The Minister of Finance, Dr Samura Kamara has emphasized that it is essential to grow the economy and ensure that the export markets expand in order to attract more foreign exchange.
Dr Kamara affirmed further that in the economy, “both export and imports are very essential for the development of Sierra Leone, because in exports we raise export revenues in foreign currency terms and therefore we can finance our foreign exchange requirements for infrastructure and development needs etc”.
Speaking with Awoko on a wide range of financial issues, Dr. Samura Kamara disclosed that, “we also need critical imports of essential commodities like rice, petroleum product, and building materials, we need these to enable to grow the economy it’s a critical balance. But the only solution to this is to grow the economy to make sure that the export markets expand – it grows and through that way you would be able to get more foreign exchange into the economy”.
What government is trying to do, he disclosed, “is firstly to ensure that we do not frustrate the importation of essential commodities and that’s why the Central Bank Auction has increased the number of foreign exchange in the market from around $700,000 to almost $2,000,000 every week”.
Further he said “we will continue to ensure that we provide some foreign exchange not to frustrate the oil importers, rice and other essential commodities importers”.
The Finance Minister also stated that government is “also putting incentive packages in place to encourage people to grow export commodities like coffee, cocoa and the rest of it so that the economy will gain from both perspectives”.
Commenting on the issue of remittances and its effect on the economy, Dr Kamara noted that, “the financial crisis and the emerging global recession certainly has put a great pressure on our brothers and sisters outside the country, as most have lost their jobs, mortgages and as a result of that their finances are severely constrained.”
He went on to explain that “the immediate impact on that is to reduce the amount of support to us here in Sierra Leone, and they actually contributed to the sustainability of our lives during the war and post war era.”
With these pressures, he opined, even though he cannot readily quote the present figures or quantum of home remittances, he however indicated that “in one bank alone it had gone down considerably and the banking system is struggling on a huge back log of foreign exchange”.
We only hope that their status would improve so that they can revert to their former glory where they would be able to remit more to support their families.
On the issue of the depreciating Leone he observed that it is essential to understand when a local or domestic currency is depreciating it means one or two things.
According to Dr Kamara, when a local currency or domestic currency is falling in value in relation to another currency – the US dollar, it means firstly “that there is tremendous pressure on the foreign exchange in the market, with respect to the demand for it.
Secondly, sometimes it’s a deliberate policy of government to actually announce the devaluation of a currency. In the case of Sierra Leone we have not announced any devaluation, but what is happening is a mere reflection of the demand and supply of foreign currencies in the domestic market.
Now, he emphasized, “it is not all doom and gloom”, for the exporters it is an advantage simply because for one dollar of export he is getting more Leones, and therefore that is an incentive.
On the issue of the discovery of off shore oil, he said, “if in the next couple of years oil is exploited on a commercial basis it means well for Sierra Leone, it does not matter the price but it would add to the country’s capacity to finance development and poverty reduction activities.”
“I think Salone has learnt a lot about how diamonds have been managed to be able to manage oil revenues when they come in a much better way, as I know the President is considering ways of developing mechanisms, as we do not have to wait when there is oil before embarking on putting mechanisms in place.”
“We are further looking at the institutional mechanism by which we can manage oil revenues in a much better manner than we have done in the case of diamonds and other mineral resources.”
By Samuel John