Marcus Bangura
With President Bio’s Finance Act now law, Sierra Leoneans will face more tax pain, a high cost of living, and a human cost of living, experts say. In addition to the latest reports ranking Sierra Leonean Leone (SLL) as the weakest in the world, there is the likelihood that a large amount of money will chase a small number of goods, coupled with the low salary syndrome, altogether will make life hellish for Sierra Leoneans, an added burden to the already existing burden that has plagued Sierra Leoneans under President Bio. An indisputable fact that the President himself described as ‘the Grun Dry’. This, coupled with the removal of rice subsidy and the introduction of a 5% tax imposition on rice for the first time in the country’s stable food is unimaginable, especially when President Bio’s ‘Feed Salone’ initiative is still in the pipeline hanging on a thin thread.
It would be recalled that three months into the 2023 general elections, Prof. Kelfala Kallon disappeared into oblivion until he was later spotted, somewhere in the Caribbeans. His disappearance, as many people believed saw the emergence of Dr Ibrahim Stevens to the enviable position of Bank Governor, first as Acting Bank Governor ending Bio’s First Government and then becoming substantive Bank Governor during Bio’s controversial Second Government. His appointment was predicated on his experience to salvage the situation and turn the economy around like the thrust entrusted in his predecessor, Prof. Kelfala Kallon, the text book economist, to whom Dr Ibrahim Stevens served; as deputy Bank Governor untill his appointment as Bank Governor by President Bio in his Second Government.
The substantive Bank Governor and his predecessor are two sides of the same coin. And, as the African proverb say, a chick that will grow into a cock would be spotted the very day it hatches. It goes without sayiny that, If Dr. Kelfala Kallon, former Bank Governor cannot fix the economy in five years with huge financial support from the international community and financial institutions, God alone knows what Dr. Ibrahim Stevens, the Bank Governor will conjure in the name of fixing the economy, improve the exchange rate that has gone mad at the expense of ordinary Sierra Leoneans who are caught in a web of hardship and high cost of living which in turn affects human cost of living. If the former fails to fix the economy, the incumbent can’t fix it, considering the fact that the duo worked together but failed to fix the economy during President Bio’s first democratic government.
The twosome, bank governors are two sides of the same coin, under their watch, Sierra Leone’s comatose economy undergone surgeries but failed to recover and remains in very poor health. All efforts to resuscitate it from its comatose state have failed. The two economic doctors entrusted with the thrust to turn the economy around failed; whilst the former disappeared into oblivion, the substantive is in the loop but the Sierra Leone economy is still in its comatose state. Citizens hold the view that the duo have done very little or nothing to revitalize the economy. Prof. Kallon on a few occasions admitted that he could not fix the economy in the face of rising inflation, where the exchange rates have dwarfed Sierra Leone Leone, and the country imports more than it can export.
Prof. Kelfala Kallon is popularly unpopular in Sierra Leone for his failings to turn the economy around. He made the economy liquidate into stress and leaking more than ever. Upon his appointment in 2018 as Bank Governor of Sierra Leone, he made flamboyant promises and made Sierra Leoneans believe that he had all that it takes to boost the economy. He promised to fix the country’s ailing economy. However, much has not been done and the roof of the economy leaks more than ever with the foreign exchange rate of the dollar killing the Leone with impunity. Dr Ibrahim Stevens, upon his appointment as Acting Bank Governor and substantive Bank Governor made similar promises but from the look of things, nothing has changed and the exchange rate (USD & BP) continues to soar against the Leones. In fact the SLL has become so useless that businesses like estate and rents are now charged on USD, which is disingeneous to the people of Sierra Leone.
Following the replacement of Prof Kallon with his deputy, Dr Ibrahim Stevens to revitalize the economy, people asked, why his deputy, who have been working hand in glove with the Professor. Like his predecessor, the current Bank Governor, since his appointment has done very little or nothing to salvage the economy and under his auspices like his predecessor, the dollar has reached a height worse than ever, the economy is still comatose, with inflation fast passed 40%, subsidies to MDAs not paid on time, the cost of living is extremely expensive, the Finance Act has been passed, among others. If the former Bank Governor, who disappeared in oblivion did nothing to resuscitate the economy what much is left of his successor to do?
As it is, the 1 USD is NLE 24 OR SLL 24000, and & the 100 is SLE 2,400 or SLE 2,400,000 under the watch of Dr Ibrahim Stevens, the current Bank Governor of Sierra Leone, who succeeded the former Bank Governor, Prof Kelfala Kallon. The current rise of the exchange rate has reached alarming proportions; the survival of the ordinary Sierra Leonean is nothing short of a miracle. All these have been due to the failed policies of Prof. Kelfala Kallon, which has been continued with Dr Ibrahim Stevens. With this, is it that the duo virtually ran out of ideas to curtail the exponential increase of the currency and the continued deterioration of the country’s currency? And as the exchange rates increase against the SLL, goods and services continue to increase in prices, affecting all facets of the lives of Sierra Leoneans, irrespective of one’s political affiliations.
According to the latest rankings of the American Business Magazine Forbes,Sierra Leonean Leone (SLL) is one of the world’s weakest currencies in 2024. SLL ranked third (3rd) weakest in the world, trailing behind the Iranian rial (IRR) and Vietnamese dong (VND). It is also not gain saying that Sierra Leone has a small economy with a per capita income of $ 472 in a population of slightly over 7 million people. According to an investigation and analysis conducted by C4D Media Newspaper, Sierra Leone is amongst the 10 countries with the highest fuel price in Africa, 1st in the Mano River Union and Second in West Africa. The World Travel Tourism Council has also ranked Sierra Leone among the 10 countries with the highest regional travel in Africa at $ 109.
Since he assumed office Prof. Kallon had, from time to time, introduced policies to address the rise of the dollar to no avail, instead, all his policies have resulted in the constant increase in the value of the dollar to the Leone. Prof. Kallon had auctioned the country’s dollar reserve on several occasions, but the result has been disastrous, as the dollar poured into the market has simply disappeared, creating a huge demand for the same. This failed policy was aptly condemned by World Bank experts in a seminar held at the Radisson Blu Hotel in Freetown, shortly afterward. Irrespective of the criticisms levelled by the World Bank, Prof Kallon remains adamant and together with his deputy, turned current Bank Governor rolled it out to the extent that Sierra Leone is still caught in a web of dealing with the problem. The Bank Governor has imbibed the policies and keep pushing them. To date, he has not injected in the economy anything new and as in the tenure of his predecessor, the same is been replicated under his administration as the economy is still in shambles.
Other policies, passed by the duo include, the imposition of a ban on the amount of the dollar that customers and businesses should have in their possession, which further exacerbated the problem, as the dollar simply disappeared, and its demand skyrocketed. As this policy failed, Prof. Kallon came up with another failed policy, where he revoked the earlier ban, giving business people the opportunity to buy as much of the dollar as they could, apparently to force people to bring into the banks the country’s local currency that seemed to have gone short in the market. But this again failed.
As if engaged in a ‘think of any number’ game, Prof. Kallon then thought of re-denomination of the currency, a policy that saw many of the country’s finest Economists opposing such the move. But the Text Book Economist could not be stopped, as he went ahead to print a new currency, dubbed the ‘New Leone’ (NLE). After printing the said new currency, the Professor failed to explain to Parliament the amount of the said currency printed, as well as the quantum of the old currency in circulation. The new currency was then introduced in the third quarter of 2022, with the expectation that it will phase out by the beginning of the last quarter of the year. This did not happen, and the date for the phasing out of the old currency was reviewed to March 2023 but it also failed.
What prompted this change was that when the new notes were introduced, some 800 billion simply disappeared from the Commercial banks, as their customers quickly swapped their old notes for the new ones. To address this situation, the Professor again came up with another failed policy, restricting the amount of cash individual and corporate bodies could withdraw. This not only negatively affected the operations of customers, but also saw the hoarding of the local currency by business people because they were unable to get the amount of cash they required to do their business, so the sensible thing to do was to keep the cash and be able to run their businesses and pay contractors and suppliers for their services.
The commercial banks eventually became cash-strapped, as customers refused to deposit into their accounts, and were simply coming to withdraw, as well as instructions from the central bank to encourage customers to engage in digital banking instead. This policy, like all other preceding ones, failed woefully, leading to a further increase in the demand for the dollar, which was also in short supply in the market.
These restrictions were all lifted later and moves to get people to deposit into their accounts became a pipe dream, and the dollar exchange rate continued to rise, creating more hardship for the ordinary man. Thus, with little supply of the new currency to the commercial banks, those entities began paying customers with very new old Leone notes, creating a situation where both the OLD and NEW Leones are being used simultaneously. As customers fear the devaluation of their money, most of them opt to exchange their cash for the dollar, resulting in an exponential increase in the exchange rate of the dollar to the Leone. As things stand, the value of the Leone has depreciated to an extent that the ordinary man is finding it very difficult to make ends meet, especially as the prices of goods have considerably increased due to an increase in the dollar exchange rate, because they are bought and imported in dollars, and these are then converted to the Leone and sold in the market. Meanwhile, as the dollar increases in value, the cost of commodities in the market has also skyrocketed, further impoverishing Sierra Leoneans and making life unbearable for citizens.
The aforementioned are a clear indication of the state of affairs in Sierra Leone. A situation that could be overturned, if the economy is turned around by a Bank Governor who has all that it takes to save the bio-led government from being pointed with ugly fingers. In a situation like this, the Bank Governor must rekindle his strategy look at the syntax of the interplay of international political economy between states, and explore and exploit avenues for the benefit of the country as mercantilism demands.
