The Commissions of Inquiry are coming. There is jittery and discomfort in a certain corner of the political divide. Are the guilty afraid? I am not going to indulge myself with this as I am more interested in confronting the well know rhetoric of the moribund APC. That rhetoric maintains that the APC government’s infrastructural development policy transformed Sierra Leone.
Partisan political elements in Sierra Leone have praised the government of former president Ernest Bai Koroma for undertaking an ambitious infrastructural development policy that focused mainly on the construction of road networks in all four regions of the country. But was this policy of any economic value to Sierra Leone? In other words, did Sierra Leone’s economy grow consistently under Koroma and did the gains of growth if any filter down to the masses of Sierra Leoneans in the form of jobs and improved standards of living?
Public infrastructure investment in the form of spending on roads, bridges and other related projects can be an anti-recessionary tool of fiscal policy if properly undertaken. When the economy is performing poorly, greater infrastructural spending even at the risk of ballooning the national deficit can be a form of economic stimulus. This argument is embraced by Keynesian economists who assume that an underproductive economy can be stimulated back to full output through public expenditures to boost aggregate demand.
Accordingly, unemployed folks can be given public infrastructure jobs from which they will be paid wages. These workers will in turn spend their incomes on consumption goods thereby increasing consumer spending which in turn stimulates the economy and promotes growth. Thus, Keynesians believe that stimulus spending has zero opportunity costs if deficit spending occurs during periods of high unemployment.
Relative to Sierra Leone, evidence abounds that Koroma’s infrastructural development policy was mired in corruption. Government officials colluding with unscrupulous contractors to inflate the value of contracts at the expense of poor taxpayers prevailed like a pestilence.
Studies have shown that notwithstanding the ravages of Ebola, APC’s vaunted infrastructural development policy did not have a trickledown effect on the economy as the fundamentals of the economy worsened. Before Ebola struck, the rate of unemployment had already climbed to a staggering 75% while the rate of inflation continued to be in double digits. Although there was modest growth, Sierra Leoneans did not benefit from it since corruption ran rife in all the institutions of the country. For growth to benefit a citizenry, there must be institutional reform, which unfortunately was sorely missing in Koroma’s ultra-corrupt administration.
Evidently, Koroma’s legacy of corruption, economic mismanagement and recklessness presents a formidable challenge to president Julius Bio’s efforts at transforming the national economy. Bio has closed leakages and improved on domestic revenue mobilization. However, taxes do not create wealth. Production does. Therefore, Bio would have to focus on production in mining, agriculture and other vital areas of the economy while also implementing effective and efficient fiscal and monetary policies to have the economy functioning again at an optimal level.