Does J. J. Saffa and team deserve the award?
Does J. J. Saffa and team deserve the award?
By Ansumana George- email@example.com
I found myself in a secluded environment working on my first book, with a very cold sierra juice by my side, my mind briefly thought of finance and Jacob Jusu Saffa appeared in the picture. I said to myself, this man has been subject of discuss for a long time when the issue of bread and butter is mentioned but more of recent that catches public interest is the award that was accorded to him and his team on Thursday by the President.
Finance as my specialty, I become itch whenever there is public discuss relating to finance so by all means I decided to translate my thoughts in writing on this matter. I am going to move far away from the political lens some members of the public are looking at the award given to the Finance Minister and team, and focus more on the professional point of view.
Those who studied Public Administration can explain the extent to which performance management is relevant but I know and I was taught in University that performance management has five main objectives, but for this purpose it systems exist to help individual develop and increase performance efficiency and productivity ensuring that individuals perform to the best of their ability, and earn appropriate reward. This in turn leads to improved organizational performance.
Finance and Economics are beyond what some members of the public perceived, during my elementary stage in University, there was a time I was so enthusiastic to answer the question that was asked by my Finance Lecturer, what is Finance? I responded finance simply means money. He replied thank you but more is needed he said, Finance is the procurement and distribution of funds and the effective and efficient management of money and it related assets. Among the various types of finance my focus is going to base on public finance which has to deal with tax, spending, budgeting, and debt issuance policies that affect how a government pays for the services it provides to the public.
Does J J and team deserve the award? these justifications given below will answer the question.
The Minister of Finance inherited a debt crisis economy that was in a state of opprobrium with spending that far exceeds revenue, key sector that largely contributes to the economy which is the extractive sector was in coma, an inflationary rate of 18.22% as compare to now which has dropped to 15.7%.
According to World Bank and IMF data as at the time of inheritance by J J Saffa, 27% of Sierra Leone’s debt was owed to the IMF, with a further 17% owed to the World Bank and 29% other multilateral institutions. In total, 73% of the debt was therefore owed to multilateral institutions, 15% was owed to private creditors and 12% other governments.
Austerity was language of the day during the last three years of the past regime, the term itself is not a bad term it is an economic policy that provides solution but such policy can only be implemented when government thinks there are reckless spendings and also to control public sector debt which happened in the past regime. This is a brief picture of what J J Saffa met as Minister of Finance.
Realistically this economic catastrophe cannot solve within short run, even if the President appoint one of the best living economist Jeffrey Sachs the founder of Sustainable Development Goals (SDGs). But progress has to be seeing in the short run to assure us that it will solve in the long run, I think that is what J J Saffa and team are doing which is nice.
I think J J Saffa and team deserve not only an award from the President but also a public commendation if only we prefer nationalism than politics; these are my reasons.
Upon assuming office as Minister of Finance, his sound financial policies are signaling hope for better economic prosperity in the long run;
1. Single Treasure Account, is an imperative instrument for consolidating and managing governments' cash resources, thus minimizing borrowing costs.The past regime was having fragmented government banking arrangements, the establishment of a TSA by the Ministry of Finance receives priority in the public financial management reform agenda.
2. Paying debts alongside financing government capital projects e.g., roads, institution building, infrastructure like, electricity and water, free quality education without resulting to overdraft.
3. Attending to government recurrent expenditure e.g., salary payment without delay, running cost of public sector institutions and responding to emergencies etc.
4. Financing recruitment of nurses, police, military, forest guards, increment of salaries for teachers, the force and lecturers. Though the creation of new Ministries and Institutions were not favored by some people but to an extent there was need, an economist believes if government expenditure increases to tackle unemployment it is good but it must go in line with increase in revenue what this means, the increase in expenditure by J J Saffa geared towards the creation of jobs which is good and in line with that, the revenue increase under his leadership is encouraging as commended by world economic institutions.
According to World Bank though 2019 was challenging but they said the fiscal deficit will continue to improve as the government strengthens its fiscal consolidation measures. The overall fiscal deficit will narrow from 5.7% of GDP to 3.4% due mainly to increased revenue mobilization and expenditure management. Total revenue was expected to increase from 14.9% of GDP to 15.7% in 2019 as the government continues to implement its medium-term revenue mobilization strategy, which includes automation of customs documentation and tax processes and improving the operations of the treasury single account. Tax revenues are therefore expected to increase to 14.0% of GDP from 13.7% in the previous year.
5. The Minister of Finance has restored international confidence due to his prudent financial management which has even attracted many International Financial Intuitions to send their monies in the form of grants and not loan.
6. Due to the outbreak of the COVID-19 pandemic the whole world experienced the worst economic crisis since the great depression in 1930 according news read by BBC. Because of the frequent lockdowns we saw the demand for crude oil dropped which affected countries whose GDP largely depends on oil. Production in developed and developing countries dropped drastically and we saw American stock exchange market battling with down turn.
Amidst all that, though we are not worst affected by the virus due to robust actions, the Minister of Finance was able to manage the economy well. He launched the Quick Action Economic Recovery policy worth 50 Billion Leones through the Central Bank to tackle shortage of essential commodities in the market, and we saw during the height of the pandemic there was no shortage of essential commodities.
7. The Minister of Finance was able to procure funds which were distributed to the less privilege and also to the tourism sector to shift the economic burden of the COVID-19.
8. Lastly the Ministry is working on a Micro Finance Policy called Munafa which will help people with business idea, the capital to implement and this is good to level economic activities in the country.
I will leave you with the view of the IMF Deputy Managing Director, David Lipton about Sierra Leone’s Economy when he was interviewed by Umaru Fofana early 2020.
Umaru: Now when you say there are challenges or rather the economy is challenged what specifically do you mean? Because people listening out there might think about the fact that every now and again there are complaints about lack of jobs, the devaluation of our currency and all of those things.
David Lipton responded: Well I think it’s fair for people to have discontent over the current situation, because it is very low income country, a very low literacy and a country demographically challenged. I think roughly half of the population is under the age of 19. So bringing about broad rise in living standards is not something that can happen overnight. So I think is fair both to be daunted by the challenges but very excited by the prospects and the plans and intentions of the government right now.