By KABS KANU :
Since the Sierra Leone Government announced early this month that the country has slipped into an economic slowdown, critics of the government have jumped on the bandwagon of irrationality and unreasonable politicking to cast all the blames on the ruling All People’s Congress Government.
While nobody is postulating that there are no internal mistakes that contributed to the problem, the fact is that our economic dilemma was principally brought upon us by extraordinary factors like the Ebola outbreak and extraneous factors in the international markets. Since some people are finding it difficult to accept this fact, a flashback may be necessary here.
We were doing fine before this economic meltdown . The only way we can successfully address this economic problem is to put aside all partisan politicking and look at the issues from an objective perspective. Now, let us look at the immediate past, just few years ago.
PRESIDENT KOROMA : HE PRESIDED OVER AN ECONOMY THAT WAS ADJUDGED THE SECOND FASTEST GROWING ECONOMY IN THE WORLD BEFORE THE EBOLA OUTBREAK
In 2012, the WORLD ECONOMIC FORUM was hailing us : “The (IMF) is also positive about the potential in the country and is forecasting 5.75% growth for 2012.With the progress in the ease of doing business, the investments being made in the country´s infrastructure and the expansion in the agricultural, tourism and mining industries, Sierra Leone is set to be one of the fastest growing economies in Africa this year.”
When the Economist Intelligence Unit —described as “The research and analysis division of The Economist Group and the world leader in global business intelligence”— released its projections for economic growth in 2014, Sierra Leone was ranked second as seen below :
It said : “Here are the 10 countries that are expected to have the most economic growth in 2014, ranked from first to last by percentage of GDP growth ” :
(1) Mongolia, 15.3 percent
(2) Sierra Leone, 11.2 percent
(3) Turkmenistan, 9.2 percent
(4) Two-way tie: Bhutan, 8.8 percent;
Libya, 8.8 percent
(6) Three-way tie: Iraq, 8.5 percent;
Laos, 8.5 percent;
Timor-Leste, 8.5 percent
(9) Eritrea, 8.0 percent
(10) Zambia, 7.9 percent
Do Sierra Leoneans still remember when these reports were published and how we celebrated them ? I know that many of the government’s critics suffer from self-inflicted selective amnesia.
Sierra Leoneans deliberately tend to forget so quickly. The good news above was before the Ebola outbreak in 2013. We were celebrating the fact that Sierra Leone had the second fastest growing economy in the world . Pro- government news outlets enjoyed a feast of screaming headlines on the joyful news.
Now, how could we have been celebrated all over the world as having one of the fastest growing economies and then all of a sudden face an economic slump ? Is it not rational to think that something dramatic and sudden must have happened to suddenly change things ?
EBOLA BROUGHT EVERYTHING IN SIERRA LEONE TO A STANDSTILL
A World Bank Overview in 2014 advertised what went wrong in Sierra Leone. It said that “Real gross domestic product (GDP) in 2014 was 7.1%, and 1.0% excluding iron ore production, compared to the pre-Ebola forecast of 11.3% and 6%. The Ebola Virus Disease (EVD) adversely affected several sectors of the economy, coupled with the closure of the mining sector due to decline in international market prices.”
This excuse was not contrived by the Government as its critics are contending. It was the reality. It was the truth. The World Bank Overview went on : “Moreover, the recent suspension of production by Addax Bioenergy has also added to the contraction in the economy over the second half. The economy is now projected to contract by a very substantial 24% in 2015. The effects of iron ore related closures and that of Addax could have devastating consequences on jobs and by extension families.”
SIERRA LEONE’S IRON ORE MINING COMPANIES WERE FLOURISHING BEFORE THE PRICE OF THE MINERAL CRASHED IN THE WORLD ECONOMIC MARKET
The Minister of Finance and Economic Development, Hon. Momodu Kargbo, in a recent exclusive interview with the AFRICAN ECONOMY Magazine , also said it all when he told the magazine that the Ebola Outbreak stalled the country’s economic progress . It did not only kill thousands of people , “It stretched public services beyond limits and reversed years of development gains.”
The Minister went on to say that : “The prevalent global economic recession with its attendant slump in commodity prices further damaged the economy. Between 2014 and 2015, global iron ore prices declined by more than 60% and led to the closure in 2015 of the mines that accounted for one half of the country’s exports and a quarter of GDP. The twin problems plunged growth rate to an unprecedented 21.1 per cent in 2015 from an high of 20.1 two years earlier . Trade balance deteriorated from $ 362. 3 million in 2013 to a mere $ 6.8 million in 2015 in 2015 while inflation into two digits. Revenue lost to the crisis was estimated at 350 billion leones ( $ 74 million ).
Even the IMF acknowledged the destruction that Ebola outbreak and the slump in commodity prices in the world economic market wreaked on the Sierra Leone Economy . Again, note that it was not the Government alone that came up with the disclosure.
In Press Release No.15/521, dated November 16, 2015 and titled”IMF Executive Board Completes Third and Fourth Review of Sierra Leone’s Arrangement under the Extended Credit Facility, and Approves US$46.14 Million Disbursement”, the IMF made it very clear that “The Ebola outbreak and the sharp drop in iron ore prices have dealt a severe blow to Sierra Leone ’s economy. The epidemic, which appears to be in its final stages, has exacted a heavy human toll (more than 3,5 00 lives) and disrupted economic activity. The sharp drop in iron ore prices has compounded these difficulties by shuttering the main iron ore mines. These twin shocks have prompted a severe slump in activity. Following several years of robust economic growth, economic output is set to contract by some 21.5 percent this year. ”
Those journalists, columnists and social media commentators who blame some of us , the government’s media executives, of insensitivity to the real issues should be the ones who should be blamed really that they are not in tune with reality . If all these facts and figures exist from these important forces, why are they giving them a blind eye in their analysis ?
It would appear to me that the people who criticize the government irrationally either do not read and understand these reports or they do not try to be up to speed with the realities in the international financial markets. All they are fixated on is blaming the Government for everything that happens and mounting a spectacular propaganda campaign against the Government in online newspapers and the social media. Instead of joining the Government to educate the public about these reports by the World Bank and the IMF, who know far better , they chose to confuse the minds of the gullible public by spreading lies about massive financial embezzlement and wrong reasons about why our mining companies ground to a halt.
In my next installment, we will look at how some of the same factors that have damaged the Sierra Leone economy have done the same to other African countries, who are in the same boat with us. This new phenomenon of dramatic economy slump is not a sole Sierra Leonean problem as people want to make it seem. . It is happening all around us .
Sierra Leoneans should take consolation from the fact that the Government is fighting tooth-and-nail to reverse the situation and return the nation to its previous pre-Ebola economic growth . President Ernest Koroma has assured the nation a speedy economic recovery. We have to support the austerity measures the government has mounted to address the economic slowdown.
KEEP A DATE WITH PART 2 :