Sierra Leone Telegraph: 15 May 2022:
No foreign company operating in Sierra Leone or local firm paying for goods and service coming from abroad can function without the supply of foreign currencies by the Bank of Sierra Leone to make payment transactions.
Last week, the government of Sierra Leone issued stark notice to mining companies, that it will no longer provide foreign exchange to mining companies and other large businesses to pay for importing of fuel, starting from next month.
The government’s Petroleum Regulatory Agency is accusing mining and other large companies of hoarding – “stockpiling diesel fuel”.
The government has provided no evidence of fuel stockpiling by these firms, and will drive away foreign investors whose operations largely depend on fuel consumption in a country where electricity supply is highly unreliable and intermittent.
Economic policy experts say that this policy will have catastrophic consequences on the economy in general and the mining companies in particular, who account for over 80% of the country’s export revenue.
But the government says that stockpiling and hoarding is driving rising fuel price increase, compounded by global supply shortage caused by the war in Ukraine.
“This situation is potentially getting serious as there are evidence that mining companies are stockpiling diesel fuel, constraining supply to the ordinary citizenry and small businesses,” the Petroleum Regulatory Agency’s statement reads.
The country’s Central Bank provides over $100 million a year in foreign exchange to pay for fuel import.
This fuel problem seems to be consistent around the world. Even in my wildest dream, I never believe that I will pay almost $5 for a gallon for petrol in the USA. I wonder what the situation of non oil producing countries especially in Africa is like. Scary stuff !!.
People were anticipating that the Pandemic will be downgraded to Epidemic by now, but unfortunately Variants still popping up every year. Even the war between Russia and Ukraine seems to be prolonged due to President Putin’s stubbornness and insecurity.
With the fears growing about the possibility of recession due to high inflation in the USA, most economists believe that the future of the market is now unpredictable. Stocks continue to fall with big retail companies like Target and Walmart have recorded big losses. The main shocker is the shortage of Baby milk in the USA.
I hope and pray that the big companies in Sierra Leone will continue to work with the finance ministry to mitigate this fuel situation.
The Bio government is sounding more like Putin.Today the Russian Federation is holding the most dubious record of political, social ,cultural and economic sanctioned a country can endure .out pacing North Korea , Iran , Cuba and Venezuela.Given the current state of economic hardship our country is going through with a run away inflation, and double digits youth unemployment any future economic growth is as rare as chicken teeth . And given Putin’s war of choice against Ukraine is mostly financed by his country’s natural resources, hence his demand for foreign European governments that depends on his natural gas, oil and other commodities that his country’s export to them is paid in the Russian rubbles.One can see what Putin is trying to achieve here. Now if we contrast that with Sierra leone , our country is not under any international sanction regime. The last time our country was placed under sanctions was the UN arms embargo imposed on us during the RUF wars .Now Boi and his government have shepherd our country to such an economic mess ,his demands to foreign investors in the mining industry to stimulate growth or to help stabilise our currency will either be ignored, or he and his Finance Ministers should be school about how the global integrated financial markets work.This policy is a race to the bottom .Trying to blame foreign investors for your economic miscalculation is no brainer.As one famous Chines leaders said no matter whether the cat is black or white as long as it can catch a mouse that’s what counts.Yes over the passed two Covid19 have inflicted a double whammy but he should have fix the roof when the sun was shining.
Mining companies sell their product over seas in Foreign currencies and bank the proceeds of their profits in Foreign Banks. Why would they turn to the Bank of Sierra Leone for Foreign currencies when they trade what they mine abroad in Foreign currencies?
To uphold transparency and accountability from the government, we may want to see some evidence about the allegation of foreign investors. Looking forward to reading the good news from the government claims. May Allah bless Sierra Leone and the SL telegraph for their tremendous support to update us with current affairs in our dearest country.