By Ibrahim Seaga Shaw (The Original Hi-Tech).
When the SLPP presidential candidate for the March 7 2018 elections, Rtd Brigadier Julius Maada Bio said in his foreword to the SLPP 2018 elections manifesto that he was calling it ‘a Manifesto of the People’ because as he put it, ‘it is the product of very extensive and intensive consultations nation-wide, you would not help but agree with his leadership credential as a man who firmly puts the people at the heart of his vision for a better Sierra Leone if given the opportunity in the ballot box. Indeed, this is not a gimmick; it is for real! The SLPP Manifesto Committee headed by Maada Bio himself carried out very extensive and intensive consultations throughout the country. As one of the researchers involved in these consultations in Freetown and Kenema, I have thought it fit and proper to share my thoughts on some of the highlights of this manifesto of the people, which I will add: ‘by the people and for the people’. I want to start by thanking our presidential hopeful, Maada Bio, and the rest of the SLPP Manifesto Committee, for giving me the opportunityto be involved in carrying out these consultations. I also want to thank them for capturing most of my suggestions and recommendations on important sectors of our country, including the economy, business, education, agriculture, manufacturing, job creation, information and communication, creative industries, foreign affairs and international cooperation, and good governancein the final manifesto document. My inputs were mostly informed by the views and concerns of the people from various walks of life I spoke to during the consultations, as well as my knowledge and experience captured in some of my most recent research projects and publications.
I will focus this first article on the economy, out of a series I am writing on the manifesto as a whole in the countdown to the elections. The economy is by far the most important issue occupying the minds of majority of voters in the 2018 elections, and is key to the SLPP NEW DIRECTION SOCIAL DEMOCRACY vision informed by the democratic developmental state model. I am quite impressed by the holistic human rights approach of the SLPP NEW DIRECTION SOCIAL DEMOCRACY vision in promoting and guaranteeing ‘political, social, economic and cultural rights of all Sierra Leoneans through entitlement and access to basic necessities of life’ ( section1.2, political ideology). This captures both the First Generation (civil and political) and Second Generation (economic, social, and cultural) rights enshrined in the 1966 Twin covenants of the United Nations. This new vision is therefore not only concerned with negative rights- First Generation Rights– (or negative peace which means the absence of violence) but also with positive rights—Second Generation Rights=(or positive peace, which the Norwegian founder of peace research Johann Galtung describes as ‘the best protection against violence’.
The First Generation Rights include such civil rights as the right to life, personal liberty, security and integrity and fair trial; as well such political rights and freedoms as the right to vote and be voted for, the right to participate in the conduct of public affairs, freedom of association, religion, and expression. The Second Generation Rights include such economic rights as the right to work, the right to just, safe and healthy working conditions; such social rights as the right to health, social security, adequate standard of living, food, clothing and housing; as well as such cultural rights as the right to education, to participate in cultural life. The Twin Covenants, as I noted in my book ‘Human Rights Journalism (Shaw, 2012) also include the right to equality and non-discrimination and the rights of minorities, children, women, the aged, and people who are physically or mentally disadvantaged, although these latter rights, which came to be recognised as the Third Generation Rights, or Group Rights, were not strictly recognised by most nations of the world until the Vienna UN World Conference in 1993.
All these rights are succinctly captured in Maada Bio’s NEW DIRECTION for Sierra Leone as he stressed in his Foreword to the SLPP manifesto: ‘I promise a New Direction for Sierra Leone as a united, peaceful, progressive, dynamic, confident, enterprising and happy nation where the people have unlimited access to jobs, food, education and health services and where there is equal justice and equal opportunity for all. We must transform Sierra Leone into a Middle Income Country of the 21st Century. Well some critics may want to dismiss this as a mere promise coming from ‘just another opposition politician’who is ready to make any promise to get to power. However, what such critics are finding it very difficult to come to terms with is that Maada Bio is not just ‘any other opposition politician’ who makes promises and fail to see them through. At least, unlike others, he has a proven record of making promises and seeing them through. He did two great things that should make critics to think twice before dismissing him as ‘just another politician’. First, when he led the palace coup against Strasser in 1996 he promised to bring rebel leader Foday Sankoh out of the bush and restore peace to Sierra Leone. He delivered on this promise as hisefforts led to the signing of the 1996 Abidjan Peace Accord that brought a halt to hostilities and set in motion diplomatic efforts to end the war. Second, when, following the Bintumani conference, majority of civil society stakeholders called for democracy before peace, he promised to obey the will of the people; again he delivered on this by overseeing the process that ushered in the multi-party democracy that we are all enjoying today.
The picture of the socio=economic context of Sierra Leone presented in the PEOPLES’ MANIFESTO is very bleak indeed. Sierra Leone is a divided country with only few people having access to basic necessities of life while the rest of the ‘population live on less than US $1.25 a day, 3 out every 5 adults cannot read or write, life expectancy is 50 years compared to 53 in neighbouring Liberia and 59 in Guinea. Sierra Leone today is ranked as one of the world’s poorest countries. Most of the population either lack or has limited or no guaranteed access to basic services including education, healthcare and social protection. Half of the population cannot afford adequate food to maintain and live a healthy life’. It is to reverse this sad state of socio-economic affairs that the SLPP NEW DIRECTION SOCIAL DEMOCRACY has been conceived. The manifesto did not only state what the NEW DIRECTION government of the SLPP will do to reverse this gloomy state of affairs but went the extra mile to outline how this will be done and where the resources to fund it will come from. Maada Bio emphatically summarised this in his foreword to the SLPP PEOPLES MANIFESTO: ‘To achieve this audacious vision, we will change and transform our economy through diversification, transformation of our agricultural sector through mechanised commercial farming, invest in building our critical infrastructure and above all, provide efficient and effective political and economic management of the state and its natural resources guided by respect for the supremacy of the Rule of Law.’
TRANSFORMING THE ECONOMY THROUGH DIVERSIFICATION
I will now reflect on some of the steps highlighted in the part 2 of the SLPP NEW DIRECTION manifesto on changing and transforming the economy through diversification. To improve the macro-economic climate, the NEW DIRECTION manifesto has firmly committed to undertake a very robust management of internal revenue generation by cutting down excessive tax exemption and under invoicing, boost capacity among revenue collectors, reduce unnecessary bureaucracy and delays in clearing goods by setting up one-stop shop, improve reconciliation between assessment and collection of tax and import duties by NRA, improve transparency and accountability in tax and import duty collection. The key priorities of the NEW DIRECTION macro-economic transformation will include revenue mobilisation with the aim of increasing domestic revenue from 11.1 % of GDP to 20% of GDP within 3 years, and with the overall goal of improving revenue collection rather than imposing new taxation; public expenditure management by reducing overseas travels for government officials except where absolutely necessary, strengthening of public expenditure tracking, introducing monitoring and evaluation of government projects, reducing wastage on government vehicles and fuel; improve public spending on social services; re-introduce the public service commission and harmonise the public wage bill; public debt management by introducing the annual debt ceiling, limit external financing of social services to grants; access concessional loans with low interest rates, direct loans to projects with high economic returns, and reform the legal framework for accessing debt; exchange rate management by balancing our current account through the boosting of agricultural, manufacturing and value-added exports over imports of consumer goods, sustaining competitive interest rates to attract foreign investment; and boost access to finance to promote the private sector (both informal and formal).
PROMOTING AN ENABLING BUSINESS CLIMATE
In my view, one way of increasing access to finance, which is highly needed to boost the private sector, is to consider bringing down the current interest rate for bank loans of 27% to a more competitive level in line with neighbouring countries without necessarily undermining foreign investment. There is no way the private sector can grow if there is no incentive to borrow and invest in small and medium-term businesses, including the manufacturing and creative industries. In the UK and other developed countries of the West, interest rates are between 4 and 5 percent, which provides great incentive to borrow from the banks to invest in business. I am not aware of the interest rates in other neighbouring West African countries, but my feeling is that our current 27% is very uncompetitive and lacking incentive to boost local business in the country. It is in this vein of boosting the private sector that I am particularly upbeat about the SLPP NEW DIRECTION’s plan to ‘focus on (i) increasing access to finance; (ii) reducing the cost of doing business; (iii) promoting local entrepreneurship; (iv) capacity building and (v) developing the infrastructure.’
The NEW DIRECTION manifesto is committed to addressing the problematic factors for doing business identified by the Global Competitiveness Report such as ‘accessing financing, corruption, inadequate supply of infrastructure, inflation, tax rates and foreign currency regulations, crime and theft, poor work ethic in national labour force, inadequately educated labour force, poor public health, inefficient government bureaucracy, insufficient capacity to innovate, policy instability, tax regulations, restrictive labour regulations and government instability.’
One of the reasons Sierra Leone continues to rank as one of the most uncompetitive economies which, according to the Global Competitiveness Report in 2017, is ranked 146 out of 190 is because of the high rate of custom duties, far higher than those levied in our two nearest neighbours, Guinea and Liberia. This has led to a massive exodus of most Sierra Leone and foreign businesspersons to neighbouring countries, especially Guinea and Liberia. For those businessmen who have stayed, most have resorted to importing through neighbouring Guinea and Liberia and smuggling through our ever-porous borders, because, according to some of them who spoke to me on condition of anonymity, they would soon go out of business if they do not resort to this option. Sierra Leone is therefore losing a lot of revenue from customsbecause of this uncompetitive customs duty and that it is only the custom officers at the border posts and the ports who are benefiting from the bribes, which they collect from smugglers.
Moreover, there is too much red tape and bureaucracy involved in clearing goods through customs and the ports, because, in addition to the uncompetitive tax regime, there are loads of unnecessary delays sometimes taking days and weeks caused largely by the highly unreasonable demands for bribes by ports and custom officials. The processes and procedures such as valuation inspection carried out by a so-called African links are said to be too cumbersome, time-consuming and costly. This is largely seen by most businesspersons as extorting more money from importers who end up adding this to the mark up cost of the imported goods. Custom officers, who are also trained and qualified to do this with no extra cost to the importer and ordinary consumers, previously carried out this valuation service. Moreover, most importers I spoke to said this is a real waste of time and money as most of the time custom officers would refuse to accept the valuation carried by Africa Links and instead carry out their own fresh violation, whichwould mean that they end up paying twice in addition to the severe delays.
Another concern expressed by many businessmen is the three-day deadline imposed by the Ports after which a fee is imposed if you fail to clear your goods from customs which is very unrealistic given the bureaucracy and red-tape involved in clearing goods from the ports. In fact, most importers have reported that the ports are most of the time imposing fines just one day after the arrival of the goods if they are not cleared thus flouting the very three-day deadline imposed by them. The system is so exploitative that even week ends (when there is officially no work and therefore no body to process any customs or ports paper work) are included among the days to pay demurrage charges. It should not therefore come as a surprise to any right-thinking Sierra Leonean that inflation is skyrocketing with prices of goods and services hitting the roof. At the end of the day, it is the average Sierra Leonean consumer of these goods who would end up paying more for less with their very meagre income as the businessmen are most likely to factor in all the costs accumulated from this very cumbersome and exploitative system when fixing the prices of their imports.
Moreover, most businesspersonshave expressed concern that most of the time, even after paying the correct customs levied at the port of entry, months after these cleared goods have been sold, and some NRA officers would show up, carry out an audit and levy additional custom duty with the excuse that they did not initially pay duty that was due. With the keeping of records a real big call for most small and medium-term importers, all these constraints are just enough to slow down business in the country, and it is not clear how long businesses would continue to endure before they call it quit. It is not surprising that in the past three to four years there has been a considerable drop in the number of containers imported into this country. This has been having a knock-on effect on prices because the fact that supply is failing to catch up with demand for these goods, it is inevitable thatprices would continue to go up and only those in the high-income bracket would manage to have access to them. This has also been affecting revenue collection from customs duty. The plan by the SLPP NEW DIRECTION manifesto to introduce a one-stop shop for the clearing of goods and to improve revenue collection processes instead of imposing new taxation, among other things, would restorebusiness confidence and stabilise the business climate in the country.
PROMOTE AN EXPORT-DRIVEN ECONOMY
One of the main reasons why the Sierra Leone economy has consistently struggled over the years to balances its books is the over reliance on the importation of goods and services, including our basic food requirements such as rice which is subsidized by government at a very high cost to the country’s economy. It is in this respect that I commend the SLPP NEW DIRECTION’S plan topromote an export-driven economy where the private sector would be encouraged to play an active role in the areas of agricultural production, the creative and manufacturing industries where extractive and value-added food and other essential commodities for local consumption and exports are produced. With an improved easy access to finance as suggested above, Sierra Leonean businesspersons who are currently heavily concentrated on importing goods from foreign countries would be encouraged to invest in commercial agriculture and the creative and manufacturing industries with the aim of producing for both local consumption and exports. This would not only help our economy to balance its books, but it would also stimulate economic growth and provide the much-needed foreign exchange reserve which we need to stabilise our local currency and put inflation under control. Other countries in Africa and Asia have been doing this with great success and I see no reason why we cannot do it here. Where there is the political will there will always be the way to do it and I trust that the SLPP NEW DIRECTION would deliver this if given the opportunity.
SEPARATING FINANCE AND DEVELOPMENT DEPARTMENTS
In line with SLPP’s NEW DIRECTION imbibed in the political ideology of social democracy and the democratic developmental model, I strongly support the plan in the manifesto to separate the department or ministry of finance from that of development, a departure from the model used by the current APC government where the two departments are put together in one ministry. This APC model of putting the finance and development departments in one ministry could have largely been informed by President’s Koroma’s vision announced much earlier in his presidency that he was going to run Sierra Leone like a business with him serving as Chief Executive. Looking at how the economy has stagnated under his presidency, this business model has failed woefully and because of this the timing of the SLPP social democracy and developmental model is spot on with the plan to separate the two departments Keeping the finance and development departments separate while they still support each other would provide space for specialisation and prioritisation of sound macroeconomic and microeconomic fiscal policies in partnership with international financial institutions such as the World Bank, the African Development Bank and the International Monetary Fund on one hand in the finance department and pragmatic people-centred development policies and operations in partnership with development partners such as UN agencies and other NGOs on the other hand in the development department. In this way, the government would have very clear and separate plans on how to handle what counts as financial assistance by way of loans and what counts as development aid. I strongly believe that this is one sure way of realising the social democracy and developmental model set in the SLPP NEW DIRECTION manifesto.
NB—I will focus the part two of this article on HUMAN DEVELOPMENT in PART 3 OF THE SLPP MANIFESTOto be published next week.
THE WRITER OF THIS ARTICLE, DR IBRAHIM SEAGA SHAW, IS SENIOR LECTURER IN MEDIA AND POLITICS AT THE NORTHUMBRIA UNIVERSITY, NEWCASTLE UPON TYNE, UK