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Insight 1 2017

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Insight - it's the only magazine for those who do business in Sierra Leone. In this issue Sierra Leone's Minister of Finance talks exclusively about tough economic decisions; we profile creative entrepreneurship as exemplified by the Senesie siblings and take a look at the remaking of the Freetown Port. Plus lots more.

Change Maker CONTINUED

Change Maker CONTINUED “Third, as a result of the low fuel prices in Sierra Leone, there was significant amount of smuggling of fuel into neighbouring countries. In other words, Sierra Leonean tax payers were subsidising consumers in neighbouring countries with all the associated consequences including pressure on our limited foreign exchange to import fuel. Therefore, we took the decision to eliminate the subsidy and raise additional revenues that will be spent on key social programmes such as school feeding, free health care, youth employment programmes and public transportation.” He was head hunted by the late Dr Jim Funna to join the National Authorising Office. It was the era of the Integrated Agricultural Development Project – assisting the Government to implement integrated rural development through oil palm, as well as rice and cocoa production and processing, and forestry projects. “We need to go back and examine these projects. They were targeting production but here we are, still importing rice,” he expresses his frustration. “Aid to Sierra Leone has not been successful. One of the reasons is that we have overlooked the systems, processes and human capacity needed to sustain the benefits.” He is similarly unequivocal about decisive cuts made to non-essential spending by government ministries, departments and agencies, a move which included the suspension of all domestic financing of capital projects and the majority of suppliers’ contracts; no procurement of new Government vehicles until further notice; no purchase of new office furniture and fittings; a 50 percent cut in fuel allocations to all MDAs; a 50 percent cut in monthly office expenditure; 70 percent of all payments to suppliers/contractors that have foreign components to be effected in Leones; a 50 percent cut in allowances for local travel; no purchase of office equipment (computers, printers and photocopiers); restrictions on all overseas travel and delegation sizes; no top-up allowance for sponsored international travels; and all seminars, retreats and workshops to be held in office facilities. He shakes his head as he emphasises these decisions were driven by the need to address the two major shocks suffered by Sierra Leone’s economy - the Ebola epidemic and collapse of iron ore prices and associated loss of production in 2014-2015. “Of course these costcutting measures are unpopular, but they were implemented in order to address the potentially looming f iscal crisis and to restore f inancial sustainability. In the medium to long term, they will yield tremendous benef its,” he says. While he believes that policy decisions should not be determined by public popularity, he believes in sharing information and is clear that public consultation plays a vital role in governance. “Consultation is a part of accountability and transparency, but also ensures that even difficult decisions are understood as being part of a broader effort to improve economic conditions in the long-run. As such, MOFED is committed to openness and to discussing its policy decisions with the Sierra Leonean public through the media.” His approach to sharing economic understanding may well be influenced by his own experience of reading economics at Rutgers University in the United States. He says the subject “opened the world up for him”. It was through Tunde Savage - a close school friend, that he found himself in America. When Tunde left for the States to continue his education, he insisted that the young Momodu follow him, guiding him through the admissions process and applying for the necessary immigration paperwork. At the same time, his mother worked doubly hard to raise the money for her son’s airfare, scrimping and saving. “She joined every Osusu going,” he laughs. From 2007 to 2014 he was Sierra Leone’s Deputy Minister of Finance, where he oversaw expenditure related matters. From there he went to the Central Bank as Governor before returning to MOFED, this time as Minister. “Sierra Leone is a contradiction,” he says. “It has always been well off. We have resources in excess, but we have unable to maximise our assets.” It’s a pragmatic view of Sierra Leone’s economy, which is tempered by his confidence in a structural approach to creating a stable economic platform. In his 2017 budget speech, he outlined a strategy of economic diversification to promote inclusive growth; addressing infrastructure bottlenecks; and supporting Sierra Leonean enterprises as the ultimate drivers of growth and shared prosperity. “To deliver these objectives,” he says. “The Ministry is supporting key initiatives related to improving productivity in agriculture, fisheries and tourism, and strongly building up the “Made in Sierra Leone” brand to support local production.” The “Made in Sierra Leone” campaign is aimed at creating jobs by reducing the country’s reliance on imports that can be easily produced in Sierra Leone. It aims to promote SME development, improve access to finance, improve the business environment, and improve adherence to the Local Content Act, 2015. “Creating more and better quality jobs should be at the heart of government policies aimed at economic sustainability, not only to create growth, but to reduce poverty and increase social cohesion. Job creation is the greatest social intervention, I believe we can have,” he says. He firmly supports the development of infrastructure such as roads, energy and water supply systems as a strand of economic growth, and continues to direct resources towards these projects. Social protection also falls within his definition of necessity and he has integrated the needs of vulnerable groups into national economic planning. He believes that investing in children, poor households and the vulnerable is a moral imperative and essential to achieving internationally-agreed development goals—but it is also sound economics. “Investing in the young and poor is necessary to raise productivity and human capital as well as expand domestic markets and generate inclusive and sustainable growth,” he says, and in the November 2016 Budget, he committed to maintain or expand existing programmes to support tuition fees, examination fees, free health care, and the provision of seeds, seedlings and fertiliser to farmers. He has been equally committed to funding the newly introduced national school feeding programme which provides free school meals for 1.2 million primary school children. FT Insight 9 It was at university he met his wife-to-be - Jennifer Miller – a fellow Sierra Leonean student. They progressed through the rigour of Rutgers academic environment together. With no scholarship, student loan or grant, they paid their fees by working several jobs at a time. Momodu Kargbo followed his first degree with a post graduate qualification in agricultural economics, which combined his practical love of agriculture with his interest in economics. “I’m happy I did it,” he remembers. “It opened up my mind to the potential of agriculture in Sierra Leone.” He proceeded to join his wife in completing a Masters in Business Administration. The couple returned home immediately after they had completed their studies, unlike many of their peer group. Once back, he started working for the now defunct National Development Bank as a project officer. www.ftinsight.net

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