Sierra Leone: MCCU Presents Constraints Analysis Report

His Excellency, President Dr Ernest Bai Koroma has on Thursday 4^th July, 2013, attended the Millennium Challenge Coordinating Unit (MCCU) presentation of a diagnostic study of the Sierra Leone economy as well identifying binding constraints to private investments and broad-based growth at the Credentials Hall, Office of the President, State House, Freetown.

Ndeye Sesay doing her presentation

President Koroma at the MCC ConsA presentation

Dr Richard Konteh delivering the welcome statetment

Mamoud Idriss doing his presentation

According to State House Chief of Staff, Dr Richard Konteh who presided over the presentation ceremony, the meeting was to present cabinet ministers with an opportunity to go through the report, backed with a CD containing the detailed report, who are then expected to share details of the report with their technical staff and within two weeks, be able to revert with comments. The COS noted that following the feedback from ministries, the MCCU will then move on to the consultation phase which is expected to be validated by the people of Sierra Leone, adding that “it is a requirement by the MCC process.” “Even the composition of the committees that will meet at the various levels has to be cleared with the MCC. We’ve now done that, so we have a clear idea of the broad representation that we would have”, said Dr Richard Konteh. He also noted that the inputs of members of cabinet are very much critical to the process.

Dr Konteh disclosed that a team will be sent to Liberia to engage their counterparts on the possibility of a joint compact, which the MCC in Washington has proposed. He noted the move will create an opportunity for additional resources to be made available for joint programmes for Liberia and Sierra Leone.

Furthermore, Dr Konteh maintained that the MCC development process has actually involved drawing on previous work such as the Agenda for Prosperity, the transformation conference, and the various diagnostic studies that had been done by the Ministry and other bodies. “With the joint compact with Liberia, we are going to get initial inputs from the ADB report which they have done about Sierra Leone and Liberia in the area of energy and infrastructure, and studies done locally by SLRA to be able to beef up the process”, Dr Konteh said. He concluded that energy seem to be coming out clearly as a binding constraint to the development of Sierra Leone.

Taking us through the scorecard, Ndeye Sesay gave a brief background to Sierra Leone’s amazing performance in 2012 (12 out of 20 indicators), which caused Sierra Leone to become eligible for the MCC Compact Development. She also noted that Sierra Leone has to continue to pass the indicators to remain eligible for the Compact Development process. “To that end, we have been working diligently on improving our scores”, she said.

Ndeye Sesay warned that if Sierra Leone doesn’t pass the corruption indicator, even if the country passes all 19 indicators, it still would not remain eligible for the Compact.

Delivering his presentation on the constraints analysis, Mamoud Idriss, MCCU Coordinator said Sierra Leone has come a long way in moving towards achieving meaningful growth and poverty reduction, adding that the country has over the past decade implemented three generations of Poverty Reduction Strategy Papers; the IPRSP in 2001, the first generation between 2004-2007, the second generation between 2008-2012, the National Conference on Development and Transformation, and now the Agenda for Prosperity.

The constraints analysis, according to Mr. Idriss, seeks to identify the most critical problems with a view to concentrate efforts to solve and address such a problem. It defines a constraint as the factors that deter households and firms from making investment of their financial resources, their time and their effort, that would significantly increase their incomes, which alleviated, will produce the largest growth response.

“What are those things that are really stopping you, I, and the average Sierra Leonean from investing our time and resources as a means of increasing growth?” he asked.

Some of the key findings of the report are as follows:

1. Sierra Leone has maintained a modest growth trajectory over the past (average 6%); however, the gradient of this trajectory needs to dramatically (average 13%) increase to achieve the targeted middle income status in the next 2 to 3 decades.
2.  Private investments have been considerably low due to a number of factors; particularly domestic private investments, needs to significantly increase in order to ensure broad-based economic growth and development in the country
3. Private returns to investments are generally low and vulnerable to a number of macroeconomic and microeconomic risks; except for large foreign companies which find ways of insulating themselves against such risks
4. Low social returns to private investments, particularly domestic private enterprise, are made worse by a very weak economic infrastructure service base in energy and roads as businesses that cannot find effective circumvention measures for these constraints remain small, informal or virtually non-existent

Some of the conclusions of the report could be found below:

1. The lack of adequate, reliable and affordable access to electricity supply to support the emergence and growth of a wide range of economic activities; and
2. The extremely poor conditions of secondary and feeder road networks, which provide access to highly productive regions of the country with even higher potentials to drive growth
3. The low quality and availability of Water and Sanitation coupled with the high incidence of waterborne diseases lead to high health expenditures and days lost due to such diseases, hence impacting negatively on worker productivity.
4. The access and cost of Land is high and that the policy and institutional issues surrounding private investments are poor.

The presentation ceremony was witnessed by the president, Dr Ernest Bai Koroma, Vice President Alhaji Chief Sam Sumana, cabinet ministers, senior government officials, and members of the MCCU team as well as staff of State House Communications Unit.  – By State House Communications Unit

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