And true to our grim expectations, the budget statement itself was austere with lame attempts at economic diversification, financial accountability and social protection against the hard times that are the direct consequences of its reasoning.
It is rather absurd for a Government that came to power promising Sierra Leoneans ‘change’ and ‘prosperity’ in its 2007 and 2012 manifestos conveniently titled ‘Agenda for change’ and ‘Agenda for Prosperity’ respectively; to now talk about plans to diversify an ailing economy at this stage of their tenure – 14 months to its end. This long overdue initiative is indeed coming ‘too little too late’.
It is also strange that at a time when we were expecting a budget to jumpstart a sluggish economy to provide jobs and help save businesses at a time when the earning and spending power of Sierra Leoneans is at its lowest since independence; what we have is a fiscal regime that will send inflation into double figures permanently and leave the majority of Sierra Leoneans poorer.
It is also rather depressing to note that the increments in taxes, would target necessities like bread and fuel thus worsening our already wretched state. Rather than impose new taxes and increase old taxes with direct negative effect on the poor people of this country, a strategy should have been put in place to enhance the level of cost effectiveness of revenue collection, especially with respect to existing fees and levies. Also, a genuine attempt at cutting down on Government’s growing expenses as a result of graft and excessive spending on an ever growing wage bill among others, would help in providing the much needed funds to address our post-Ebola challenges.
Government should have given priority to expanding the country’s taxable base through accelerated gainful employment generation by private investors who should have been given the necessary incentive to invest and expand.
The budget statement which was termed “Recovery through economic diversification and fostering entrepreneurship” at a time of economic recession should have concentrated on an immediate plan at resuscitating the economy and in that regard should have been better labelled a “budget of total rescue and sustainability” for the 2017 fiscal year.
When one looks at the 2017 Budget Statement to Parliament against the backdrop of the Auditor General’s report for 2015, which repeats the constant complaint of substantial leakages due to lack of adherence to procurement rules and outright corrupt practices in all its annual reports since 2008; then one is inclined to write off the ‘financial accountability’ aspect of this Budget Statement as a mere lip service to sweeten the ears of our development partners.
It is also noteworthy that our beloved Sierra Leone under the current Government’s watch is the only nation among the three countries that were heavily affected by Ebola, whose GDP growth-rate hit a negative figure of -21.5%, with Liberia at 0.3% and Guinea at 0.1% indicating that the economies of those neighboring countries are far more healthier than ours before and after Ebola.
Sierra Leone’s weak economic outlook is the direct result of government’s skewed emphasis over the last nine years, on mining over agriculture, tourism and fishing; aid over trade; misplaced growth over development and the absence of a genuine and honest drive to curb corrupt practices.
Under the current APC led government little or nothing was achieved in expanding trade and the nation for the better part depended cap-in-hand on aid. Also the agricultural sector which in the past was a major contributor to GDP in a diversified post – independence economy, today, continues to lag behind with added pressure on our meagre foreign exchange reserves. Government has been over dependent on mining especially iron ore and its contribution to GDP (Iron Ore alone accounted for 7% in 2013), hence the devastating effect of the fall in iron ore prices and the Ebola outbreak on our economic stability.
To cushion the effects of dwindling revenue from the mining sector therefore, government announced a number of austerity measures which are now encapsulated in the 2017 budget. These measures include cut in expenditure and a rise in the taxes on some essential and luxury items aimed at minimizing the current budget deficits.
Sierra Leone, is a mono-product economy that depends almost solely on its minerals and as such whatever affect the price of that commodity equally affects the country’s planning and budget. Therefore, what government has done is an attempt to cut expenditure in order to still meet its obligation. What this means is that instead of government to negate its primary responsibility in the area of security, healthcare, education, among others for the people, it will rather forego others that do not have a direct link with the need of the people.
We are in this current economic muddle because of our continued over dependence on proceeds from the sale of our minerals in the international market and wastefulness on the part of government. Government officials spend on themselves in a manner that indicates money is not a problem especially the large entourage that accompanied the President to the UN in September 2016. It is absurd that the rulers who manage our wealth have arrogated more than 60 per cent of all revenue to their welfare (in the form of the ever-growing huge wage bill of Government) while the remainder is what the rest of us struggle to benefit from through the provision of infrastructure.
Persistent statements by Government of its intention to diversify the economy since they assumed office in 2007 were always reduced to tokenism or mere propaganda. Rather, corruption has assumed a new dimension and people are no longer afraid of the ACC (Anti-Corruption Commission) as the worse that convicts of corrupt practices get is a fine which they can easily pay from their ill-gotten wealth.
Today, we are poorer as a people and as a nation and the 2017 budget fails to acknowledge and provide short term solutions to this crisis situation.
It is an understatement to suggest that our economy is in turmoil. Our economic performance indicators are negative; the value of the Leone has fallen to an all-time low against the dollar and other international currencies; there is growing mass unemployment and under-employment; inflation is in double digits, whilst corruption is at its highest since the end of the civil war.
The country’s debt is growing fast since the debt relief of 2006 and will soon reach $2 billion. With our public debt at 40% of GDP our country now has to contend with little borrowing capacity at such high leverage.
The nation for some time now has continuously ran a negative budget balance (-52.89 USD million currently), in part because of high government expenditure (15.7% of GDP) and a high public debt (40% of GDP). Our country also has the weakest and most vulnerable economy in the world and there are several indexes (Mo-Ibrahim index, UNDP index, etc.) to endorse this fact.
We now find ourselves in the middle of a long streak of low export growth, widespread unemployment with 60% of the population living on $1.25 a day, the biggest ever year-on-year drop in the country’s GDP, by 41% from 2013 to 2015; and now austerity measures that are bound to usher us into a painful period of no job growth, stagnant wages and high cost of living.
I am sure our numerous renowned economists will agree with me that Sierra Leone is in recession. Recession that extends by the day, especially as government remains mystified about the most expedient road map to rebound the economy.
Government cannot continue to heap blame for our declining economic performance on the effects of globalization, Ebola and falling commodity prices, without doing much more to jumpstart the economy in the short term to ensure growth and provide jobs as the only way out of our ever growing poverty.
The citizens of Sierra Leone are tired of the unending excuses of Government as they always end up sacrificing their standards of living and way of life because of the ineptitude and lack of foresight of their leaders.