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Bio inherits empty state coffers

Analysis

Bio inherits empty state coffers

The March polls delivered the government the people yearned for and saw the former opposition leader, Julius Maada Bio, elected as President. But he inherits an economy with many challenges, including dramatic levels of external and domestic debt. Can he pull the fat out of the fire? Desmond Davies discusses.

For the whole of March, Sierra Leoneans were on tenterhooks as the country went to the polls to elect local councillors, MPs and the President. During the first round on 7 March, none of the 16 presidential candidates garnered the 55% of the vote necessary to get the position. 

So, on 31 March, Samura Kamara, representing the ruling All People’s Congress (APC), and Julius Maada Bio of the main opposition Sierra Leone People’s Party (SLPP), the top two contestants, locked horns again for the presidency.

To all intents and purposes, it was supposed to be a smooth affair. But the APC had other ideas. Rattled by the strong showing by Bio, the APC began to make moves to stall the inevitable defeat that it was facing. First, the party managed to get a court order to halt the run-off, which was legally set for two weeks after the first round. The party claimed there were irregularities and the stuffing of ballot boxes. 

Eventually 31 March was set for the second round, with the National Electoral Commission standing its ground despite pressure from the ruling party and its supporters. Bio was eventually declared the winner although the APC continued to complain about electoral illegality.

But even at that, the party got it wrong.

Challenging the presidential result could only happen after the second round and after a winner had been announced – not before. 

The claim by the APC of ballot box stuffing would have been risible had it not been for the heightened political temperature in the country.

Although the APC has lost the presidency, it has maintained its control of the 132-seat parliament, with 63 MPs, which could rise or fall, as there are outstanding petitions to be resolved. The SLPP came second with 43 seats. Two new parties, the Grand National Coalition and the Coalition for Change and a smattering of independents make up the rest of parliament.

How Bio and his SLPP government deal with this situation will make for an interesting period of democracy in Sierra Leone. Will the APC frustrate the government’s programmes? Will the party look for opportunities to remove Bio from power constitutionally? This, though, will depend on the mood of the Sierra Leonean people, who voted decisively for change.

Overpowering clutch of electorate

For once the electorate stood up to the APC, watching its every step during the elections, to ensure that it did not get up to its old tricks.   

The knee-jerk reaction from the APC was one of surprise. Why would there be such a universal backlash to a party whose supporters thought it was doing well?

It was on the economy – or financial corruption – that the APC failed to win the presidency. Those in power are alleged to have raided state coffers with impunity.

The politicians faced a long list of accusations. They are being accused of ‘stealing’ from the national fund as well as money donated by the international community to combat the Ebola outbreak four years ago, as well as appropriating funds sent to help those affected by the mudslide in Freetown that left hundreds of people dead; it is also alleged that they sold air tickets in the open market – which Saudi Arabia had donated to help indigent Muslims make the pilgrimage to Mecca.

The current position is that Bio’s new government is facing a calamitous economic situation: an external debt of $2bn and domestic debt of Le4.9tn ($636m). “In addition, the health of the banking system is significantly challenged by the financial condition of two state-owned banks that have huge non-performing loans [NPLs],” Bio said in Freetown last month during a meeting with the IMF.

“This, coupled with low levels of economic growth, a high incidence of poverty, lack of economic diversification, high unemployment and [a] challenging business environment for private sector development, has further exacerbated the problems.”

Non-performing loans, indeed. These run into trillions of Leones and it will be up to the government to recoup these in the interest of the people. It will also have to investigate further in the case of the missing $23m of pension contributions made by ordinary Sierra Leoneans.

Bio noted: “Initial assessment by the Governance Transition Team reveals that my administration will be faced with the worst economic situation since independence. Before now, government could not pay monthly salaries without borrowing or heavy reliance on an overdraft facility at the Bank of Sierra Leone, which now stands
at over Le160bn.”

Restoring sanity

But there is already some good news on the economic horizon, according to Bio. “For the first time in two years, government will pay salaries of Le150bn including [pension] contributions without recourse to domestic borrowing,” he said.

Bio wants revenue collection to contribute at least 20% to GDP. In this regard, the new government has suspended all import duty waivers except those applicable under the Vienna Convention, which covers diplomatic immunity. This makes sense because almost every international organisation operating in Sierra Leone – especially the non-governmental types – was looking to bypass import duties.

The government has also suspended the export of timber logs “with immediate effect”. It has also ordered funds collected on behalf of the government to be transferred “into the Consolidated Revenue Fund with immediate effect”.

Bio told the IMF conference: “As we take on the reins of government and march towards economic recovery, we will be guided by the promises we made to Sierra Leoneans.

“We promised a change to the people in the New Direction, a change that restores sanity in economic and financial management, a change that provides quality service delivery
to the people of Sierra Leone.”

In order to achieve all this, Bio will have to stamp heavily on indiscipline in Sierra Leonean society; where moonlighting civil servants do not turn up for work while pocketing their salaries. Bio has thrown down a marker on this. He said that if civil servants turn up late for meetings with him, they will have to explain why. 

He seems to be following in the footsteps of another former military man, Colonel Andrew Juxon-Smith, who enforced strict discipline during his year in office, from 1967 to 1968. It’s going to be a very interesting period for Sierra Leone over the next five years.   NA

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Written by Desmond Davies

A former Editor of West Africa magazine in London Desmond Davies, originally from Sierra Leone, has been a journalist and commentator on African affairs for almost 40 years in the press, radio and television such as BBC World TV, Al Jazeera, Press TV and CNN. He has covered Africa extensively and has a wide range of influential contacts in the continent. Desmond holds an MA in Mass Communications from the University of Leicester in the UK. His specialities are strategic and political communications. Media and Communications Consult, Due Diligence Expert on Africa.

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