*🇸🇱POLITICS AND INVESTMENTS IN SIERRA LEONE…‼️*
*M. O. Z*
DE REDEEMER
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*🗣”The Relationship between Politics and Investment is a whole determiner for a nation’s Growth or Collapse”* De Redeemer👌🏽
_Sierra Leone, a vulnerable nation in Sub Saharan still faces Multiple shocks for the past decades to date. The current state of the country is as a result of the existing relationship between Politics and Investments arguably…_
_One cannot dispute the fact that Politics is the remote of all sectors in the country (Sierra Leone), according to the Constitution and other National Laws, that places the President at the acme of affairs in the nation…_
_To endure the relationship between Politics and Investments in Sierra Leone is not a swift deal, due to the high degree of Conflict of interest that exists between Politicians and Investors…_
_We’re all aware that Politicians control Government on behalf of Citizens who voted them, and on the other end the Investors own the Investments…_
_If all factors remain constant, the politician sought for the welfare of the Citizens squarely. Whiles on the other hand the Investors sought for Profit Maximization to boom shareholders dividends…_
_The two key subjects in Question are constantly having their personal Interests with the rationale of out-shining each other for their specific Objective(s) /Goal(s)…_
_In Sierra Leone there are numerous factors that interplay between Politics and Investments. But in this piece, I will be keen at these key factors below, which have the tendency to grow or collapse Sierra Leone;_
_☄️Taxes_
_☄️Regulations and Policies_
_☄️Interest Rates_
_☄️External Forces_
*☄️TAXES*
_Tax is the Life Blood of Every Nation in the world, for its being the Backbone, and major Revenue sources of most countries across the Globe including Sierra Leone…_
_The most direct way Politics affects your investment is through taxes. These levies enforced by the government typically change over time for better or worse. They could affect specific industries or the entire economy due to the imposition Mechanisms/Tax System…_
_They could also either be good where there are incentives in an industry to drive investments) or they could be bad where higher taxes are imposed. In the latter case, income taxes and capital gains taxes could reduce your overall return when higher taxes are levied…_
_This drastically affect Investments in Sierra Leone, and have led to the closure of most Enterprises. Let’s denote the fact that tax is the major factor that drastically decreases the Profit ratio of an Entrepreneur/Companies. Hence, It is thus significant to be aware of the tax situation that exists in any industry/Country you’re investing in…_
*☄️REGULATIONS AND POLICIES*
_Regulations and policies are also created by the government and they are essentially rules or directives that prescribe certain types of conduct. Just like taxes, they could be Positive or Negative to whatever industry you invest in…_
_For instance, if a new regulation bans the importation of a certain raw material that a company you have invested in relies on, then there will be a negative impact on your investment at least till a new raw material supplier is found. And this mostly occurs when there is a Change of Government, where the new government has its own lenses or Interest…_
_Naturally, more rigid regulations will cause a negative impact on your investments. Policies like Price Control, this might also threaten the Revenue generation/Returns of certain companies. As an investor in the space, it is important to be abreast of regulatory changes, new laws, and policies…_
*☄️INTEREST RATES*
_Another way the Government and its Politics affect investment is in terms of interest rates on loans_. _The Government by its own volition can increase or decrease interest rates and this can have a major effect on Investments especially for Local/Indigenous Investors who lacks unlimited Equity Capital, but rely on Debt Finance(Loan) to Establish or decentralized investments…_
_In Sierra Leone the Central Bank Regulates all Commercial Banks and other Financial Institutions like MFIs,etc. to use a specific rate that would be of advantage for both the Lenders and the Borrowers…_
_Where interest rates on loans are high, it becomes costlier for companies to obtain credit and this might affect the profitability of companies in the market. However, just like other policies, it could also be favorable when interest rates are reduced…_
*☄️EXTERNAL FACTORS*
_External factors, especially the IMF, World Bank and other Moral Guarantors who’re seen as demigods in Sierra Leone, and Africa at large for socioeconomic stabilities, can sometimes influence Government to levy certain policies that cannot favor Investors…_
_Sierra Leone is a typical case study, the government always follows the doctrines of the IMF on Monetary and Fiscal matters, forgetting the spillover effects of those laws on investments and ordinary citizens…_
_If a nation continues to blindly apply complex policies on Individuals, Companies, and Commodities at large, they always create rooms for room for Inflation and other unbearable occurrences such as Business closures etc. If the latter takes course, it would adversely affect the GDP of the country…_
_Other ways the politics of a nation can affect investments include the Money supply, as it serve as a basis for Inflation/Deflation…_
_In conclusion, Sierra Leone continues being a fragile state due to the relationship between politics and Investments. Thus am encouraging every Potential/Existing Investors to be very curious on the Political, Economical, Social, Technological, Legal and Environmental (PESTLE) analysis on the country before Investing in order to avoid a late regret…_
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