NATIVE CONSORTIUM & RESEARCH CENTER RAISES CONCERNS OVER THE TRINITY OF THE ECONOMY BEFORE THE END OF 2021
- Monetary policies – The revaluation (redenomination) of the Leone against October 2021 is untimely…
- Fiscal Macro-criticality issues like fuel and high cost of living is an economic emergency.
- Sovereign Debt Tradeoff Vs Recapitalizing Sierra Rutile for PPP. A possibility.
The Native Consortium fully supports the revaluation or redenomination of the Leone notes driven by the Central Bank but warns that the October 2021 deadline is untimely and will create an existential threat from the black economy because we believe that the Central bank has not done much towards raising the required public awareness.
Extend the redenomination timeline and target January 2022 instead of October 2021. The Central Bank has failed to adequately prepare the public and pursuing this current timeline will end in disaster. The public needs massive sensitization and we don’t see the Central Bank doing that.
Fiscal and Macro-Criticality
His Excellency President Bio should take the current huge hike in the prices of basic commodities as an economic emergency because it is taking a devastating toll on the citizens and to make a bad situation even worse, the price of fuel has been changed 6 times in 18 months. Furthermore, citizens are being cheated by wicked and unscrupulous fuel dealers at pumping stations.
In view of the above, the NCRC wishes to describe and prescribe a solution to the half measurement of petroleum products at pump stations:
(a) The Petrol Regulatory Agency (PRA) has been chasing Dealers when they themselves are part of the problem. There is a hidden jigsaw of secrets between the PRA, Standards Bureau (SB), Oil Marketing Companies (OMCs) and unscrupulous Dealers recalibrating Pump sales of petroleum products and creating an incalculable loss to consumers.
From our findings, we know now that Oil Marketers are also not calibrating the full measurement to the Dealers.
The Consortium submits the following prescription
I. The PRA should first concentrate on the recalibration or measurement from the Oil marketers to the Tankers (Bunkerage) of the dealers because the cheating starts from that point. Some Dealers now pass the cheating over to the innocent Consumers by selling them half litres through deliberately altered and recalibrated pumps.
II. The PRA criminally levies an extra charge of Le 2 million on every 20,000 litres of fuel bought by the dealers and yet they are running after unscrupulous Dealers for cheating consumers when the PRA has not been fair with the dealers and OMCs.
III. Thirdly the Standards Bureau needs to scale up because they have the supervisory mandate to monitor measurement and not the PRA. As we speak, the OMCs are importing highly contaminated fuel with 5000 ppm (sulphate dioxide content) that is killing more people than the high price of fuel. We believe the Trade Minister and the Standards Bureau are aware of this but nothing is being done.
PRA should lift the extra charges and work in collaboration with the SB to robustly monitor criminal calibration of fuel pumps from the jetty to the pump attendants in the fuel stations.
Public Debt Vs Capitalizing Sierra Rutile
Firstly we want to commend President Bio and his Government for saving Sierra Rutile. It is worth noting that Sierra Rutile happens to be the biggest private-sector employer, for over 45 years now. However, the current status quo is not sustainable therefore we urge the Government
to bail Sierra Rutile out as it happened in the days of former President Kabba (late). The Bio Administration has a window to do the same without a sovereign guarantee and quickly recapitalize Sierra Rutile before the end of 2021. We need to break the current status quo with tax breaks that we believe are not sustainable.
Government should step up to bail Sierra Rutile through a Public-Private Partnership model of shared ownership. This will mobilise more revenue, create 4,500 jobs, increase the GDP growth rate, while Government still maintains the Landlord status.
The Native Consortium strongly believes Sierra Rutile still has the largest deposits of Rutile in the world and can still be a cash cow. The NCRC believes this should be seriously considered as a way of moving the economy forward.
Secondly, the Consortium strongly believes that our Government machinery at the moment is too slow for investors. The Bio administration needs to scale up its game. Past and current Governments have not been savvy around job creation and fighting poverty but have been preoccupied with lofty political rhetoric.
As we speak, the Guinean government under the deposed Alpha Conde, attracted 16 Mining companies through Foreign Direct Investment (FDI) in the last 5 years, while we have created only 1 in the last 10 years. We are not sure the Bio Administration is aware of these things and even if they are, they have no idea why failing to do so as a country is affecting our economy.
What do we do.?
We, therefore, propose a quick national dialogue or consultative conference for a national economic agenda that should be inclusive of the Government, the Private sector, CSOs, the Diplomatic Community et al on the way forward on making job creation and poverty alleviation central to our national development aspirations.
Edmond Abu Jr
+232-76617240/+1 (609) 540-5757
Native Consortium & Research Center (NCRC) issues three (3) strong positions on the Trinity of the economy
- The NCRC supports the redenomination of the Leone but the Central bank should do massive public awareness. Therefore the October 2021 deadline is not feasible to rollout this bold ambition.
- Fiscal space: The President Bio Administration should declare an economic emergency on the high cost of living that has taken a devastating toll on citizen.
- The cheating and calibration of fuel pumps to shortchange consumers, created by the Oil marketers and the Dealers, plus the extra cost charge by the PRA should be addressed
- Public Debt: Recapitalizing Sierra Rutile with a Public Private Partnership Model with less debt burden or concessional loan can save 4000 jobs and transform Sierra Rutile into a semi state owned cash cow for Government. This is a big possibility.