Schools across Sierra Leone are set to reopen on the 17th September 2018. There has been a rocketing of price on food items and other different commodities. School items like: bags, uniforms, shoes and even books are not speared. This is due to the fact that there has been a deprecation of the Leones to the Dollar.
According to a World Bank Report of update 2018,on the review of Sierra Leone’s economic status,it revealed that “After growing at an average annual rate of 7.8% over the period 2003-2014, Sierra Leone’s economic growth slowed to 4.3% in 2017 from 6.3% in 2016, due largely to weak recovery in mineral production. Inflationary pressures eased owing to relative stability of the exchange rate and the tight monetary policy stance of the Bank of Sierra Leone”.
The report further revealed “Domestic financing remains high, exceeding the 2.0% limit on which the government’s fiscal program is anchored. Iron ore production grew by only 5.6% to 6.5 million metric tons compared to an anticipated 9.0 million metric tons. The main iron ore company, Shandong Iron and Steel Group, stopped production in November 2017 due to high operating costs and cash constraints as it reported record loses since it took over the mines from African Minerals Limited in 2016. The non-iron ore economy grew by 3.6%, slower than the 4.3% in 2016 due largely to a fall in construction activities following the slowdown in public investment in infrastructure”.
Because of this down trend in the economy which has been affecting the general population, there has been a call for the government to address the country’s current economic status.
Suad Jeng a business woman, expresses dissatisfaction over the current state of the economy especially as a mother who is preparing for the reopening of schools.
Jeng, a mother of three school going kids, explained about the effect on the increase in basic commodities and also school items now that school is about to reopen.
She said “on a weekly basis, the transportation and allowances for my kids is about Le 200,000. I also buy them other school materials and some time, they also have school activities which require them to buy tickets, and pay other charges. This has lot of burden on me. But one of my children might benefit from the Free Education, leaving the two who are in private schools”.
In terms of health and medical bills, she said “this is also another challenge as during the rainy season, there a lots of diseases especially Malaria; “once my son was affected by malaria and I had to spend lots of money at the hospital”.
As the price of commodities continue to increase and business not thriving well, A local Forex dealer who prefers anonymity said, the current economic status of the country is not good for past few months, but expressed hopes of having the economy better.
Twice the past month, the government engaged in auctioning of foreign currencies which has caused a bit of appreciation of the Leones to the dollars. “Auctioning is a normal routine for the Central Bank and the auction is good but needs to be effective. If this continues, it can lead to a increase in the economy.”
About the effect of the depreciation of the Leones to the Dollar and its effect on business Suad Jeng said “business in general is not good on this side, the dollar rate is generally affecting business and I hardly collect my money from creditors. I mostly run at loss and have little or no profit after buying my goods”.
The Minister of Trade and Industry, Peter Bayuku Konteh, explained the reason for the depreciation of the Leones to the Dollars, which has eventually led to the increase in prices. He says the major factor is that the country has not been engaged in any export activities for a very long time now.
Disclosing that the two big mining companies Sierra Rutile Mining and Shandong Steel were closed down by the previous regime and as a result they have not been able to mobilize sufficient Dollars to help other importers have access to Dollars to buy more goods.
He assured that “I am sure by next year, we should have been able to put the situation under control”
The Minister disclosed plans that the government has put in place to address this issue, which he said includes “reviewing some of the policies that have not been business friendly, to attract more investors into the country. Increase the country’s export earnings which will give way to more Dollars and help cushion the value of the Dollar so as to stabilise the value of the Leones”.
On the auction that was done by the Central Bank, he said “It was overdue and it wasreally requested by the business community, “importers and the business community were requesting for government to intervene so as to help them have access to the Dollar and I think it was the right move and many of them appreciated this particular move.”
The Trade Minister assured that, “by mid next year we should be able to put that situation under control, because the two big companies would have started selling their goods in the world market and also government would have started auctioning the Dollar, so as to help the importers to have access to the Dollar. It’s a matter of time”. He concluded.