Potential Consequences for the Country on the Bank Governor’s Redenomination of the Leone

Economy

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August 15, 2021

Currency redenomination generally involves the process whereby a country’s currency is recalibrated by reducing the number of zeros in the currency to achieve a set of given economic and fiscal objectives. From an economic point of view, a country’s currency can be redenominated due to one of the following reasons; hyperinflation, decimalisation, or a country joining a currency union.

In general, redenomination is implemented in response to hyperinflation, which progressively increases the nominal prices of products and services, decreasing the real value of the monetary unit in the local market. Over time, prices become excessively large, which can impede routine transactions because of the risk and inconvenience of carrying stacks of bills, the strain on systems, e.g. automatic teller machines (ATMs), or because human psychology does not handle large numbers well. Authorities may alleviate this problem by redenomination: introducing a new unit that replaces the old unit, with a fixed number of old units being converted to 1 new unit.

If inflation is the reason for redenomination, this ratio is much larger than 1, usually, positive integral power of 10 like 100, 1000 or 1 million and the procedure can be referred to as “cutting zeroes”. examples of redenominations include:
New unit = × Old unit Year
Argentinean peso = 10 000 Argentine peso ley 1983
Argentine austral = 1 000 Argentine peso 1985
New Mozambican metical = 1 000 old meticais 2006
Second Zimbabwean dollar (ZWN) = 1 000 ZWD (first dollar) August 2006
Third Zimbabwean dollar (ZWR) = 10 000 000 000 ZWN August 2008
Fourth Zimbabwean dollar (ZWL) = 1 000 000 000 000 ZWR February 2009
Ghana ( Ghanaian Cedi) = 10,000 New Ghanaian Cedi 2007

Generally speaking, currency redenomination has no or any direct impact on the economy. Since the value of the currency will remain absolutely constant, and purchasing power will remain the same, the real impact on the economy in micro and macro terms will be zero: demand and supply of goods and services will not change; net investment, government spending, the balance of payments and net exports will only experience cosmetic changes with no economic impact whatsoever; and on household consumption level, any possible effect on spending habit will be purely psychological as there will be no economic difference between the pre and post redenominated currency (Lead Capital Limited, 2007). Accordingly, it is the only redenomination of all economic values: prices of goods and services, financial assets and liabilities, salaries and social benefits will basically be the same.

Redenomination itself is considered symbolic as it does not impact a country’s exchange rate to other currencies. It may, however, has a psychological effect on the population by suggesting that a period of hyperinflation is over and is not a reminder of how much inflation has impacted them.
In all of these, the Central Bank Governor, and his Board should explain their policy objectives of such a decision to the general public. In his interview with the BBC’s Umaru Fofana, he reiterated that the administration has been able to curb inflation, referencing the need to reduce high transaction costs. The hard, but uncomfortable truth is redenomination doesn’t reduce high transaction costs as the face value of the currency remains the same. The same unit of money used to buy on redenomination will be the same, as it doesn’t change the purchasing power.

Countries that have redenominated their currencies since 1923 have always been fighting and trying to curb the hyperinflation in their countries. The Governor, in the same, interviewed mentioned Germany after the end of the First World War. The German adopted to redenominate the Rentenmark of 1,000,000,000: 1to the new Papiemark due to hyperinflation. The polish did the same thing in 1924 when the Polish Marka was trading at 10,000,000 to USD 1. Same reason, the country was suffering from hyperinflation. The Polish Zloty later replaced it at the rate of 1,800,000: 1. (Redenomination – Wikipedia)

Out of the 146 countries that have used Redenomination, 89 ( 61%) of these countries were fighting inflation; 20 of these countries were due to the Soviet Union, Yugoslavia, and Austria-Hungary break-up. The rest were either due to war, independence, and monetary union, seizure of money supply by government, lack of money supply, unification and countries wanting to dollarise their currencies.

THE DANGERS OF CURRENCY REDENOMINATION:

Inflation or hyperinflation is often the frequent cause of currency redenomination. Governments employ currency redenominations because the existing or old currency has been debased so severely that it is worth very little or is essentially worthless. As often stated, the fear with currency redenomination is that hyperinflation will occur with a vengeance within a year or two of such events happening.

Let’s use the Leone as an example.

A common redenomination would be 1000: 1. If this goes ahead as the Governor is fighting for, 1000 current Sierra Leonean Leones would be worth one new Leone (Le1). However, the problem is that the debased Leones remain. It is just being redenominated differently.

Let think of it this way, if transportation cost to Bo from Freetown today cost Le 45,000 when the redenomination occurs, then, assuming everything is normal, and it would be Le45 with the new currency; most of the products and services would follow a similar trend. However, within 12-18 months (if not sooner), prices will dramatically increase before most people even notice. Examples include Zimbabwe, Ghana, Venezuela. History has shown that the currency redenomination process creates a problem whereby individuals find it hard to understand and re-adjust to the time value as prices are still experiencing an evolution to the new scale.

Redenomination kills off the possible threat of money substitution that occurs when devaluation takes a strong momentum of its own or under a current of high inflation, e.g. money substitution. While redenomination reduces the face value by eliminating zero, it does not increase purchasing power. In reality, it provides a failed solution to monetary illusion, even though the quantity of money has shrunk. Indeed, the intrinsic value of money remains static.

The questions of why, when, and how any policy will be carried out, inclusive of redenomination, determine the policy’s success. Thus, policy timing and considering the roundabout effect on the economy become critical for intelligent outcomes.( The Case Against Redenomination and Demonetisation of the Naira At This Time (proshareng.com)

Therefore apart from considering the monetary cost and how much friction such a policy would pose at this point of the cycle, questions must be asked, and answers received as to “what will be the actual cost on the real economy in the short term”?
Therefore, how much of an alternative do either redenomination provide in specifics? Such a conclusion cannot arrive without a litmus test.

Can it be used as a stabilisation tool?

Redenomination is used as a symbol of reforming a process. It is thereby used at the end of the stabilisation programme, which symbolically represents a new era in a country. E.g., Brazil in 1994 and Turkey in 2005.

Possibility of being a Trojan horse?

The Sierra Leone Bank Governor’s redenomination can be a Trojan horse when the new scale adopted is very cumbersome to understand. It could affect the level of business confidence and pose a country risk. It also becomes a Trojan when it fails to smooth society’s expectations. When it fails to shine, the effect neither nor provides the feel-good perception; such will add to the already existing symptomatic weakness in the economy, affecting its financial credibility.

Has Sierra Leone reached the threshold?

As indicated earlier, history has shown that most redenomination carried out has been in response to hyperinflation. E.g., Germany in 1923, Poland in 1924, Argentina in 1983 and Zimbabwe in 2006. Countries that have a high nominal currency to the dollar ratio have carried out the policy. Turkey in 2005 carried out a redenomination to deaden accounting problems and restore confidence in its financial system. Sierra Leone has inflation of 13.7%, which is not hyperinflation. At the same time, Sierra Leone’s Leone to the USD dollar ratio falls within an acceptable percentage of convenience compared to the Iranian Rial.

What happens to the net value of money?

The net value of money will remain static even after the process. Therefore, the purchasing power parity remains the same. So redenomination actually provides a failed solution to monetary illusion.

What will be its impact on inflation?

Redenomination does not stoke off inflation on its own. Redenomination is a means, but not an end in itself. Countries with inflation driven by supply shocks (even after a redenomination process) will still experience high inflation, or inflation will remain essentially unchanged. E.g., Brazil, Zimbabwe, Argentina and Venezuela. Its inability to address inflation makes it a repeated ritual, especially in Brazil and Argentina, for some time.

Can it reverse cyclical downturns?

If Sierra Leone was experiencing a high nominal to the dollar ratio, one will argue that accounting problems accruing from high ratios hinder foreign inflow. That does not exist; Redenomination will, therefore, not change cyclical downturns. E.g, Argentina in 1983.

Conclusion empirically, Sierra Leone has not reached the threshold where redenomination is needed. Even if carried out as being discussed, it will not address inflation or cyclical downturns. More importantly, the net value of money will remain essentially unchanged. It will be more of a distraction than a solution at this point. Redenomination can help to erode illicit cash and bring the informal sector into the financial system. The downside risk of monetary sterilisation, which would cause self-inflicted shrinks in the growth of the currency in circulation, will exacerbate downside risk and cause vagaries in the economy. Such impulses are not needed in a period of recession. (The Case Against Redenomination and Demonetization of the Naira At This Time (proshareng.com)

Sierra Leone: NEW WORLD BANK REPORT ON MAADA BIO’s GOVERNMENT IN RELATION TO SMALL INCREASE IN POVERTY

Economy

By

SLL

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August 9, 2021

by Mahmud Tim Kargbo
August 9, 2021

In a report published on the 5th August 2021 by the World Bank titled “Sierra Leone 2021 Economic update: Welfare and Poverty Effect of the COVID-19 Pandemic” (https://openknowledge.worldbank.org/handle/10986/35784), the report found that restrictions put in place to contain the spread of COVID-19, as well as the downturn in the global economy, led to a small increase in poverty in the country, thereby reversing the previous trend of poverty reduction. In the same report, the urban area, Freetown, has seen the largest increase in poverty. For Sierra Leoneans to get a proper understanding of the report, I categorise it in three ways by asking the following questions: Do we agree, what is responsible for the small increase in poverty as reported by the World Bank and who should be blamed?

DO WE AGREE?

Partially, whilst there’s a small increase in poverty, It is very clear that poverty has a measure in terms of its relative and absolute form. For example, relative poverty compares the person or household income (expenditures) to the income distribution of the country of residence, it’s a first indicator of inequality. Absolute poverty on the other hand, is measured with reference to the cost of a basket of minimum basic goods and services, for instance food.

With recent research conducted, the Government of Sierra Leone in it capacity provided series of funds to cushion the poverty on the people by offering series of incentives to the business people and the destitute. For example, there was a $50,000,000 short term financing that was issued to importers of various commodities at a very minimal lending rate of 7%, with the expectation that this will bring about a reduction in the prices of basic commodities in the country to meet the pockets of the suffering majority during the pandemic. To the astonishment of government authorities, some of these importers purported that the freighting cost of importation has increased by more than 200% as a result of the pandemic. Thereby bring about the small increase in poverty in the Bio regime the World Bank is referring to in its recent report.

WHAT IS RESPONSIBLE FOR THAT?

Prior to the advent of COVID-19, the economic and business sector in the country has always been skewed in favour of few individuals whose interests are not to support the government of Sierra Leone, but rather to continuously amass wealth and make the majority of the people in the country impoverished. A clear case in point is the example of the $50,000,000 soft loan credit given to various importers in the country, in which the government was expecting prices of essential commodities to remain at a pre-pandemic level because of the low interest rate given on this facility. Unfortunately, these same few individuals were able to circumvent the government by casting false claimed on increase in freighting costs to justify their selfish interest, and continue to undermine the government’s action to ensure prices of essential commodities increase during the pandemic this necessitated the small increase in poverty as indicated by the World Bank report…

Reasons, why some countries were able to sustain their favourable economic conditions for their people, is due to the fact that some of these countries aren’t import driven economies as is the case for Sierra Leone. A strong and vibrant agricultural sector should have been a counter to the increase in these commodity’s prices. Hence the reason why the government of President Bio is working very hard to lift the agricultural sector from its current small scale to mechanised level. For example, the Tormabom rice project, once developed, will bring a reduction in the importation of the country’s staple food and also reduce the need for international hard currencies.

Another consideration by the Bio led government is its effort to diversify into the consumption pattern of the people in the country. Commodities such as cassava, potato, yams, plantains and bananas could be alternatives to rice. And hence bring returns to those harvesting these commodities to reduce the small increase in poverty as stated in the World Bank report.

WHO SHOULD BE BLAME?

Based on the needs of the country for Direct Foreign Investment in the agricultural and other sectors, the role of the World Bank, International Monetary Fund, and the African Development Bank is very much pivotal at this juncture. Reasons being, most Foreign Direct Investments in third world countries often requires government guarantees on which to based their investment upon.

The World Bank, International Monetary Fund, and African Development Bank being the primary interface of these Foreign Direct Investments and governments in third world countries, their constant perception or assertion of debt increase and lack of guarantees often dissuade these investors from committing their funds to these countries. Hence the low level of investment in agriculture and other sectors which should have created the much-needed employment facilities to reduce the small increase in poverty as indicated in the World Bank report.

A typical example in relation to this Foreign Direct Investments which should have created an enormous impact on the Sierra Leone economy is the establishment of a smelting plant for iron ore, the country’s main export to finished products such as rebar and other steel metals. Rather than the World Bank, International Monetary Fund and African Development Bank supporting this kind of project, they would rather prefer for the country to engage in giving mining licences and concessions to foreign companies with no positive impact on the economy and the people in the country.

IMF/ AFDB Lies on Sierra Leone High Risk Debt Distress EXPOSED

Economy

By

SLL

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August 4, 2021

by Mahmud Tim Kargbo
4th August 2021

COVID-19 pandemic has caused a surge in public financing needs as the Bio led government and other governments around the globe spend more to mitigate the socio-economic consequences of the pandemic. In this regard, the International Monetary Fund and the African Development Bank deliberately failed to understand that the average debt to GDP ratio across government is expected to increase significantly.

Since the COVID-19 pandemic began in early 2020, governments across the world have announced fiscal stimulus packages ranging in cost from about 0.01% of GDP to about 10.4% of GDP. Government financing needs surge as countries have to fund the packages aimed at allowing their citizens to weather the social and economic consequences of the pandemic. The International Monetary Fund and the African Development Bank in their analysis failed to take into consideration that these fiscal stimulus packages largely have immediate direct implications to government spending, budgetary balances, borrowing needs and debt levels. Although about a quarter of countries in the globe use revenue measures such as tax relief and tax payment deferrals as an intervention measure to effect expenditures and public investment in health, support to smaller medium-size enterprises and cash transfers. The International Monetary Fund and the African Development Bank willfully failed to understand that these surge in government financing needs as a result of the COVID-19 spending result in fast pace debt accumulation to the Bio led government and other governments around the globe.

In their desperation to champion what many right-minded nationals see as regime change, the International Monetary Fund and the African Development Bank skilfully avoid grasping the fact that having debt doesn’t necessarily mean that a country is poorly run or financially unstable, in fact, some of the world’s biggest economic powers have a lot of debt with Japan topping the chart with 257% of debt to GDP ratio and the United States with 106.78%. Though there’s a fine line drawn between a healthy and unhealthy amount in terms of debt composition.

Both the International Monetary Fund and the African Development Bank in what’s clearly seen as their attempt to spread deceitful economic news against the current Sierra Leone Bio led government, evaded the fact that the contraction in net financial inflows from Foreign Direct Investment, Portfolio Investment and Remittances due to the pandemic have affected corporate and household financing and debt. Domestic sources of financing such as tax and none tax revenues which often accounts for a significant portion of the Sierra Leone government’s revenue were seriously affected by the pandemic due to business closures and capital flight from foreign investors who were already doing business in the country.

The International Monetary Fund and the African Development Bank analysis failed to capture that the supply and demand shocks caused by the COVID-19 pandemic directly impacted the revenues of the Sierra Leone government through reduce export earnings and lower domestic tax revenues. The hard, but uncomfortable truth is the collapse in both the demand for and price of the country’s main export commodity and other primary commodities which account for more than 60% of the Sierra Leone government revenues which are classified as resource-intensive economy means that the Bio led government do not have the required capacity to respond to the pandemic and have to rely on debt instruments.

Notwithstanding that, there’s room for recovery according to Trading Economics. In data published by Trading Economics, the country’s GDP is expected to reach $ 3.91 by the end of 2021. Trading Economics Global Macro Models and Analysts Expectations. In the long term, the Sierra Leone GDP is projected to trend around $4.10 billion in 2022 and $ 4.30 billion in 2023, according to their econometrics model. Source: https://tradingeconomics.com/sierra-leone/gdp

In light of the above analysis, one starts to question the disparity in information between the International Monetary Fund and the African Development Bank with those other analysts with particular reference to Trading Economics. A recent debt investment growth model developed by the African Development Bank in collaboration with the International Monetary Fund show the links between debt and investment in social and economic infrastructure given segmented labour market.

Considering the fact that the current Bio led government has committed a greater portion of its budgetary allocation to improve on the human capital of its people; which is associated with a favourable long-run effect on debt reflected in the growth and revenue gains. Investment in human capital is much more effective than investment in infrastructure in promoting long-run economic growth. Investment in human capital affects labour productivity with a long leg, which takes more than 15 years until output surpasses its counterpart in a programme that invests mainly in infrastructure.

Judging from the above perspective, the Bio led government has continued to invest in programmes that involved both human and physical capital which are found to have greater payoffs than programmes that invest exclusively in one because there are mutually reinforcing effects between the two types of investments. As a result, the debt stabilising effect might be higher. Furthermore, estimates in the 2020 Africa Economic outlook show that the efficiency of education spending is much lower in Africa at 58% per primary schooling. Growth returns to debt financing investment in terms of education are also found to be lower in Africa compared to other low or middle-income economies. This suggests that by merely improving the efficiency and returns on education the country can maximise public investment outcomes without increasing spending. For instance, according to the 2021 Africa Economic Outlook Studies, it shows that Africa could almost reach universal primary enrolment by closing the efficiency gap in education spending which the current Bio led SLPP government has embarked on. Source: Debt Dynamics and consequences; https://www.afdb.org/sites/default/files/2021/03/09/aeo_2021_-_chap2_-_en.pdf

The Kid from 105 Circular Road, Freetown, Sierra Leone, in Moscow on a mission

By

SLL

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July 28, 2021

by Lloyd Randall:

Intro

In November 2017, I arrived in Russia to embark on a journey that I will never forget. I was on a mission to do a documentary in 11 Russian cities in the space of 35 exhilarating days.

Growing up as a kid in Sierra Leone, I always looked forward to major sporting events, like the African Cup of Nations, the Olympics, the Euros, the football World Cup, Tennis Grand Slams and much more. I spent a lot of time watching these events, much to the chagrin of my dad, who felt I would be better off studying.

So when my boss asked me to go to Russia to do a documentary for the World Cup that was to be held there, I was ecstatic. My first taste of football’s biggest spectacle was in 1994 when, as a young kid, I watched the World Cup in the United States on TV.

It was love at first sight. And here I was, on my way to cover my first World Cup. The kid from Freetown who dreamed about watching the World Cup live was on his way.

Privet/kushe/你好- World Cup Trekker

I arrived in Moscow with a camera crew and a couple of producers on November 8^th, 2017. The aim of the documentary was to give African viewers a panoramic view of the preparations for the World Cup. The documentary, entitled ‘World Cup Trekker’, covered aspects such as Russian history, culture, cuisine and stadiums. It also provided vital information to fans travelling from Africa to support the five nations that had qualified for Russia 2018. Those countries were Nigeria, Senegal, Tunisia, Egypt and Morocco.

I travelled to Moscow, Nizhny Novgorod, Yekaterinburg, Samara, Sochi, Kaliningrad, Rostov-on-don, Volgograd, St Petersburg, Kazan and Saransk.

Kremlin, guns and chocolate

When I arrived in Moscow, I was immediately taken aback by the vast expanse of land, peppered with sprawling skyscrapers. I had imagined Moscow as an old, dilapidated city, crawling with spooky KGB spies. What I saw instead was a cosmopolitan city with high-end luxury stores and museums galore.

The highlight of my trip to Moscow was visiting Red Square, close to the Kremlin. The historical and political significance of Red Square is well documented. I had always felt Russia had only one Kremlin, but I soon realized there are Kremlins in other cities across the nation.

I was also a bit astonished that young Russians were more open-minded than I had envisaged. Many approached and spoke to me in an amiable manner using the little English they could muster. I had honestly expected a more frigid welcome.

My late uncle, who has two half-Russian daughters, and my elder sister both studied on scholarships in the former Soviet Union and they spoke of racist experiences they dealt with when they were there.

On a hectic day that also included visits to a famous chocolate factory, Moscow University and the Luzhniki Stadium, our last stop was a firing range.

Growing up in Sierra Leone during the civil war, the sound of gunfire always brings back some traumatic memories. My Chinese co-host opted for an AK47 and I settled for a crossbow. I am all too familiar with the sound of an AK47. It was all too familiar when I was growing up, so I settled for something less traumatic.

I had a fun time in Moscow and it definitely exceeded my expectations.

The Trauma of January 6

My trip to Volgograd was by far the most emotional. I am an avid student of history and a consumer of documentaries. I have read extensively about the battles that raged in Stalingrad (now Volgograd), as Hitler’s army, deploying blitzkrieg tactics, almost overran the Soviet Union. That could have led to a seismic shift in the outcome of the Second World War had the German forces prevailed. Stalingrad was the bulwark and ultimately, the demise of Hitler’s war machine commenced there. The loss of human life was colossal and unfathomable.

When I visited the Mamuyev Kurgan statue and saw the names of the deceased engraved on the marble walls, I broke down in tears.

As a kid, I witnessed several coups d’etat, a military junta, an interregnum and a bloody battle for my city, Freetown, that commenced on January 6^th, 1999. It is a day I’ll never forget. Many years after the war ended, I still woke up perspiring profusely from nightmares of the atrocities I had witnessed. I saw kids with their limbs hacked off by RUF rebels. Some were transported by wheelbarrows, as there was no other option.

I saw a kid no older than five with half her face blown off by fragments from an RPG. Inexplicably, even with her mouth completely shattered, she was still crying out for water. It’s an image I’ll never erase from my memory.

I saw a young man accused of being a rebel collaborator dig his own grave and be summarily executed by Nigerian soldiers serving with ECOMOG, a regional force brought in to stabilize the volatile situation. I had no idea why I was standing few feet away but I saw it happen.

I saw houses set ablaze and surrounded by rebels threatening to shoot anyone who tried to flee the burning structure.

I stood there helplessly as a rebel combatant slapped and threatened my mother inside our house. So the tears that flowed as I stood inside that monument came from a deep and troubled place. Cities like Stalingrad, Hiroshima, Freetown and Monrovia are reasons why humanity must never allow a third world war to ignite. It will be worse than Doomsday and Armageddon rolled into one.

Little Sierra Leone in big Russia

Samara will always hold a special place in my heart. I had an interview with the governor and asked him about the preparations for the World Cup and what African fans visiting his city should expect.

Samara was also the space capital of the Soviet Union and I was able to see the rocket piloted by Yuri Gagarin, the first man in space.

The reason why Samara will always be special to me is because I was pleasantly surprised to discover that the local football club, Kryila Sovetov, plays in the same colors as the Sierra Leonean flag. It was love at first sight and, needless to say, Kryila Sovetov gained a lifelong fan that day.

At the behest of the governor, I was an official guest at a Kryila Sovetov home game. With my face painted in green, white and blue, and surrounded by thousands of local fans in matching colors, it was definitely a day to remember.

The beauty of religious tolerance

In Kazan, I visited the Kremlin that has a mosque, the Kol Sharif, and a church, the Annunciation Cathedral, standing literally side by side. Such a sight is quite common where I grew up. It was a reminder that we can have different faiths and still coexist peacefully. Russian cuisine is quite different from Chinese or West African food, but I did enjoy my meals in Kazan. I tried horse meat for the first time, which reminded me of and made me miss my mother’s sumptuous spicy roast beef.

Russia’s Bai Bureh and Sengbe Pieh

Depending on whom you talk to, you may hear differing views about the Cossacks. Some view them as bellicose troublemakers, while others see them as battle-hardened warriors who can be relied upon when the going gets tough. Modern-day Russia came about as a result of many revolutions, wars and other upheavals. Throughout these politically challenging times, the Cossacks have always been in the thick of things. They are fearless warriors who also played a vital role in pushing back the German advance into the Soviet Union during the Second World War.

Throughout history, Sierra Leone has had its own fair share of fearless warriors. Men of valor, like Sengbeh Pieh, who led a revolt on board a Spanish ship carrying slaves in 1839. The revolt succeeded in taking over the ship and setting the other slaves free. This incident is known as the ‘Amistad rebellion’. Bai Bureh refused to pay tax to the British colonialists and launched a guerilla campaign against them when they ruled Sierra Leone in 1839. That conflict was dubbed the ‘ Hut Tax War’.

Another aspect of Cossack life that reminded me of my upbringing was the wooden houses I saw in the Cossack village. I felt completely at home because I grew up in a similar wooden structure.

A Black Sea and the Atlantic Ocean

Sochi is a reminder of how vast the Russian terrain is. I went from freezing just before I got on my flight to being able to walk around in a sweater when I got off the plane. This was November in Russia and Moscow was already covered in ice. Sochi has a different time zone as well.

Another interesting experience was going to the Fisht Mountain, in Sochi, which was covered in ice, and freezing. Once I left the mountain and headed to the city center, the temperature was mild again.

In Sochi, I visited the Winter Olympics museum, saw gloves of Russian goalkeeping great Lev Yashin, and then toured the city’s Formula 1 circuit. Sochi reminded me of my hometown Freetown, with its immaculate and picturesque coastline. Sochi is along the Black Sea and Freetown is along the Atlantic Ocean. If I were asked to choose a Russian city to live in, I would definitely choose Sochi without hesitation.

One foot in Europe and another in Asia

I was fortunate to visit all the host venues for the World Cup in 2018. Many of them were quite impressive and some were still under construction when I arrived in November 2017. Of the 12 venues, one really stood out because of its innovation and design.

To make room for more fans, architects at the stadium in Yekaterinburg had cut through the old structure and erected an external stand. They say a picture speaks a thousand words. That holds true in this case. Find a picture of the Yekaterinburg Arena and you will be blown away.

After my trip to the impressive stadium, I navigated my way to a museum displaying items from Ipatiev House. The last members of the Russian monarchy were executed at Ipatiev House in 1918 following the Bolshevik revolution. Replicas of the guns used to execute Emperor Nicholas II and his family are still on display at the museum.

Yekaterinburg is also special for something else. I was able to have one foot in Europe and another foot in Asia simultaneously. That was a pretty cool experience.

An exclave, amber and diamond (Kaliningrad)

I had never been to an exclave until I got to Kaliningrad. Kaliningrad is not within the boundaries of continental Russia but it is a Russian territory. Formerly part of Germany and known as Konigsberg, it was annexed by the Soviet Union after the Second World War, when the Postdam Agreement was signed in 1945 after the defeat of Nazi Germany.

Kaliningrad is renowned for amber, just as Sierra Leone is well known for its diamonds. I visited the amber markets when I was there. I have to confess that I am yet to visit the diamond-rich town of Kono, in my beloved Sierra Leone. I hope that when I do, I will find a diamond to make up for lost time. They say diamonds are forever.

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Solar Hotel, a Blatantly Fraudulent Land Deal

Nation

By

SLL

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July 28, 2021

by Mahmud Tim Kargbo
28th July 2021

Since Dr. Turad Sanusi was appointed as Sierra Leone’s Minister of Lands, the Ministry has engaged in ascertaining the illegal/irregular acquisition of land by Sierra Leone’s elites and businessmen to ascertain the types of land affected, the processes used to acquire land, and the profiles of the perpetrators, as well as to identify the victims and the impacts of land grabbing in the country’s economy. The action is drawn largely from what the Ministry see as “Unjust Enrichment: The Making of Land Grabbing Millionaires”, which focused on the illegal and/or irregular allocation of protected forest land, and land held by public corporations and parastatals.

Sierra Leone’s land questions in the Urban area is economically charged, and become increasingly urgent as pressure on land increases as a result of its growing population. In a country where majority of the population reside and get their livelihood source in the Urban area, yet few people have access to hectares of land, tensions over land simmer.

These tensions are exacerbated by two inextricably linked phenomena: the disappearance of large tracts of public land and the enormous wealth accumulated by elite members and businessmen of Sierra Leone’s society. When Dr. Turad Sanusi was appointed as Sierra Leone’s new Minister of Lands. He immediately set up systems and processes to look into land issues within the Urban area in the best interest of the state and revealed shocking trends of illegal and irregular public land allocations, and named many prominent individuals like Hisham Mackie who fraudulently acquired Solar Hotel at Aberdeen, companies, and organisations, both public and private, that had benefited from large scale land graft. An unconfirmed source states the Lands Ministry’s many findings and recommendations under Dr. Turad Sanusi have encountered much opposition from powerful vested interests and are yet to be fully implemented, and abuses of public land will continue.

Hisham Mackie, for instance, the Ministry of Lands questioned his freehold for Solar Hotel at Aberdeen because conditions of the Ministry for such agreement weren’t met. His initial lease agreement had no provision for freehold. Included in his lease agreement were buildings that were supposed to be demolished and similar structures erected to develop the 13 acres of land, which he failed to honour. The Ministry claimed the land at Solar Hotel using section 3 CAP 117 Crown Lands (Amendment) Act 1961 which states:

3. “Whenever the Director of Surveys and Lands shall be of opinion that any land is unoccupied land, it shall be lawful for him to cause such land to be marked out and a notice to be posted in some conspicuous part of such land, and such notice shall be in these words, viz.: “Claimed as Crown Land” and shall be signed by the Director of Surveys and Lands, and dated”.

The Sierra Leone Government holds government and trust land to be managed “in the public interest”. It is these categories of land that have borne the brunt of land grabbing, particularly (in the case of government land) land earmarked for urban development, land allocated to fulfil Ministry and state corporation/parastatal functions, and protected land, particularly forests.

These allocations involve processes that range from the questionable to the blatantly fraudulent or illegal; these processes depend on the type of land targeted. Recurring characteristics are the abuse of public office and the manipulation of legal processes to obtain or allocate public land for personal gain or to ensure political patronage. The most common processes involve the following:

Lease contract (which doesn’t set out an offer of freehold) being treated as saleable interests in land;

Illegal/irregular allocations and appropriations of alienated public land, including abuses of public office; allocation of high-value public land to private interests; parastatals acting as land brokers; direct sale of public land to private interests; and unpunished invasion and privatisation of public land;

Illegal and/or irregular excisions of protected forestland to private interests and for unauthorised uses.

These activities have been facilitated by the highly centralised nature of Sierra Leone’s land administration and management system, initially introduced by the colonial administration. Under this framework, land grabbing has proliferated as a form of political patronage. It has a wide range of beneficiaries, including national and international private interests (companies and individuals) etc., while those facilitating grabs of public land have accumulated massive personal wealth at the expense of the state.

The impacts of land grabbing by Sierra Leone’s elites and businessmen have yet to be fully quantified; however, to put the problem into financial context, many experts estimate the public losses incurred for parastatal land and protected forestland to be billions of Leones. However, the effects are long term and include degradation of (protected) national resources, speculation on land prices, increased rents, landlessness, and missed development opportunities.

Progress towards addressing Sierra Leone’s land-grabbing problem and its negative impacts are seriously on the way, as the new Lands Minister and his team are presently reclaiming all state land with signboards displaying “Claimed As State Land under section 3 of CAP 117” National stakeholders must endorse in principle to the new efforts of the Lands Minister and his team in reclaiming all state land, which will be central in forming the structures needed to remedy land administration problems, including land grabbing.

SIERRA LEONE: ECONOMY DESCENDING DOWN THE ABYSS

Economy

By

SLL

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June 23, 2021

The economy plays a very significant role in the global political standing of nations. Indeed, politics is played on the basis of the economy or precisely for the achievement of economic objectives. In the definition of a good economy of any country or major power, there are some determining factors, which must be kept in view. These factors include; “Are there jobs for everyone who wants one? Can working people afford decent housing and adequate medical care on their salaries? Is the currency maintaining its value so that people can save for their retirement? Are taxes both low and equitable? Are usurious interest rates forbidden? Is the gap between the rich and the poor shrinking instead of expanding?

Unfortunately, in the case of Sierra Leone, most of the factors, which determine good economic health are poorly addressed. The most discouraging factor is the poor Human Development Index (HDI), which remain low and consistently low for three years now. The human development report yearly issued by United Nations Development Programme (UNDP) shows Sierra Leone at a lower level; 182 out of 189, countries recorded for the calculation of the Human Development Index. According to the Afro barometer: in the past three years, 82% of Sierra Leoneans consider their present economic and living standard to be very bad. A large percentage of Sierra Leoneans rated the current government performance in managing the economy, improving the living standards of the poor, creating jobs, keeping prices down and narrowing income gaps between the rich and the poor as very bad.

The overall direction of the country; 80% of Sierra Leoneans say the country is heading in the wrong direction. This is really bad and indeed has fallen over the past three years, particularly under Julius Maada Bio’s government. Human Development Index ranked countries based on their social and economic development. It has four criteria; life expectancy at birth, means years of schooling, expected years of schooling and gross national income per capita. In fact, “ HDI makes it possible to track changes in development levels over time and to compare development levels in different countries.”
Besides, for the past three years, there has been a low income rate in Sierra Leone. There have been shortages of checks and balances, basic health and education facilities and very low employment opportunities. The government has been depending on borrowing from the banks, excessive printing of currency notes and then heavy loans from World Bank/IMF, China etc; Sierra Leone Economic Outlook. The loans have increased manyfold and the return or output is almost nil. The areas which really need attention, like having small dams and water reservoirs, poverty eradication, social justice, law and order were ignored, whereas, some of the projects which benefit few only were launched excessively. Indeed, in the past three years, there has been an imbalance in the socio-economic necessities and governmental priorities, which benefited few, rather than the State and society of Sierra Leone.

Besides the factors mentioned above, it is worth mentioning that, inflation is the greatest factor, which has significantly contributed towards the poverty in Sierra Leone over the past three years. Inflation can best be explained; the rate at which, the general prices of the goods and services rises and consequently the purchasing power of the currency falls. In the developed world, the central banks try to limit inflation to avoid deflation for a smooth economic running.
Unfortunately, in Sierra Leone, there have been fewer efforts from the government and even the State Bank for controlling the inflation in the country. “The last three years of Sierra Leone’s economy were regarded as highly inflationary periods due to expansionary monetary policies” This indeed is a major hurdle in the way of development of Sierra Leone’s economy.

A major cause for the high inflation in Sierra Leone is the “excess printing of banknotes which some alleged is to hoard international hard currencies to be deposited into foreign accounts of some corrupt officials in social positions of trust, high prices of raw materials and finished products, high taxes, as well as direct corrupt practices that result in the price level increases.” Under the heavy flood of inflation, the overall economic growth and financial sectors of Sierra Leone have suffered badly, which ultimately exposed the people to poverty and the poor can be easily exploited.
But, the most distressing factor that comes out of Inflation is an element of uncertainty, which further cause ambiguity among investors. That is why; rather than attracting, foreign direct investment (FDI) in Sierra Leone, the local Sierra Leonean investors left the country for investment elsewhere. This largely mismanaged system of economic development can be controlled through measures like; providing security to local investors, encouraging domestic products, rather than supporting imports.

This dismal state of Sierra Leone economy or economic priorities can be put right through strategic planning, national thinking and indeed, after relegating the personal interests of the affluent class, who have made the national economy and vast human resource its hostage. These are few families, but very powerful and among the decision-makers at the national level. The question arises, would they ever make decisions for the state of Sierra Leone and for its questionable 7 million people too?. The media, academia, the scholars and indeed the civil society have to play their part to emphasise to the ruling class for national thinking and setting correct economic priorities for Sierra Leone.

ACC CONCLUDES PROBE INTO ISSUES RELATING TO PAYMENTS TO AND EXPENDITURE OF PUBLIC FUNDS BY THE “OFFICE OF THE FIRST LADY OF SIERRA LEONE”

By

SLL

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June 22, 2021

The Public may recall that on 9th February, 2021, the Anti-Corruption Commission (ACC), in a Press Release confirmed that it had commenced probe into the Office of the First Lady, in regard the payments to and expenditures of public funds by the said Office following allegations of illegal access to Public Funds by holders of the said Conventional Office in Sierra Leone in recent years, including the Current First Lady.

The Commission wishes to inform the general public that it has concluded the probe and hereby confirms the following:

1. Firstly, the conclusions of the probe established that the Office of the First Lady is not established by any specific law, but has been recognized and accepted as a Conventional Office within the governance architecture of Sierra Leone and had accordingly been accorded avenues to access Public funds, including travel per diems, projects and official responsibilities like State Dinners and entertainment for over 20 years. This is established by the fact that the Accountant-General’s Department confirmed resource allocations to the said office and its accounts and expenditure were duly audited in 2019 by the Audit Service Sierra Leone as part of the audit process for Ministries, Departments and Agencies of State.

2. That our records confirm that Billions of Leones had been received by the said office for travel, medical and other attendant costs in each of the past 14 years and that the travels were verified and confirmed to have been within the established government policy of access to the said funds.

3. That the Office of the First Lady had been engaged in charity works and the provision of targeted supports to the various occupants of the Office of the President with regard identified and specific projects for the past 14 years; and Public funds were used to effect those supports and projects, including the “Women’s Initiative for Safer Health” (WISH) bed nets projects by First Lady Mrs. Sia Nyama Koroma with support from the Ministry of Social Welfare, Gender and Children’s Affairs, and the “Hands Off Our Girls” Campaign by First Lady Mrs. Fatima Bio with support from the Ministry of Gender and Children’s Affairs.

4. With respect to specific payments made to First Lady Mrs. Fatima Bio, the Commission confirms that it was done in compliance with Section 39 of the Public Financial Management Act, 2016; that gives the State, authority to expend State funds to unallocated head of expenditure to a certain threshold, to “necessary” public cause(s) in the interest of the Public and that the said allocations were confirmed to be the exercise of the discretion provided by law to the Minister of Finance.

5. That other issues of expenditure, including prudential financial management, procurement issues, the interface between charitable donations to the said office with public funds, etc. will be dealt with within the framework of the Auditor-General’s Report 2019 and, we will be giving due deference to those recommendations and act on them accordingly.

Based on the above and upon analyzing the records of accounts, official approval documents and the legal and regulatory framework concerning payments made to the Office of the First Lady since 2007 to date, we hereby confirm that there is not, at this stage, any criminal responsibility in the process of payments to, and expenditures relating to, the Office of the First Lady; and the probe has been accordingly closed by the ACC while the issues pertaining to the audit recommendation have been referred to the Prevention Department of the Commission for follow-up on the compliance by the Office of the First Lady with the Audit recommendations and other related Prevention work in that regard.

The Commission wishes to thank the Public for their interest and support and reassures the public of its commitment to protecting public funds and to address all levels of corruption throughout Sierra Leone.

For further enquiries on this and other ACC matters, please contact MARGARET MURRAY, Public Relations Officer on +232-78-832131 or via emailinfo@anticorruption.gov.sl.

Selfish Politics is not a new problem in Sierra Leone

By

SLL

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June 22, 2021

by Mahmud Tim Kargbo
22 June 2021

The pattern of routine partisanship and factionalism, and, as a result, of all other vicious practices had arisen…It was the result of peace and an abundance of those things that mortals consider most important. I say this, because, before the destruction of our land in the past war no mutual consideration and restraint between the people and the governing elites characterised the government…

Fear of homegrown enmity preserved bad political practices. And when that fear was more than harboured on their minds, self-indulgence and arrogance, attitudes that prosperity hates, took over. As a result, the tranquillity they had longed for in difficult times proved, when they got it, to be more cruel and bitter than adversity…every man acted on his own behalf, stealing, robbing, plundering. In this way, all political life was torn apart between two parties in Sierra Leone (SLPP and APC), and our political system, which should have been our common ground, was mutilated…And so, joined with power, greed without moderation or measure invaded, polluted, and devastated everything, considered nothing valuable or sacred until it brought about its own collapse.

The preservation of the means of knowledge among the lowest ranks is of more importance to the public than all the property of all the rich men in the country.
Always consider the settlement of Sierra Leone with reverence and wonder, as the opening of a grand scene and design in providence, for the illumination of the ignorant and the emancipation of the slavish part of mankind all over the earth.
The poor people, it is true, have been much less successful than the great. They have seldom found either leisure or opportunity to form a union and exert their strength; ignorant as they were of arts and letters, they have seldom been able to frame and support a regular opposition. This, however, has been known by the great to be the temper of mankind; and they have accordingly laboured, in all ages, to wrest from the populace, as they are contemptuously called, the knowledge of their rights and wrongs, and the power to assert the former or redress the latter. I say RIGHTS, for such they have, undoubtedly, antecedent to all governments in Sierra Leone, — Rights, that cannot be repealed or restrained by human laws — Rights, derived from the great Legislator of the universe.
Liberty must at all hazards be supported. We have a right to it, derived from our Maker. But if we had not, our fathers (Bai Bureh and co) have earned and bought it for us, at the expense of their ease, their estates, their pleasure, and their blood.
Liberty cannot be preserved without a general knowledge among the people, who have a right, from the frame of their nature to knowledge, as their great Creator, who does nothing in vain, has given them understandings, and a desire to know; but besides this, they have a right, an indisputable, unalienable, indefeasible, divine right to that most dreaded and envied kind of knowledge, I mean, of the characters and conduct of their rulers. Rulers are no more than attorneys, agents, and trustees, of the people; and if the cause, the interest, and trust, is insidiously betrayed, or wantonly trifled away, the people have a right to revoke the authority that they themselves have deputed, and to constitute other and better agents, attorneys and trustees.
The jaws of power are always open to devour, and her arm is always stretched out, if possible, to destroy the freedom of thinking, speaking, and writing.
Be not intimidated, therefore, by any terrors, from publishing with the utmost freedom, whatever can be warranted by the laws of our country; nor suffer yourselves to be wheedled out of your liberties by any pretences of politeness, delicacy, or decency. These, as they are often used, are but three different names for hypocrisy, chicanery, and cowardice.
Let us tenderly and kindly cherish, therefore, the means of knowledge. Let us dare to read, think, speak, and write.
Let every sluice of knowledge be opened and set a-flowing.
Let us see delineated before us the true map of man. Let us hear the dignity of his nature, and the noble rank he holds among the works of God—that consenting to political slavery or oppression is a sacrilegious breach of trust, as offensive in the sight of God as it is derogatory from our own honour or interest or happiness.

Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide. It is in vain to say that democracy is less vain, less proud, less selfish, less ambitious, or less avaricious than aristocracy or monarchy. It is not true, in fact, and nowhere appears in history. Those passions are the same in all men, under all forms of simple government, and when unchecked, produce the same effects of fraud, violence, and cruelty.

I pray Heaven to bestow the best of blessings on this President and all that shall hereafter inhabit it. May none but honest and wise men ever rule us in this land.

Criminal Damage to Energy Ministry’s Property in Sierra Leone

By

SLL

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June 8, 2021

by Mahmud Tim Kargbo
8th June 2021

Energy Minister addressing the press at IMAAT sub-station — Minister of Energy

While agreeing to hear genuine complaints on how to improve energy in the country to effectively address electricity challenges especially in new areas with massive housing construction, illegal connections, unfit electrical cables and postpaid electrical meters, a Ministry of Energy team headed by Hon. Alhaji Kanja Sesay on Monday expressed displeasure over the intentional and malicious destruction of or damage to the property of the Ministry of Energy.

Such intentional destruction of the Ministry’s assets to cause power outage in the affected areas (Leicester Peak, Mayemi, Orogu etc) can be popularly referred to as vandalism. It includes behaviour such as the destruction of the Direct Current Distribution Board, destruction of the Mini-mature Circuit Breakers, slashing main cables that are distributing energy out to the public for utilisation, destruction of feeders made with aluminium and copper etc. Speaking to the team as they were doing their inspection, a community member at Orugu described the act as “outright vandalism which may reflect personal ill will and bad politics, although the perpetrators need not know their victim to commit such unpatriotic act. One thing is very clear, the recklessness of the act imputes both intent and malice”. He added, “ those engage in such unpatriotic actions understands that the destruction of public and private property poses a threat to society which has the tendency to undermine the government from realising it social contract mandate with its people”.

At the Regent 110 Voltage IMAAT sub-station, which distributes energy for communities at Charlotte, Fourah Bay College, Embassy of the United States of America in Sierra Leone, SS Camp, and Leicester Peak communities, despite the presence of an armed guard and a private Security Farm personnel whose Farm was hired by the Ministry of Energy to protect their assets in the said area, thieves entered the building and destroyed the Direct Current Distribution Board in the 33 Kilo Voltage sub-station that’s distributing electricity in the mentioned area. This sub-station covers a vast area with hundreds or thousands of people to suffer if there’s a power outage. The cost of the destroyed items is Le 1,850,000. The stolen items aren’t expensive and such an act exhibits nothing, but deliberate sabotage to the energy supply. We were reliably informed that six staffs and one security personnel are currently under investigation.

At Mayemi and Orugu communities, the Hon. Minister of Energy single-handedly unearthed scores of wrong tariffs and illegal electricity connections done mostly by people who just buy electrical items and hired quack electricians to do their installations. These illegal connections often put unnecessary pressure on the transformer with overloaded energy and can lead to poor service delivery or transformer blow-off. Wrong tariffs can also drastically reduce the revenue generation of the Ministry of Energy which in turn can reduce its efficiency in terms of service delivery to the public. Journalists and the team of the Hon. Minister of Energy for the second time at Mayemi Community, also saw firsthand the slashing of main electrical cables that are distributing energy to the community. This happened despite the Hon. Minister getting assurances from the community Chairlady that they will help protect the sub-station to prevent a recurrence of the first destruction.

MINORITY LEADER (CHERICOCO) ASKED ECOWAS TO BE PROACTIVE IN SIERRA LEONE

By

SLL

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June 7, 2021

by Mahmud Tim Kargbo
7th June 2021

Making Sierra Leonean lives really matter involves ECOWAS looking deeply at the systemic and institutional oppression that is built into every aspect of Sierra Leone’s constitution. Sierra Leone is a nation founded on a document that includes all nationals. Sierra Leone is not a nation founded on nepotism or regionalism. These deeply embedded ideas need to be addressed at fundamental levels as well as within Sierra Leone’s local communities and interpersonal relationships.

Sierra Leone also needs to center bad politicians, and their experiences of reproductive nepotism, tribalism, violence, corruption and other division among the people. As a nation, we cannot address violence and other injustices in the systems around us without also addressing the most personal forms of violence that are perpetrated on nationals orchestrated by politicians.

To do this, we need to make sure that all voices are heard, and that Sierra Leoneans from every walk of life are at the table, along with a full array of representatives from every other ethnic group. We need to take care to listen to the experiences and concerns from as wide a variety of people as possible (centering the voices of responsible politicians, and other right-minded individuals) so that we don’t put small bandaids on big problems and create more unintended consequences. These full, robust conversations, although they may take more time, can lead us to re-imagining equitable communities where everyone can stand in their inherent value as human beings to move Sierra Leone forward in a number of positive ways.

This was why Sierra Leone’s Minority Leader in Parliament Hon. Chernor Ramadan Maju Bah called on ECOWAS to be proactive in Sierra Leone instead of being reactive. From his statement to the regional body, Hon. Chernor RM Bah would like to see the development of opportunities for diverse groups of people to meet in small groups in order to learn about the thoughts, feelings, and concerns of one another as per our country’s constitution. Kind of consciousness-raising groups of 2002 that ended our eleven years civil war. Or like the previous interfaith gatherings, where people of different religions get together in order to break down barriers and learn about each other to positively move the country forward during our bloody civil war.

A lot of people, myself included, no longer see these people in their lives who are from different ethnic groups coming together in the interest of the country. Many don’t see how we are going to be able to work together on important societal issues if we are unable to break down the prejudices and preconceptions that are held not only by bad politicians and their stooges but stakeholders of different tribes throughout the country. It is important to read books in order to educate ourselves, but we need to have relationships in order to learn at a deeper level.

We have been seeing articles, hearing audios and seeing videos where politicians and other stakeholders are making incitement generalisations, speaking about them as if they are all or mostly tribalistic and/or ignorant about Sierra Leone history and issues of concern to Sierra Leone people. Many hope that people from the North, South, East and West can look at other people as individuals in the same country, just as they are wanting others to do with them, and not make assumptions about each other attitudes and beliefs and level of knowledge.

Many feel that we are in a situation where people are ready to jump on one another for not living up to a certain standard of awareness and/or for not knowing exactly the “correct” words to use in speaking about these issues. It doesn’t foster conversation and connection if one is concerned about being accused of “virtue signalling” or any of a number of other ways to label the words of political rivals who are trying to learn and connect. We are going to make mistakes. Many hope that there can be ways to have open, honest, and respectful conversations that deepen understanding of one another and create connections instead of continuing what feels like a “standoff” at times, where longstanding polarisation is continued.

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