusion of an IMF Mission to Sierra Leone Press Release No. 12/128 April 11, 2012]
President Koroma himself did not hesitate to drum up the good news about the economy as seen through the eyes of foreign observers. He told Sierra Leoneans from the Diaspora that “…the opportunities are growing. Prospects for Sierra Leone to become an oil producing nation are bright. We are set to become the biggest per capita exporter of iron ore in the world. Sierra Leoneans must seize these opportunities. We know there are still challenges but it is very unwise for all the challenges to be removed before we act. My Government acts in the midst of enormous challenges and that is why we have been able to implement the visible changes you see in the country…”
Observers question how would the positive economic forecast translate into improved living conditions for the ordinary people of Sierra Leone? The President spoke about his free healthcare initiative which he said is saving thousands of lives of ordinary Sierra Leoneans. He also mentioned his road construction projects, including the Wilkinson Road and other roads in the major towns in the provinces. “We have landed the fiber optic cable and we are on the way to establishing a world class broadband internet infrastructure in this country…” the President told his countrymen.
Nevertheless, as the President himself recognized, there are enormous challenges in the way of Sierra Leone’s economic and social development. Many progressive Sierra Leoneans would also agree with the President that we must not wait for all the challenges to be removed before we take control of our own economic development. Development is a process, but the process must continue with alacrity and it should not be interrupted.
Africa Economic Outlook, recognizing the existence of challenges amidst Sierra Leone’s glowing economic forecast, noted as follows:
“The medium-term outlook for the Sierra Leone economy is positive, but even more could be done on the structural reform side to help bring the country on a path of high growth with the job creation needed for significant improvements in people’s living standards. Growth is being driven by exports of minerals and cash crops due to the global recovery, the expansion of the service sector, increased agricultural productivity, and continued investment in infrastructure. The recent completion of the Bumbuna power station has already started to yield benefits. The government has undertaken key reforms (e.g. in the financial sector, tax reforms) that will bring benefits only later but bode well for the country’s future…but the country faces major development challenges as evidenced by its very low rank on the Human Development Index (HDI) (third from the bottom rank after Afghanistan and Niger) and staggering rates of youth unemployment…This points to the need for further growth acceleration if the country is to overcome its economic fragility and reduce the income gap with more advanced economies…”
So, AAM is delighted to lay out President Koroma’s report card for all to see. What grade does the President deserve for four years of hard work on the economic front? For all practical purposes, the President scored an A- in the opinion of AAM publication. This judgment is based on available data from very credible sources as cited in this article, the limited time the President has been in office and the courageous steps taken to address deep-seated economic problems that had lingered for so long. We also make this assessment against the background that the growth forecast is only a projection, and that growth in real terms and its corresponding economic and social impact will take some time to bear fruits and become evident.
The President had these closing remarks for Sierra Leoneans from the Diaspora:
“Join the move to develop an effective Sierra Leone now by helping to develop the private sector, especially in the nontraditional areas such as Information and Communications Technology…Bring forward your ideas for a better Sierra Leone, a Sierra Leone that must become a middle level income country and an advanced economy within the next few decades. I call on you all to stay engaged, stay connected and support the positive transformation of the country.” – President Dr. Ernest Bai Koroma, President of the Republic of Sierra Leone.