Privatization: A Sierra Leone Case Study


  1. The brutal civil war in Sierra Leone caused by bad governance, the struggle over Sierra Leone’s diamonds and other determining factors associated with it, resulted in the Revolutionary United Front (RUF) rebel forces of Corporal Foday Saybana Sankoh declaring a guerilla war on March 23rd 1991. Sankoh’s forces invading Sierra Leone from neigbouring Liberia resulted in one of the worst human rights violations in the world.

    Among the most alarming trends in the armed conflict was the destruction of government institutions in the country.

    Before the decade civil war – in the early 90s the government of Sierra Leone owned about forty-four public enterprises essentially covering virtually all sectors of the economy.

    Though these enterprises provided employment and source for government revenue through tax and other emoluments, the performance of most of them was unsatisfactory. It was against this background that the government initiated the Public Enterprise Reform Program in 1993 by enacting the Public Enterprise Reform Act, which established the Public Enterprise Reform and Divestiture Commission PERDIC – to carry out the privatization process.

    Though PERDIC was bedeviled with a lot of problems which would later result in the subsequent transfers of its functions to the Public Enterprise Unit in the Ministry of Finance, 14 out of the 44 private enterprises were successfully diverted, or in other words privatized. However, most of the relatively larger Enterprises remained under government control and are currently perceived to be a liability on an already cash strapped government.

    With the official declaration of the end of the ten year armed conflict in 2002, the government of Sierra Leone resumed the process of privatization by approving the implementation of a strategic plan for the divestiture of state enterprises. In this regard, the government establishment the National Commission for Privatization (NCP) in 2002. In 2003, an Act of Parliament was passed, authorizing the NCP, among other responsibilities to “undertake the privatization and reform of private enterprises.”

    Mr. Cyril Juxon-Smith, Public Relations Officer of the NCP in a recent interview with this writer said that the Commission was established by the Sierra Leone government to serve as “a bridge to prosperity.”

    Juxon-Smith described privatization as “a significant part of the government’s overall strategy for national development”.

    “Even though privatization was bound to improve the economy in terms of efficiency, the policy is not a panacea,” he said and noted that the project can be essentially good if it is well managed.

    He reiterated the rationale behind the privatization drive, which he said is to restructure economic enterprises in the private sector for reliable growth, thereby lessening the burden on government.

    Giving an analysis of the 24 State Enterprises undergoing privatization he categorized them into nine groups as follows: utilizes financial institutions, transport and shipping, agriculture, manufacturing, information services, housing and leisure. He however did not target the lease of hotels during the first phase of the process.

    On the whole, he affirmed that the successful implementation of the process will result in the redefinition of the role of the state in the economy.

    Mr. Juxon – Smith stated that the process will include the following aspects: Joint Ventures, Sale of Assets, Leasing, Liquidation, Franchise, Concession and Management Restructuring.

    The enterprises listed for privatization include the Sierra Leone Road Transport Corporation (SLRTC), Sea Board West Africa-Flour Mill, Government Printing Department, Sierra Leone Shipping Agency, the Sierra Leone Broadcasting Services, the Sierra Leone State Lottery, the National Workshop, Daily Mail, the Sierra Leone Produce Marketing Board (SLPMD), the Sierra Leone Housing Corporation, the National Insurance Company, Sierra National Airline, Rokel Commercial Bank, National Development Bank Ltd, Mining and General Services (MHGS) the Sierra Leone Commercial Bank, SIERRATEL, National Power Authority, the Sierra Leone Airports Authority, the Sierra Leone Port Authority (SLPA), Guma Valley and the Sierra Leone Postal Services (SALPOST).

    From interviews conducted by this writer with numerous stake holders on the subject, the general consensus shows that people have mixed feelings with the privatization drive.

    James Sesay, a final year students in the Finance and Accounting Department of Milton Margai College of Education and Technology (MMCET), stated that although he favors privatization, he however complained that the only obstacle was the “poor salary and wage structure”. “Otherwise privatization improves the economy and provides jobs.

    Zainab Koroma a business woman in an interview also favored privatization, naming efficiency and a chance for more money in the market as it will create foreign investment, employment opportunities and better wages for workers.

    A diplomat from U.K residing in Sierra Leone argued in favor of privatization in general. He however observed that “water will not be easy to privatize”. He described the venture of privatizing water as “a political suicide, noting that generally and especially for the poor, “water is a gift from God” which the people will never be ready to pay for.

    An employee of Ports Authority also agreed with the move to privatize public services arguing that by privatizing GUMA the service might be improved. He was however quick to recommend that the street taps should be maintained and that any person caught damaging the pipes supplying water should be severely punished.

    Hawa Kallon, who resides at an area where there is no access to pipe borne water said that residents in the area have to buy water for their domestic use. She observed that privatization was not the problem; rather, the service of affecting it is the challenge.

    A BBC radio skit defined privatization as “a global sell off of state owned industries, which used to provide public services for the people to private enterprises to make profit. The skit further observed that privatization par se, does nothing for the public except for the investment bankers and politicians.

    The skit maintains that “life is a market place” and the question being asked is that once the private companies have taken over, will they run the services for both profit and the people. In Sierra Leone general privatization is about the transfer of government ownership of public services to private ownership or partnership with private enterprises to enhance the role of the private sector in the economy.



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