Sierra Leone and Poverty

A reminder to President Koroma to run the nation like a business entity

Sierra Leone, like most other African countries, is poor because that is the path its people and leaders have chosen.  The governance strategy of the current and previous Sierra Leonean governments has been more of expenditure and consumption with no revenue/profit generating objective. The misconceived objective of this strategy has been to maintain a low standard of living for its people. What this does is to entrap the nation into perpetual subsistence living, dependency, and poverty.  The essence of government is to maximize the welfare of its people and this can only be achieved if the government creates the enabling environment for its people to create wealth, then the people can save, coalesce their savings into investments, then industries can be opened and then jobs can be created and more wealth created and more savings will take place and more investments, and the circle continues.

The only way this can be done is when government conducts the affairs of the state like that of running a company.  Like the management of a company, government’s objective must be revenue related, then it can have the money to better run the affairs of the state.  It is not the business of government to provide food and comfort to the people, as it has now engaged itself (welfare state). Its onus is to create the environment for service providers to thrive. Then the people can have jobs and pay their bills.

But presently Sierra Leone like most nations has over-stepped its responsibility into a domain that will perpetually keep its people in poverty. This has caused the government’s administrative and service providing cost overwhelmingly outweighing its operating income.  What this does it to perpetually keep the government in deficit and it will have to depend on donor funding each year to partly fill the gap. The government therefore creates no surplus, and its people are left only to cater for their living. NO SURPLUS AND therefore no investment potentials, then comes the dire need for foreign investment.

And to attract foreign investment you have to create the environment so that the investor can have much profit margin because that is the only reason/motivation for him to disinvest in his current venture to come and reinvest in your country.  And the two determining factors that will create more profit margin for foreign investors is when cost of productions is kept low, and secondly the market factor, how big is your economic market as a nation.

Now let us take these factors singularly-

KEEPING COST OF PRODUCTION LOW – Three factors determine this, availability of raw material, manufacturing related cost, particularly energy, and thirdly availability of human resource. Basic literacy is not enough. There must be sufficient specialize human resource otherwise its purchase from a foreign or international market is expensive.

Now, in Sierra Leone these are all lacking. We don’t produce much raw material, that is why we need to industrialize agriculture then we can grow much of the raw materials. secondly, our energy generation is poor and no incentive to lure investment. and thirdly, Sierra Leone’s educational system is more literacy based than specialized training. this is why most of the high paid jobs are held by foreigners in Sierra Leone.

NOW WITH THE MARKET FACTOR – Now this is determined by two factors;
the population size of Sierra Leone and the income and spending power of the people. The size of our population is relatively small, therefore it means our market is small, so we basically will need to do two things. I call them the “two substitutions” Import and export substitutions.

Import substitution – this is done by favouring both domestic industries and consumption of domestic goods over foreign goods, which means the government will have to institute measures that will discourage the importation of foreign goods to a greater extent. This can be in the form of high tariffs on the importation of foreign goods, or subsidizing local industries. Cheap foreign goods have killed and is killing our local industries because our local industries can’t compete with their low prices.

Export substitution – This replaces our imports with exports. The government will have to introduce export promotion strategies, for example, maintaining an exchange rate that is favourable enough to permit exports to compete with products manufactured in developed countries.  Japan and China are striking examples of this strategy, the yen and yuan are artificially kept at low value because cheap yen and yuan means inexpensive Japanese and Chinese goods respectively.  Recently Hong Kong, Taiwan, Malaysia, Singapore and other Asian countries have adopted such policy.

As a nation we MUST start thinking ‘BUSINESS’ otherwise we will perpetually remain poor like we have always been.

It is against this backdrop that I said President Koroma sometimes, whether deliberately or by slip of tongue, says is the solution to Sierra Leone’s problems but he just lacks the strategies to implement them.  When he was campaigning in 2007 he said he was going to run Sierra Leone like a business entity but I can assure him that he has not done so in the slightest sense because if he were to run his private RITCORP INSURANCE COMPANY  (he owns an insurance company in Sierra Leone) the way he is running the business of governance in Sierra Leone, the company would have been declared bankrupt, because as a nation we are not making serious gains at all. All what he calls gains are not gains, they are natural phenomenons that he contributed nothing to bring about. Our minerals are natural endowments and what I personally would want to see is not that we have gotten more money from our mineral revenue, but how he has utilized that yield to create wealth for the nation.

Another disturbing factor is that most of our government’s ministries, departments and agencies have no income generating objective. They are mainly liabilities providing services without bringing in revenue. This just adds to the mess because they all increase government administration overhead cost. We are not using the nation’s resources and time prudently. Most of our activity drivers are politically motivated instead of on revenue generation basis.

I want to take this opportunity to remind President Koroma that he promised us Sierra Leoneans he would run the country like a business entity, but so far, the way he is running Sierra Leone is not the way business entities are run.

Mr. President, you are on record, posterity will judge whatever you are doing. But let me hasten to congratulate you though that comparatively you are not doing badly like your predecessors, but because we can do better that is why I am not well pleased with you as a Sierra Leonean.

If you do the right thing most of us have no reason to stay in developed countries for long; our business will only be to seek education or for short visits and return home to build our country for our posterity.

Paunga Marnoh-Sesay

Stay with Sierra Express Media, for your trusted place in news!

© 2013, https:. All rights reserved.