{"id":426053,"date":"2011-05-18T08:28:24","date_gmt":"2011-05-18T08:28:24","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/"},"modified":"2011-05-18T08:28:24","modified_gmt":"2011-05-18T08:28:24","slug":"time-to-end-countrys-dependency-on-aid","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/","title":{"rendered":"Time to End Country’s Dependency on Aid"},"content":{"rendered":"
\n
\n
\n

Concord Times (Freetown)<\/p>\n

17 May 2011<\/p>\n

\n

document<\/p>\n

Freetown \u2014 To begin a case study about the history of debt accumulation in Sierra Leone, I candidly need to build some convincing arguments against our growing fascination with international borrowing. Why does a small country of 6 million people so heavily rely on foreign donors rather than developing its own internal budgetary system to finance government’s expenditures? Is it the lack of a political vision and the lack of strategic leadership the reason why we could not maintain a balanced budget? Is it the absence of surplus revenues and robust national savings the major problems of our massive debt situation? I want to dig deeper into the history pages of the debt story about Sierra Leone.<\/p>\n

DEBT HISTORY<\/p>\n

Let’s go back to 1970 when our debt was $59 million. Our debt astronomically ballooned in 1980 to $433 million by the reckless spending of President Siaka Stevens who wanted to impress his fellow African leaders by hosting an expensive OAU summit. Since then, Sierra Leone lost its way into the dark alley of a pyramid of debt. The source of the problems: a consistent pattern of irresponsible borrowing by succeeding leadership (both the APC and SLPP government), while the International Financial Institutions turned blind eyes to the huge concession loans it was lending to the cash strapped government of Sierra Leone.<\/p>\n

From 1990 to 2000, President Momoh, Captain Strasser and President Kabbah more than quadrupled our national debt to $1.2 billion. Again, from 2001 to 2006, we went to another $1.6 billion with no serious government effort to control the spiraling debt crisis either by reducing spending or plugging the hole on institutionalized corruption. Today, Sierra Leone cannot even show what has happened to the millions of dollars of aid money that it received for the past 40 years.<\/p>\n

We must, however, commend President Kabbah’s government for helping Sierra Leone qualified in 2002 in the group of “heavily indebted poor countries” (HIPC) both with the IMF and the “multi lateral debt initiatives” (MDRI) programs. Sierra Leone received a total debt cancellation of $1.6 billion in 2006 with a balance of only $100 million on the creditor’s financial books.<\/p>\n

With such impressive milestone, it was expected that Sierra Leone will move forward to securing an international credit rating, become a debt-free nation and join the prestigious nations of International bond holders like Ghana, Botswana and Mauritius.<\/p>\n

Instead, we are running around donor conferences, holding donor workshops and expecting some overnight miracles from multi-national investors to open their doors for business in Sierra Leone. Indeed, empty talks and handshakes will not bring IBM Company, Microsoft production plants, Toyota and Honda Car manufacturers and Rice processing factories to Sierra Leone. It is the scope of the risk assessment, the transparency in government, the quality of infrastructures and good investment climate that will ultimately determine the level of investments in any modernized country.<\/p>\n

Presently, our new external debt stands around $800 million today. This means Sierra Leone has relapsed into its manic addiction of aid money. Instead of paying down the $100 million to a zero balance in 2006, we went back to the drawing board on a spending spree like a kid at the candy store.<\/p>\n

If this reckless spending pattern continues, we will exceed the $1.6 trillion that the International creditors (IMF, Paris Club and World Bank) cancelled in 2006 by the end of this year. The negative impulse of borrowing will continue to prevent us from becoming a debt-free nation ready to be full participant in the global society. And Foreign Direct Investments (FDI) will timelessly evade us as long as we are buried in the dark grey clouds of debt.<\/p>\n

AID MONEY<\/p>\n

It is therefore time for a change. Aid money is not free. African countries including Sierra Leone pay close to $20 billion in debt repayment per annum to International Banks. And it is paid at the expense of the education and health budgets. Over the past 60 years, at least $1 trillion of development aid money has been paid to African governments. Donor money historically is a “short term solution” that bands the wounds but never prevents the accident. It solves the immediate problems but never addresses the long term sustainable growth.<\/p>\n

I think aid has made my country, by and large, poorer and the prospect of economic growth dismal. This man-made “humanitarian disaster” has left Sierra Leone with a huge debt burden and a poorly managed economy. It has increased poverty and corruption, created an inflationary prone market and discouraged foreign investments. But we have a choice to change course and find responsible ways to better manage our debt and economy. Otherwise, we will always see our promising young men and women languishing in the corners of our streets with no job or income to support their families.<\/p>\n

Furthermore, the size of our international debt and the risk level has made investors less attracted to finding good market in Sierra Leone. And why do we have a huge percentage of our national budget largely coming from the Department for International Development (DFID) in the United Kingdom (UK), the European Union (EU), China, Japan and the United States of America? Why do we seem to believe that investors can bring their capital investments when they know we cannot even account for our own money let alone the “aid dollars” they give us?<\/p>\n

We must begin to build a leadership of trust with an economy that is market-oriented before multi-national companies will be willing to open new industries and new markets in Sierra Leone. The World Bank did not impose their wills on us, we made the conscious decision to accept these outrageous concession loans. The fault stops at our doorsteps not at the World Bank Headquarter in Washington D.C.<\/p>\n

Frankly, Sierra Leone must take the long road that leads to a donor-free economy with an investment strategy that establishes job creation, access to capital markets and surplus foreign reserves. Our nation must participate in the China “new African initiatives” of large scale investment in infrastructure. We must increase free trade with the European Union (EU), Japan and the United States in agricultural products (not only mineral resources).<\/p>\n

It is time to diversify our economy into the financial services, manufacturing, shipping, maritime and fishing industries on a larger scale. We cannot generate $270 million revenue in 2010 and then incurred major expenditures worth $372 million in 2010. We must be able to balance our trade deficit by exporting both our mineral resources and natural commodities. We must foster the microfinance institutions that flourish in Asia and Latin America. We must end the vicious cycle of aid money financing. It is not working.<\/p>\n

NEW ECONOMIC FORMULA<\/p>\n

And what is the new economic formula for the next twenty years? Can we continue to be trapped into the debt-cycle even when the International financial institutions know that aid is the problem rather than the economic solutions? We just celebrated our 50th golden jubilee on April 27, 2011, yet Sierra Leone has not gained its economic independence from Britain simply because we still depend on them for supplementary budget assistance.<\/p>\n

We need to formulate a new plan of action, if we are serious about reducing our debt, by increasing our revenues and eliminating the aid culture. Let’s have only 5 per cent of our development financing to come from aid, 35 per cent from trade (particularly with the EU and China), 26 per cent from foreign direct investment (FDI), 10 per cent from capital market (access to international bond market) and the 25 per cent to come from remittance (Diaspora sending money) with robust domestic savings. Let’s end the signing of these so-called “loan guarantees” (subprime interest loans) or the financing of a water project for Koinadugu District through “concession loans” from the World Bank Institution.<\/p>\n

TRANSPARENT INSTITUTIONS<\/p>\n

With this new ambitious economic vision, particularly building a transparency system to track, verify and monitor government spending and incomes, we can create a solid economic growth beyond our imagination. If we have stronger and credible public institutions like the civil service and banking sector, we can build foreign reserves and massive national savings through foreign investments, tax revenues and export earnings. We can create jobs for millions of Sierra Leoneans and establish a new credit market system where business investors can get cash flow to operate their investment holdings.<\/p>\n

<\/p>\n

\nMore News on allAfrica.com<\/strong><\/legend>\n<\/fieldset>\n

AllAfrica – All the Time<\/p>\n

\n<\/div>\n<\/p>\n

More here:
\nTime to End Country’s Dependency on Aid<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Concord Times (Freetown) 17 May 2011 document Freetown \u2014 To begin a case study about the history of debt accumulation in Sierra Leone, I candidly need to build some convincing arguments against our growing fascination with international borrowing. <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-426053","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-local-news"},"yoast_head":"\nTime to End Country's Dependency on Aid - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Time to End Country's Dependency on Aid - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Concord Times (Freetown) 17 May 2011 document Freetown \u2014 To begin a case study about the history of debt accumulation in Sierra Leone, I candidly need to build some convincing arguments against our growing fascination with international borrowing.\" \/>\n<meta name=\"twitter:creator\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:site\" content=\"@ghanamma\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"Time to End Country’s Dependency on Aid\",\"datePublished\":\"2011-05-18T08:28:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\"},\"wordCount\":1399,\"commentCount\":0,\"articleSection\":[\"Local News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\",\"url\":\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\",\"name\":\"Time to End Country's Dependency on Aid - Ghanamma.com\",\"isPartOf\":{\"@id\":\"https:\/\/www.ghanamma.com\/2011\/#website\"},\"datePublished\":\"2011-05-18T08:28:24+00:00\",\"author\":{\"@id\":\"\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.ghanamma.com\/2011\/#website\",\"url\":\"https:\/\/www.ghanamma.com\/2011\/\",\"name\":\"Ghanamma.com\",\"description\":\"News In Ghana - Latest Ghana News Headlines\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.ghanamma.com\/2011\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Time to End Country's Dependency on Aid - Ghanamma.com","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/","twitter_card":"summary_large_image","twitter_title":"Time to End Country's Dependency on Aid - Ghanamma.com","twitter_description":"Concord Times (Freetown) 17 May 2011 document Freetown \u2014 To begin a case study about the history of debt accumulation in Sierra Leone, I candidly need to build some convincing arguments against our growing fascination with international borrowing.","twitter_creator":"@ghanamma","twitter_site":"@ghanamma","twitter_misc":{"Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/#article","isPartOf":{"@id":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/"},"author":{"name":"","@id":""},"headline":"Time to End Country’s Dependency on Aid","datePublished":"2011-05-18T08:28:24+00:00","mainEntityOfPage":{"@id":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/"},"wordCount":1399,"commentCount":0,"articleSection":["Local News"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/","url":"https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/","name":"Time to End Country's Dependency on Aid - Ghanamma.com","isPartOf":{"@id":"https:\/\/www.ghanamma.com\/2011\/#website"},"datePublished":"2011-05-18T08:28:24+00:00","author":{"@id":""},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.ghanamma.com\/2011\/05\/18\/time-to-end-countrys-dependency-on-aid\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.ghanamma.com\/2011\/#website","url":"https:\/\/www.ghanamma.com\/2011\/","name":"Ghanamma.com","description":"News In Ghana - Latest Ghana News Headlines","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.ghanamma.com\/2011\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/posts\/426053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/comments?post=426053"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/posts\/426053\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/media?parent=426053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/categories?post=426053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2011\/wp-json\/wp\/v2\/tags?post=426053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}