By Amin Kef Sesay
Progression for Sierra Leone from a low income to a middle and upper middle-income country status rests heavily on successful trade in regional and global markets. Yet as the situation stands, Sierra Leone’s exports, relative to imports, in terms of monetary value, remains very low – so low that year after year, Sierra Leone fails to achieve budget surplus but instead keeps increasing its international debt.
A comprehensive, forward-looking National Trade Policy must address the major anti-export blocs and challenges.
Given the importance of agriculture for poverty reduction, additional policies and institutional capacity are needed to ensure effective commercialization of the sector.
In improving the country’s trading competitiveness, rural infrastructure is particularly important in enabling increased agricultural production and export.
Efficient land policies and land tenure institutions are needed to ensure the functioning of land markets, protection of property rights, development and establishment of efficient farm structures.
Sufficient credit at competitive conditions is important for private sector investment in production, storage, transportation and marketing of agricultural products. This means that by now, Sierra Leone should have a specialized export finance bank.
Given the country’s mounting public debts due to low revenue generation, capacitating the trade sector is a key factor in boosting the country’s overall socio-economic development.
As such, experts The Calabash newspaper spoke to on this all important transforming agenda is that the country needs to design and implement a very formidable local and international trade policy aimed at:
Increasing production and export of value added primary goods (commodities) in which the country has natural comparative advantage
Import substitution through the country developing domestic manufacturing capability and capacity e.g. tomato farms can build tomato processing factories; onion farms can substitute for onion import, etc.
Critically, the experts state that Sierra Leone can venture into export-focused manufacturing production, taking advantage of lower unit cost labor and economies of scale in production
Such trade policies the experts believe can up trade as a significant percentage of national income and competitiveness in international markets that in turn will have huge bearing on overall macroeconomic performance and development prospects.
As such, a new national trade policy can bring the country the following benefits:
More foreign currency to improve on balance of payments by building up our stock of dollar reserves.
With more to export, the country will have liquidity to finance imports of essential imports of capital equipment / technologies and energy supplies.
With increased income from international trade, the Bank of Sierra Leone will be able through the commercial banks and other financial institutions to inject demand into the circular flow of income and spending by SMEs, thereby creating positive multiplier effects on the overall economy
This will result in increased employment in export industries and related industries which will lead to rising per capita incomes and also stronger Human Development Index scores
Because of increased domestic productivity that would result from more productive businesses springing up, this will result in falling prices for consumers resulting in increase in real incomes.
