“Cosmetic” Austerity Oyeh!
By Julius Spencer…
Today, I was going to continue my discourse on changing our political system, but I have decided to suspend this and come back to it next week because of the austerity measures that the government announced recently.
Yes indeed, austerity has arrived again in our land after having been banished some years ago. And we are indeed in for some tough times.
I notice that everyone is talking about the measures that were announced through a State House release a few days ago, but be assured that the release does not tell the whole story. It focused on the cost saving measures that the government intends to take and does not say anything about the fact that the government subsidy on fuel is going to be removed, which will lead to an increase in fuel prices and consequently an increase in all prices. We have already experienced an increase in electricity tariff and addition of GST onto electricity charges. But if we think times are hard now, I can assure you that the worst is yet to come and we all need to brace ourselves for a period of intense hardship. And those of us who lived through the hardships of the 1980s and 1990s, with fuel queues, rice queues, etc., are dreading what is to come.
In the face of such gloomy prognosis, one is forced to ask the question, how did we get here? And the only answer one can arrive at is bad management.
Our government officials and their apologists are fond of telling us that our economy suffered from the twin shocks of Ebola and a fall in iron ore prices. But that is simply an excuse. I believe that if not for Ebola, our economy would have collapsed earlier. In fact, if not for the people that died, one would even regard the Ebola outbreak as a blessing in disguise because this is why we are getting the kind of support from the international community that is going into the post Ebola recovery activities.
I believe our current situation is as a result of bad management because of a number of factors.
In the first place, even though the idea of introducing GST had been on the cards for a while, the previous government didn’t have the political will, in other words the courage, to implement it, but Ernest Koroma’s government demonstrated tremendous courage when soon after coming to power, it introduced GST. This significantly boosted government’s revenue along with the revenue it also started receiving from iron ore. The iron ore sales and projections of sales over several years, caused Sierra Leone to become one of the fastest growing economies in the world and this lulled the government into a false sense of security. Believing that the money will continue flowing indefinitely, the government embarked on a spending spree, on things which indeed are necessary for the country to develop, like roads, but at a pace that could not be sustained when the bubble burst. And indeed the bubble has burst.
If all the money had been genuinely spent on projects like roads, electricity, etc., perhaps one could have forgiven the government for its actions, but there are indications of corrupt activities coming into the mix. If what the opposition has been saying for a while, and which Kandeh Yumkella asserted in an article published recently in thesierraleonetelgraph.com titled “The State of Our Economy: Institutionalized Leakages and a Bankrupt Economy is true, then indeed, our economy has been bankrupted by graft. It is claimed that the roads financed with government funds cost 3 to 4 times more than those financed by the EU and other international funding agencies.
But even if this is not true, it is clear that the government has admitted to having mismanaged the funds it had at its disposal. How and when did this admission take place? Well, it’s embedded in the statement from State House informing the public of the austerity measures. And this, like the Whatsapp message the President sent out some time ago appealing to fellow Sierra Leoneans to help save the Leone, is a major public relations disaster. There are many of the cuts that beg several questions, but I’ll simply highlight a few to show why this statement is a PR disaster.
· 50% cut in fuel allocations to all MDAs;
· 50% cut in monthly office imprests;
· 50% cut in DSA for local travels;
· Restrict all overseas travels and rationalize delegation sizes;
· 50% cut across the board in vehicle maintenance;
· Eliminate double payments of pensions and salaries across the board.
The cut expenditure on the items listed above, in my view, indicates that the government believes the tasks these funds are meant for can be achieved with 50% of what was being spent, which gives the distinct impression that the government was not being prudent in its spending. In fact, in the case of imprests, one wonders whether they were being retired with receipts, because an imprest is not a budgeted amount. All the expenditure incurred should be retired under a budget line item. An imprest is simply an administrative arrangement that makes cash available for financing activities of the institution. The fact that it is now being cut by 50%, makes one wonder whether imprest in government departments is being used as a slush fund. I hope not.
The two most telling items on the list, however, that to my mind amount to a clear admission of mismanagement are the one that signals a restriction on overseas travels and rationalization of delegation sizes and the one about eliminating double payments of pensions and salaries.
Coming so soon after the hue and cry over the size of the government delegation to the recent UN General Assembly where some of the members of the delegation spent some time dancing “sen am go dong” on the streets of New York, that line in the government statement is a clear admission that government delegations in the past have not been properly rationalized. To make matters worse, the Minister of Information was on radio recently saying that now any minister wanting to travel will have to justify to Cabinet the need for the trip and what the country stands to benefit. I was surprised to hear that because I thought that this process was in place, since that was what was in operation when I was a minister. In fact, while I was a minister, you had to submit a Cabinet paper and defend it, and on your return, you had to submit a report to Cabinet on the trip, clearly outlining the benefits to the country. It is clear that this procedure was abandoned at some point and is only now being reinstated. I hope it will become a permanent feature of government procedure now.
I notice also that the government statement only talks about per diem for local travels being cut by 50% which indicates that per diem for international travel will not be affected. I wonder whether the system of using the UN daily subsistence rate that was in place while I was a minister is still in operation or whether it had been changed too. The UN daily subsistence rate stipulates the per diem rate for most cities in the world and if that is not currently in use by the government, I hope it will be added to the list of austerity measures.
Now the big one. Double payments of pensions and salaries? Wow! You mean this has been going on and it’s only now government has decided to eliminate this obviously corrupt activity. Is it in fact enough to just eliminate the practice? Should those involved not face the law?
You see now why I said earlier that the statement issued by government on the austerity measures is a PR disaster? I hope the government will in future carefully examine the potential interpretation and reaction of members of the public before issuing any statement. It would have been better to simply say something like “government has instituted a number of cost saving measures that will result in reducing government expenditure by up to…” instead of listing all the details.
But let me end today by congratulating President Koroma because it seems he has heeded advice and reduced the length of his motorcade. I have encountered his convoy twice since I mentioned its length in one of my articles and I only counted about 12 cars each time. Well done Mr. President, but see if you can reduce it further in order to further reduce the government’s fuel bill.
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