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Native Consortium & Research Center – Position Statement on the current State of Sierra Leone Economy

Native Consortium & Research Center
Economic Justice for the Poor is our Signature

September 2019
Position Statement on the current State of Sierra Leone Economy

Firstly, we wish to caution Money Launderers and Insider colluders that we in the Native Consortium are not moved by their numerous threats so far after the release of our recent voice note that is trending on social media, which seeks to expose the dark sides of money laundering activities.

The Native Consortium is seriously concerned about the declining state of our economy and the high standard of living, especially for the common man. We therefore wish it to be known that they are wasting their time and energies, as our commitment to economic justice is irrevocable over the last 15 years.

Our defacto position as one of the leading economic justice CSOs in West Africa can not be compromised by any bogus threat from money launderers.

We also wish to bid farewell to Dr. Iyaboh Masha, the outgone IMF Resident Representative in Sierra Leone from 2015 to 2019. We wish to express our profound thanks and appreciation to her for her services and humility to Sierra Leone, as despite occasional disagreements, she has always respected the CSO space.

It is indisputable that prices of basic commodities have continued to sky-rocket and the crunch is biting the ordinary man very hard, because the Leone has kept depreciating against foreign currencies, especially the dollar at neck-breaking speed within the last 13 months.Moreover the Trade ministry has failed to monitor price control.

As an economic justice think tank, we are of the firm conviction that the current depreciation of the Leone, which is negatively reflect on the standard of living, is artificial and does not need a textbook economic solution; but a pragmatic and radical step to reverse the trends.

H.E President Bio himself has openly acknowledged the fact that the economic crunch is hitting hard and that he never promised a quick fix solution. This show that the President is sensitive to the plights of the masses. However, being sensitive is not enough; the people’s expectations from the New Direction to address the bread and butter, and acute joblessness which previous Governments has failed to address is waning.

We are not entirely heaping the blames on the current Government, but we must all come together through a nationalistic standpoint to address these economic challenges.

Our position statement wish to submit few prescription by putting the economy into three broad compartment, but wish to prioritise the third compartment, because they are interconnected; they are, but not limited to:

(a) Public Debt: we are concerned about the 68% debt to GDP ratio inherited. Therefore, we call on the Government to strike a balance between sovereign debt and social spending,as the Free Education programs is a novelty. The Government should focus on Concessional Loans that does not reflect on our balance sheet, but loans that are self-sustained and serviced.

(b) Fiscal and Structural Reforms: We commend the Government for the fiscal consolidation reforms, by instituting the first phase of the single treasury account as prescribed by the Public Financial Management (PFM) Act 2016, which mobilization more revenue and minimise leakages. However, the high wage bill continues to create fiscal pressure on the budget.

We also want to continue to remind the Government that the economy remains undiversified. For instance, the projected revenue from the Fishing sector stands at Le 115 Billion (equivalent to $12 Million USD) in the 2019 budget. Until we begin to mobilise a minimum of $ 50 Million USD from our fishing sector. Moreover the Central Bank auction morethan $ 166 Million USD for rice importation alone,investing on Agriculture sector to food self-sufficiency will minimise the titanic demand for US Dollars for rice importation. The tourism sector, private sector and/or service sector will thriving with low interest rate and access to capital from the banks with the right environment, without this infrastructure economic diversification will remains a lofty rhetorics. In addition, government should try to add the value addition chain from Agriculture, Mining(cutting and polishing), Fishing and Tourism sector.

We want to register our disapproval against Government’s move to keep the Chinese to police and surveillance our territorial waters. We want to remind HE the President that International research group Green Peace showed that almost all the illegal poaching in West Africa was/is done by Chinese and Korean vessels in West Africa; eight (8) West African Countries are loosing $ 2 Billion Dollars from illegal fishing activities from these Chines/Korean vessels.

Therefore, we find it extremely difficult to comes to terms with the reason why the Governent continues to keep the Chines as Monitors. To us, this is completely absurd and inexcusable. As much as The President is going out to find Investors we must try to strike a balance between Foreign Direct Investment (FDI) and driving the Local businesses.

(c) Monetary – Depreciation of the Leones: We consider this component as the main economic epicentre. The Central bank should try to ‘Dedollarise’ the economy urgently. The illicit flow of capital and increase in money laundering activities, in connivance with some top banking executives as insider Colluders must be checkmated with minimum delay, by robust surveillance and monitoring measures by the Bank Governor. This and many more are among the reasons why we think the rapid depreciation of the Leones is largely artificial, and should not be blamed on the “lack of import” chorus which is almost moribund. We need to think out of the box to to use the carrot and stick approach by crack down and engagement. Moreover we want to remind the President to borrow from the former President Kabba (late) Propoor policy to ‘Recapitalise’ the Community Banks to drive SMEs and the informal sector. This will naturally compel the mainstream Banks to Lower interest rate and help small business access capital.

The Native Consortium has
Submitted some of our compelling evidences to the Bank Governor about the dark sides of the money laundering cartels and syndicates, which are threatening to wrecked our economy. Therefore, we urge the Central Bank to raise the stake on surveillance and crackdown heavily on money launderers and their networks.

What is more disheartening is the fact that some of our top banking officials (past and present) are involve in this dirty scheme played by some businesses and notorious foreigners (few Chinese, Lebanese, Indians and Nigerians) and Sierra Leonean in the illicitly trading in our forex.

We therefore wish to submit that other measures like Currency swapping with countries like China, Enforcing the Local Assets Liguidity Ratio,and implementing the Surrender Value Obligations from the forex on the proceeds on export product of mining companies. This will solve the pressure on the depreciation of the Leones and the foreign exchange volatility with a strong foreign reserve.

National Economic summit: Lastly, we want to draw the attention of the public, MDAs and the Informal sector, to the fact that we have had Consultations with the World Bank/ IMF , CSOs, Finance Minister and other drivers of the economy to host a ground-breaking economic summit in October 2019, to seek a broad base national consultation on the economy.

We will conclude with the words of Paul Kegame who had this to say towards Africa’s development, “I would rather argue. that we need to mobilise the right mindset, rather than more funding”.

Edmond Abu (Jr) 076-617240/ 099-921815/ 031-397821
Executive Director
[email protected]

September 2019

Talking Points In The Native Consortium Position Paper On The Current State Of The Economy

1. The Consortium holds the firm position that the depreciation of the Leone is artificial, caused by money Launders and insider colluders within the banks, and the consortium is not moved by their threats, because we are determined to expose the dark sides of money laundering activities.

2. We bid farewell to the outgone IMF Resident Representative from 2015 to 2019 Dr Iyaboh Masha.

3. We are absolutely dismayed by the depreciation of the Leone, which is reflecting on the declining standard of living for the ordinary man and the continuous sky rocketing of prices of basic commodities

4. The Think-Tank wishes to submit the following antidotes or recommendations to help solve the declining standard of living

(a) Public Debt: the 68% debt to GDP ratio inherited is very critical to us. Government should strike a balance between sovereign debt and social spending, and put much premium on concessional loans that do not reflect on our balance sheet going forward.

(b) Fiscal & Structural reforms:

(I) we commend the GoSL for fiscal consolidation and to leapfrog revenue mobilization but we think controlling the wage bill is crucial going forward.

(ii) Economic diversification remains to be a lofty rhetoric. GoSL should mobilize more revenue in the Fishing, Agriculture, Tourism and service sector. We are diametrically opposed to the GoSL for allowing the Chinese to Police our marine resources, especially fish. Research shows that the illegal fishing along the coast of West Africa is being carried out by Chines vessels causing a $ 2 Billion USD loss per annum. Moreover, adding value to the supply chain on our minerals is also critical to economic diversification.

(iii) As much as the Government is seeking for Foreign Direct Investment (FDI), our unwavering position is GoSL should strike a balance between FDI and driving the local Businesses secor.

(c) Monetary reforms to defend the depreciation of the Leone (Think out of the box).

(i) Engagement & Crackdown on Money Launderers and Insider Colluders (Carrot and stick approach)
Heavy crack down and surveillance on money launders and their insider colluders within the Banks, and serious engament should be parallel approach.

(ii) Dedollarise the economy on the use of the Leone’s as a legal tender.

(iii) Recapitalising the Community Banks by driving the informal sector.

(iv) Ensure we institute the Surender Value obligation to 20%.

* (v) Currency Swap*

(vi) Enforcing the 75%:25% Local Asset Liquidity Ratio (LALR)

(5) Hosting an Economic Consultative summit in October 2019:
The Consortium is holding Consultations with the World Bank/IMF and the Finance Ministry for an economic summit in the shape of a broad-based National Consultative Conference with the Drivers of the economy, the Non State Actors ,The Development Partners, and the Informal Sector to find the way forward for our economy.

THE END

Edmond Joe Abu (Jr)
Executive DIrector
+23276-617240/ 099-921815/ 031-397821
[email protected]

Native Consortium & Research Center

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