Finance, Economic and Development Minister, David Carew has said poor management of several key public enterprises has led to a significant drag on economic growth and job creation.
The Minister made this observation when reading the budget in Parliament, where he referred to Rokel Commercial Bank (RCB), Sierra Leone Commercial Bank (SLCB), National Insurance Company (NIC), Sierra Leone State Lottery, Guma Valley Water Company, National Power Authority (NPA), Sierra Leone Airports Authority (SLAA), Sierra Leone Road Transport Corporation (SLRTC), Sierra Leone Postal Services (SALPOST), Sierra Leone Telecommunications Company (SLTC) and Sierra Leone Ports Authority (SLPA) as those state enterprises that are plagued with poor management.
According to the Management of Rokel Bank, the Minister averred, the increased competition in the Banking Sector has considerably reduced the income base of the Bank; thus making it difficult for the institution to meet its projected income base of Le 11.3 billion for the 2008 financial year.
The Bank, the Minister said, made Le4.4billion in the first six months of 2008; compared to the projected Le 6.3 billion in the second half of the year.
For the SLCB, the Minister pointed out that they may earn a profit in 2008 after a very challenging 2007, as their pre-tax profit as at August 2008 amounted to Le 7.1 billion compared to a projection of Le 5.1 billion. The Bank achieved a 21% growth in customer deposit representing a market share of 32% in 2008; whilst lending to small and medium sized business concerns increased to Le 125.5billion in 2008 from Le 99.4 billion in 2007. The Minister however observed that the balance sheet of the Bank remains weak given its level of loan loss provisions and its contingent liabilities which is a cause for concern.
With reference to NIC, the Minister observed that despite their premium income forecast profit of Le 780 million, which represent an increase of 64% over the profit recorded in 2007, the company is challenged by the high volume of outstanding premium.
Lotto, according to the Minister, made a loss of Le136.9Million in the first quarter of 2008 compared to a projected profit of Le360.8Million; but the company projects an after tax profit of Le794.9 Million for 2008.
David Carew further highlighted that the financial arrears in the sum of Le760 million owed to Guma greatly improved their financial position.
He however said the company faces inadequate storage facilities, indiscriminate cutting of pipes and aged distribution network.
With regard to NPA, the Finance Minister explained that following the establishment of the emergency power programme, electricity generation increased from 5MW in 2007 to an estimated 25MW in 2008. As a result of that, he continued, revenue collection improved from Le1.0billion per month in 2007 to Le3.0billion per month in 2008.
This notwithstanding, NPA’s financial performance remains weak stemming mainly from technical and commercial losses making it impossible for NPA to recoup its recurring expenditure as at the end of August 2008; total expenditure is estimated at Le 90.7billion resulting in a net operating loss of Le3.1billion.
With SLAA, the Finance Minister said the total income earned for the eight months ending August 2008 amounted to Le13.9billion, as to the Le17.5billion projected and the net operating profit of Le700million recorded was far less than the projected profit of Le2.4billion; whilst continuing to accumulate huge liabilities in the form of tax arrears estimated at Le6.3billion with an outstanding NASSIT contribution amounting to Le290million as at the end of August 2008.
For SLRTC, despite they are not requesting for subvention from government for two years, they were unlikely to achieve the revenue forecast for 2008 due to the poor state of the road network. Revenues are declining at SALPOST, he said, as they continue to face very high operating costs, high level of indebtedness and inadequate investment. SIERRATEL has been engaged for the past six months in streamlining their operations and improving infrastructures, the Minister said.
The SLPA, according to David Carew, made a loss of Le1.14billion during 2007 but made an operating profit of Le2.1billion in the first half of 2008.
By Ishmael Bayoh