Sierra Leone: 2012 Elections and the Economy

It’s past midterm in Sierra Leone and thank God there are no midterm elections in these parts.  What Sierra Leone does have, however, are cabinet reshuffles.  In this present regime there have been many removals of ministers and replacements.  In some ministries, the minister has been removed and not replaced.  In Sierra Leone, many people equate elections with huge shifts, which determine if life gets better or worse.  But the truth is, the election, in itself, is not the trigger for change.  It is one of many events that determine the way we go.

The economy has grown marginally, but it has grown.  Nonetheless, the people still suffer, lack, and are deprived.  And the nation remains at the bottom of many indexes on human development.  These will not be fixed by the election.  Regardless of whether APC, SLPP, PMDC or other party wins, there will still be issues that will not be repaired simply by a political election. It is unlikely that these issues will worsen either simply because the election has taken place.

In a few months, Sierra Leone will clock 50 years of independence as a nation.  The economy of the nation did not evolve overnight, and cannot metamorphose overnight. GST and other taxes, inflation, jobs, corporate governance, financial institutions and regulation and business confidence are big issues with the national economy which cannot be sorted by a ballot box.

As we stand, the 2012 elections could go either way(s).  We witnessed an unprecedented hung parliament in Britain, Germany and Finland this year, voting patterns which forced ruling parties into coalitions of unlikely partners. The political parties in Sierra Leone have not displayed much ideological difference, and their economic and social policies remain very similar, mostly driven by donor benevolence.  Major characteristics of past and present governments remain big-government coupled with wealth-equalization, but juxtaposed by high taxes complicated by the corruption index.  At the end of the day, one party will win and that will guide us in a specific direction. The only control we have is with our vote. Once cast, we must accept the results, no matter the outcome.

In Sierra Leone, if the economy will not be fixed by an election that can go in any direction, investors need a strategy that can adapt to any result and which looks at the big picture. Sierra Leone’s economy will eventually improve regardless of which party wins.  The single sticky factor remains the time span for economic improvement, which could differ depending on the policies of the party in power.

Investors should now be thinking about the long term economy and Sierra Leone market, rather than looking to reap short term results.  This means that long term investors will be more resilient to the volatility in markets like Sierra Leone.

We are not encouraging people to forget about the elections, which seems to be consuming the political class and sending them into mini-frenzies.  We are encouraging people to vote with their heads, as well as plan for the long term since the election result can go in any direction and does not necessarily determine the direction of economic improvement.

By Thompson Jallow, Conakry

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