Analysis

The Truth About Foreign Aid in Sierra Leone

21 December 2006 at 23:29 | 672 views

"It is a testament to the depth of the hole from which our country has to climb that, here we are in the 21st century and the latest SL government still trumpets with clueless delight the most recent announcement of yet another foreign "aid" package from its undoubtedly well-meaning benefactors — the very same, mainly Western, entities which have massively impoverished millions of S/Leoneans during the last three decades through the unwitting agency of their own blissfully derelict government."

By Mohamed A. Jalloh (USA)

If there were an annual global prize for governmental cluelessness, the perennial record holder would undoubtedly be a government from the long list of desperately poor African countries. Sadly, the successive governments in SL since 1967 would be the prohibitive favorite for the annual honor of the most clueless on earth.

It is a testament to the depth of the hole from which our country has to climb that, here we are in the 21st century and the latest SL government still trumpets with clueless delight the most recent announcement of yet another foreign "aid" package from its undoubtedly well-meaning benefactors — the very same, mainly Western, entities which have massively impoverished millions of S/Leoneans during the last three decades through the unwitting agency of their own blissfully derelict government.

Whether it is debt relief for SL from the Paris Club, or a grant from the World Bank, the government of SL never bothers to ask a crucial question before leaping for joy at its imagined windfall — is this really aid and does it represent the best way to develop SL?

In my humble opinion, had our successive governments back home ever asked that question, the last thing on their minds would be songs of praise and appreciation for their perceived benefactors. In testament to the truism that not all S/Leoneans are as clueless as their own government, let us now proceed to do a small part of the SL government’s piling homework for it. We shall do so by posing that key question in regard to one of the latest manifestations of "aid" to our country — the World Bank grant of $10 million.

According to the World Bank, "[t]he grant is designed to provide quick disbursing support to the Government’s 2006 budget in a single tranche." In simple English, the Bank is giving the SL government money that it can spend immediately.

Had the World Bank left it at that, it would not have opened itself to the eminently valid charge of cynically making a fool of the SL government, yet again, by getting it to actually thank the Bank for handing it crumbs left over from the Bank’s (and its cohorts’) massive feasting on SL’s resources. But the Bank made the additional claim that it was doling out the $10 million to help develop our country, namely.

"The grant will contribute to economic recovery and growth by: (1) providing foreign exchange resources for imports of essential commodities, (2) providing financial resources to the Government budget to finance priority public expenditures, (3) supporting reforms to attract private investment and (4) contributing to maintaining macroeconomic stability and low inflation, thus helping to close the financing gap in 2006."

Which raises a significant question: Is the provision of a mere $10 million (or similar) grants to the SL government the best means available to the World Bank to contribute to the improvement of the ability of the SL government to pay for essential imports, as well as services to millions of impoverished S/Leoneans, etc.? In short, is the delivery of such grants the best the World Bank can do to alleviate poverty among S/Leoneans? As anyone who is familiar with the belated self-admission of failure in Africa by the World Bank knows, the unequivocal answer to that question is: No. As always, let us go to the evidence.

According to the IMF Country Report for SL (No. 04/420 of December, 2004), SL’s imports totaled $303.7 million in 2003. In the same year, SL’s exports totaled a mere $92.4 million. Therefore, in 2003, S/Leoneans spent more than three times more foreign exchange than they earned — compared to a much worse performance the previous year, when the country spent more than five times more foreign exchange than it earned ($264.3 million in imports v. $48.6 million in exports), a situation that the SL government could (and did) blame on the 1991—2002 "civil war."

All other things being equal, the SL government massively dug itself deeper into debt in 2003 alone — by a staggering $211.3 million ($303.7 million in imports minus $$92.4 million in exports to pay for them). This is not an academic figure. On the contrary, it is real money that the SL government would have to pay foreign entities, comprising mainly Western countries and their surrogates, the World Bank and the IMF, as well as another of SL’s biggest creditors, the Paris Club.

In order to understand the folly of the SL government rejoicing excessively whenever the World Bank, the IMF, the Paris Club, or other Western entities announce debt relief or other forms of so-called aid for our country, it is sufficient to understand how that debt came into being, in the first place — through the catastrophic, carefully disguised gigantic Western robbery of millions of S/Leoneans that is otherwise known as devaluation. I have detailed that massive fraud and its preeminent role in the escalating, searing poverty of millions of S/Leoneans in many of my published articles.

I will close with a sobering thought that should put into proper perspective the even more cynically trumpeted recent "aid" from Western countries to our hapless country — the $215 million the European Union (EU) announced three days ago it intends to provide as "development aid" to SL over the next two years.

Consider this: That "aid" to SL from the EU represents $107.5 million a year — about half of the unacknowledged aid that SL involuntarily gave to the mainly Western countries in 2003 when, as noted above, SL’s needlessly inflated high-priced imports compared to its exports resulted in the increase of SL’s debt to mainly Western entities by a staggering $211.3 million in a single year!

And yet, sadly, the perennially clueless SL government dutifully rejoiced at the EU’s perceived generosity, while it remained blissfully ignorant of the fact that said "generosity" actually represents only a cynical partial atonement for the far greater theft of SL’s resources over the past thirty years by the very same Western culprits it regards as its benefactors!

2006 Mohamed A. Jalloh

About the Author:
Moh’m Jalloh(photo), who is a Sierra Leonean resident in Maryland, USA, is licensed by the U.S. Securities and Exchange Commission (SEC), which oversees the stock market in America, as a General Securities Principal. He is the founding Managing Director of Bridgedal Capital Management, LLC, a financial services firm in suburban Washington, D.C., as well as regional manager of Synergy Investment Group, LLC, in Maryland.

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