Thursday, July 12, 2007

Creating an Open Market for Investment in Post War Sierra Leone

Promoting economic growth and national development through increased trade investment should be a top agenda of the Central Bank of Sierra Leone and the government, should we talk about inviting investors to come to this country. There are several debates as to what factors and policies that influence our economic decisions in the global market. The government through it business entities must take a logistic approach to ensure

that the country becomes a preferred environment for investors in the sub-region.
It is clear enough to note that the image of the country during the ten year rebel war as a destination for foreign direct investment has not been favourable. The odd notion directed by the international media to the global market about the situation in the country has contributed greatly to halting some potential business oriented investors coming into Sierra Leone. Although the country is practicing a liberal economy and encourages foreign direct investors with attractive incentives, she has also succeeded in pointing out to investors that she is environmentally friendly.
Today the indisputable fact remains that there are development gaps and vast opportunities for foreign investors while the government has also put in place economic reforms that aimed at making a prioritize market for investors. There has been also an improved regulators frame work for an open market system which permits profit repatriation and providing tax exemption for investors. These reform measures are a catalyst for investors wanting to explore the various sectors in the country.
In the tourism sector, the country is endowed with an abundance of natural touristic attraction and wonders of its natural landscape, beautiful coastal view and scenery with rich cultural heritage. Unfortunately this sector though attractive has not received lots of tourists and even those coming in as investors such as those in the hotel industry have found it very difficult to proceed with their business. We are blessed with diverse species of birds, crocodiles, chimpanzees and many unrecorded and unclassified species which are also unique to the country. Investors are willing enough to come in to help develop these areas and mostly the tourism infrastructure if only they see the market as business friendly. The mineral sector has received a huge deposit of bauxite, rutile, gold, diamond, minerals and metals that are all scattered over the country. In addition, there have been much feasibility studies and potential for oil and gas exploration. All of these areas lie in want of investors to easily cease the opportunity.
Sierra Leone can boast of a coastal of about 210 nautical miles with over 200 diverse fish species that have been identified in our territorial waters. The fishing output stands a little over 50% under the yield potential. There are lots of shellfish like shrimps, tuna, mackerel, snapper, catfish, lobsters, crabs etc which are being used by customers and at the best restaurants and hotels around the world. But what is lacking is the protection and management of this sector of the country. Reports of encroachment of foreign fishing vessels in our waters and taking our fish products to Europe are creating an economic loss for the country. The country’s waters are under fished with a current level of a little over 55,000 tons. The country, though been cheated by some illegal vessels, is encouraging more fishing vessels to come openly and improve the marine infrastructure and substantially increase the fishing output to some 200,000 tons.
While some countries in the world trying to make the agriculture sector more economical with fertile soil, Sierra Leone is endowed with thousands of hectres of arable land. At present, it is evidently clear that only 20% of the land is been exploited for agricultural purposes and two thirds of the population is engaged in subsistence farming, but agriculture accounts for less than 45% of the national income. The traditional export crops such as Coffee and Cocoa could benefit inversely from technological and capital investment to increase production and yields. There is great need to improve the oil palm, sugarcanes, ginger, banana and apple plantations for export. The production of cashew, cassava, rice and groundnut could also be developed for export. One good step in the right direction is that the country is benefiting from the United States African Growth and opportunity Act (AGOA), which guarantees access to the US market and has preference in the European markets.
What perhaps Sierra Leone needs is sustainable development assistance recapitalizing the key institutions and investment in machines, factories and other programmes in which state owned companies and assets are being divested, although the process is weak and slow. The Investment Promotion Act No. 10 of 2004 and other recent legislations such as the Banking Act have all provided an enabling environment for the private sector to thrive and in the process ensure the sustainable growth of the economy. Presently a good number of companies such as G. Shankandas, Kings Foam, Intrapex etc., are striving well, and government is needed to make more profitable companies under it auspices such as those in the manufacturing, insurance and export sectors been privatized.
In a bid to maximize opportunities the Central Bank of Sierra Leone recently succeeded in having a bill passed in parliament as a legal framework for the development of a stock exchange/capital market so that the ordinary man can buy and sell shares in a transparent and open manner.
In a nut shell, Sierra Leone’s long-term development depends largely on industrial investors who will establish modern manufacturing products that would compete in the international markets.

African Path