President Bio’s first 100 days transforming Sierra Leone economy

Sierra Leone Telegraph: 22 July 2018:

In his foreword to the Sierra Leone People’s Party Manifesto, 2018, as then Presidential Candidate,  President Julius Maada Bio writes that: “Our New Direction therefore offers the people of Sierra Leone a stark choice between the current ‘Business as Usual Status Quo’ of the APC that has converted Sierra Leone into a land of poverty, rampant corruption, gross indiscipline and underdevelopment and the SLPP’s New Direction’s promise of efficient and effective management of the state that will make Sierra Leone a significantly better country through inclusive politics, inclusive economic growth, inclusive development and inclusive governance.”

This Stark choice has been made ever-glaring by the economic burden left by the All People’s Congress Government: external debt amounting to US$1.6 billion; domestic debt amounting to Le4.99 trillion; an exploded payroll of Le2 trillion; Government arrears to local contractors and vendors amounting to US$1.4 billion or Le10.7 trillion; the suspension of the Extended Credit Facility by the International Monetary Fund; and the suspension of the operations of Shandong Steel as the major exporter of iron ore.

With such inheritance, the priority for president Bio in his First 100 Days has been to pursue fiscal consolidation focusing mainly on enhancing domestic revenue mobilization and expenditure rationalization to restore macroeconomic stability.

Despite the Government’s impressive measures on economic recovery, the achievements within the First 100 Days in governance including the historic reading of the Supplementary Government Budget on 13th July, 2018 have shown a Government which is truly a New Direction.

The Bio led government achievements in its first 100 days, can be seen in four key policy areas: Transforming the Economy; Human Development; Improving Governance and Improving Infrastructure.

So what has the government done in transforming the economy?

The new administration took over governance of the country under very challenging economic conditions. To address these challenges, President Bio announced two separate executive orders: Executive Order No. 1 on Revenue Mobilisation (Published 9th April 2018) and Executive Order No. 2 on Expenditure Control (Published 25th April 2018).

The abuse and misuse of duty and tax waivers in recent years, resulted in significant loss in domestic revenue amounting to Le1.12 trillion during 2015 – 2017.

Within 100 days, the Bio led government established a Special Committee to review the current process and develop an appropriate policy for granting duty and tax waivers.

In April to June, the Government collected a total of Le1.07 trillion of domestic revenue (a monthly average of Le 356.7 billion, far exceeding the monthly collection of Le 271 billion for the same period in 2017, reflecting strong efforts by the Government to stop revenue leakages and curb excessive duty waivers.

Prior to the assumption of office of the new Government, several MDAs collected and retained Government revenue, thereby undermining Government’s revenue collection efforts.

Within its First 100 Days, Government has implemented the Treasury Single Account and total collections from Treasury Single Account agencies amounted to Le104 billion during April – June, including Le60 billion transferred into the Consolidated Revenue Fund from their balances held at the commercial banks.

Prior to the Executive Order No 1, Oil Marketing Companies (OMCs) were paying excise taxes and duties in arrears of two months or more. This led to difficulties in reconciling payments due and actual payments made.

Within its First 100 days, consistent with Law, Customs and Excise Department would now allow Oil Marketing Companies to uplift petroleum products from the depots only after the (i) full payment of excise duty (ii) 50 percent of import duty before uplift; remaining 50 percent within 7 days after uplift, failing which the full force of the law applies

As a result of the revenue mobilization drive, within the First 100 Days this created fiscal space that enabled the Government to pay salaries of civil servants and staff of subvented agencies without resorting to domestic bank borrowing. In addition, the Government was able to provide resources to MDAs including to Universities and other Tertiary institutions; Anti-Corruption Commission; National Revenue Authority; Audit Service Sierra Leone, the Police, Military and Correctional Services; as well as pay examination fees for NPSE, contribution to NASSIT for Civil servants and other public sector employees and subsidy to the Electricity Distribution and Supply Authority (EDSA) and Electricity Generation and Transmission Company (EGTC).

The Government Wage bill accounts for 30% of Government expenditure and 60 % of domestic revenue in 2017. In addition, APC left an exploded payroll of Le 2 trillion.

Within the First 100 Days, the Ministry of Finance through the Accountant-General’s Department started cleaning the Government Payroll by ensuring that all public sector workers above the age of 60 years are removed from the payroll effective end May 2018, except for teachers, whose deadline has been extended to end August 2018.

As a result of this policy, about 2,118 employees have had their assignments ended. Hence, it is expected that Government will save about Le5.0 billion monthly going forward and this has provided fiscal space to recruit 1,600 new teachers.

Expenditure on overseas travel accounts for a significant proportion of the recurrent expenditures of MDAs. Within the First 100 Days, the Ministry of Finance ensured that MDAs’ travel costs are within their approved budgets. Furthermore, per diem allowances will no longer be paid to Government officials on their return trip for official travel.

The implementation of this measure is already in full effect. Government is able to a make savings of Le 11 billion from the implementation of these policy measures, with Le760 million on foreign travel alone.

Within the First 100 days, the Ministry of Finance has ensured that all public procurement transactions above the threshold of Le60 million (sixty million Leones) are done through open competitive bidding, except under compelling circumstances such as natural disasters and epidemics as well as security hardware.

In line with section 23 of the Bank of Sierra Leone Act (2011), Government has ensured that prices for contracts shall be quoted and payable only in the local currency (Leones), and that all existing contracts already quoted in foreign currency shall therefore be paid in Leones. Government contracts awarded would henceforth be awarded in the local currency. With this measure, all remaining payments for contracts that were earlier negotiated in US$ are now to be paid in the local currency.

Within the First 100 days, Government discontinued payment for fuel, internet and mobile phone services in the homes of all government officials with the exception of the President, Vice President, the Attorney-General, Chief Justice and the Speaker of the House of Parliament and their respective deputies. Furthermore, all fuel supplies to the residences of these officials has been terminated with immediate effect.

Within the First 100 Days, as Government strengthened fiscal discipline and transparency in the management of public resources, expenditures declined to an average of Le230.8 billion during April-May, 2018, from Le 535.2 billion per month for the same period in 2017.

Within the First 100 Days, the Ministry of Finance, through the Audit Service, has instituted a financial and technical/forensic audit on all domestic arrears for goods and services left by the previous Government amounting to Le10.7 trillion (US$1.4 billion). The audit is to verify the authenticity of the arrears and it is expected to be completed by mid-August.

The Extended Credit Facility programme of the IMF was derailed under the previous administration, mainly due to weak domestic revenue collection resulting from the non-implementation of agreed measures with the IMF. Within the First 100 Days, Ministry of Finance re-launched the Extended Credit Facility (EFC) with the IMF.

Subsequently, the IMF made a staff visit to Freetown on June 4^th to 12^th, 2018, to carry out a stock take on the country’s economic, fiscal and financial situation. The IMF commended the Government for the measures taken so far and a second visit is being planned for September 2018.

Within the First 100 Days, the Ministry of Finance carried out a review of the system used to track and monitor the status of the audit recommendations, and in addition reviewed progress made by the MDAs in implementing the recommendations of the Auditor General contained in her 2015 Annual Audit Report.

Within the First 100 days, the Ministry of Finance has engaged development partners for the enhancement of the budget support that was not disbursed by development partners in 2017. In particular, the Ministry of Finance requested the World Bank to increase the budget support to US$30 million for 2018 and the Ministry has finalized the financing agreement with European Union for budget support covering 2018 – 2020 amounting to Euro 80 million.

It is expected that the budget support programme will be submitted to the Board of the World Bank in October 2018 and that preconditions for the disbursement for the European Union funding will be completed by end of July 2018 and submitted to the European Union for release of the 2018 budget support.

Within the First 100 Days, the Minister of Finance tabled in Parliament a revised supplementary Government Budget and Statement of Economic and Financial Policies with the theme: “Road To Efficient Economic Management”.

Within the First 100 Days and to drive the process of delivery, the Minister of Agriculture set up a Technical Advisory and Resource Mobilization Team to lend support to the Ministers and the professional team in the delivery of agricultural services.

The team has been tasked to create an effective system for the delivery and alignment of MAF’s operations with the President’s vision and priorities for agriculture; promote accountability, and to coordinate efforts between divisions in the Ministry and with partners.

Recognizing the indispensable role of the private sector towards the achievement of food self-sufficiency, as articulated in the President’s State Opening of Parliament Speech in May 2018, the Ministry of Agriculture has planned to organize a trailblazing private sector investment conference.

The conference will aim to direct the attention of the private sector towards profitable investment opportunities in the rice value chain in Sierra Leone.

This consultative engagement will not only focus on presenting a strong business case for investing in the agricultural sector, but also, it is set to obtain concrete commitments from key private sector actors.

Intensive logging for timber is a major threat to Sierra Leone’s forests; even protected areas have been breached in the past decade.

The Ministry of Agriculture and Forestry (MAF) is providing leadership towards the development and operationalization of a National Forestry Management Agency to ensure the sustainable management of our forest resources.

In the same vein a sustained nationwide reforestation campaign is being scheduled for August 2018 to take advantage of the rains. Noteworthy, the MAF has also initiated public private partnership to develop a real time monitoring system for sustainable forestry management.

Within the First 100 days, input distribution for the 2018 cropping season has commenced: 40,000 farm families at 1 bushel (25kg)/farm family will be supported for lowland rice cultivation across the country; 74,000 bags (3,700 MT) of fertilizer have been prepositioned for distribution to farmers across the country to accompany the seed rice.

The previous APC Government was very weak on tax collection from mining companies, as many were given tax exemptions. Within the First 100 Days, the Ministry of Mines and Mineral Resources has collected US$2.7 million from various mining companies on revenue collection.

The Ministry of Mines and Mineral Resources is expecting US$3.3 million from KINGHO Mining Company by the end of 2018 and payment plan has already been submitted for this amount.

The Ministry of Mines and Mineral Resources is in the process of the cancellation of 40 mining right holders which will free up more space for potential investors.

Within the First 100 Days, three policy documents have been reviewed and comments incorporated, ready for cabinet discussion and approval. These documents are: draft Sierra Leone Minerals Policy; draft Artisanal Mining Policy and draft Data Management policy. These documents will shape and inform the revised Mines and Minerals Act of 2009.

At the time of assuming office, revenue generated was Le 36.83 billion for January to March 2018. Within the First 100 days since the coming to power of the SLPP Government and as at 12th June 2018, the Ministry of Fisheries and Marine Resources has generated a total of Le48.69 billion. This does not include penalties of US$ 455,000 levied on fishing vessels for various crimes committed.

In its quest to combat Illegal Unreported and Unregulated (IUU) fishing, the Ministry is utilizating a satellite based Vessel Monitoring System (VMS), to track the activities of all licensed fishing vessels in the country’s waters.

A team of experts from the United Nations University – Fisheries Training Program and the World Bank funded West Africa Regional Fisheries (WARFP) Project conducted a training workshop on the Analysis of Vessel Monitoring System Data from May 28 to June 1, 2018. The overall objective of the workshop was to “introduce to participants the uses of vessel monitoring system data in fishery management applications and to provide a venue to exchange ideas for more comprehensive training in this field in the future”.

In order to provide the financial resources needed to fight Illegal Unreported and Unregulated fishing, Ministry of Finance has agreed to support the Ministry of Fisheries and Marine Resources with fuel and other operational costs to be able to police  territorial waters using the SIK Fisheries patrol vessel.

The Ministry of Fisheries and Marine Resources has also engaged the Ministry of Transport and Aviation and the European Union Head of Delegation in Sierra Leone with a view to fast track the activities to be completed for the European Union Yellow Card to be rescinded.

One of its main concerns is the deletion of fishing vessels from a Ship registry in Cyprus, which the Government cannot monitor or control. As a flag state, Sierra Leone should have the capacity to monitor the activities of all fishing vessels flying her flag even in international waters.

Within the First 100 Days, the Ministry of Fisheries and Marine Resources has worked in close collaboration with the Ministry of Health to address Fish Quality Assurance issues.  They have already met with the head of the European Union in Freetown to start communicating with the Directorate of animal health of the European Union (DG SANTE) to address the export of fishery products to the EU.

The Minister of Fisheries and Marine Resources visited the Fisheries Outstations of Goderich, Tombo, Bo , Gbondapi, Sulima and Shenge, which was never done before by previous Ministers. The visit also included a tour of the Ministry’s facilities including Fish Receiving Centers that are at the moment not fully operational. The  ministry saw the need for a Fisheries Extension Office, an Outstation in Sulima because of the huge presence of foreign fishers mainly Liberians since it is a border town and many times there are conflicts with the local people.

The Ministry of Fisheries and Marine Resources has secured a land and has informed Ministry of Finance about the need to make the outstations functional as they provide extension services to fishing communities, especially for fishery data collection and fisheries surveillance in this area.

A contractor has been contracted to complete the fencing of the Bo Aquaculture and Experimental Station which has been under intense encroachment by people. The ponds are being rehabilitated and stocked for the production of Fish. This will reduce the fishing pressure in the Marine sector and provide much needed fish in the provinces.

Fish farming or Aquaculture is a key priority for the administration of the New Direction and the Minister wants to make sure that the key district headquarter towns have fully functional aquaculture sites to address the issue of fish availability and accessibility.

On the 18th June, 2018, the Ministry of Fisheries and Marine Resources held it inaugural meeting with a delegation from the Ministry of Agriculture of the People’s Republic of China after the signing of an MOU on Fisheries Cooperation between the two Countries in October, 2017.

The inaugural meeting was to plan how the Joint Fisheries Committee can work together to implement what is enshrined in the MOU.

The Ministry of Fisheries and Marine Resources, together with the Ministry of Finance, the NRA and the Accountant General have decided that the present licensing fees and scheme should be reviewed even though there had been some increment last year. Staff of the Ministry and the NRA are currently reviewing the fees and other charges taking into consideration fees that are levied within the sub-region.

Within the first 100 days, the review and drafting of the National Heritage Bill is in progress at the Ministry of Tourism and Culture. This bill will establish a Commission of Arts and Entertainment. Also, the review of the Development of Tourism Act 1990 in progress to make way for better functioning and delivery of the Tourism Sector.

A Public-Private Partnership unit and Community Outreach unit established in the Ministry of Tourism and Culture Affairs to bridge the gap between the private sector, stakeholders and the Ministry.

A 3-year partnership with PUM (a Dutch-based training organization) secured to strengthen the capacity of the Hotel and Tourism Training Centre (HTTC), Brookfields Campus.

The first National Consultative Conference for the Entertainment Industry organized by the Ministry of Tourism and Culture Affairs on 23/06/2018 with an objective to come up with measures that will enhance the growth and development of the industry.

The Ministry of Tourism and Culture Affairs has forged a partnership with the Ministry of Industry, Commerce and Arts of Burkina Faso to enable the participation of Artisans in Africa’s biggest Art and Crafts Exhibition to be held in November 2018, in Ouagadougou.

The installation of mobile toilets along the Lumley Beach has been facilitated. Plans have been put in place for the development of Levuma beach with the use of environmentally friendly structures in collaboration with the Levuma community. This provides an alternative livelihood for the community while at the same time provides protection of the beach in return. The model is to be replicated in other tourism sites.

Discussions with key stakeholders in progress to support the Cultural Village and the setting up of a non-formal Institute of Arts and Culture. And, the initiative for the regular supply of food to the National Dance Troupe by FAO in progress.

Source: Office of the press secretary Report on President Bio’s first 100 days in office