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New President for Sierra Leone

18 April 2018 Chris Suckling, Ph.D.

Newly elected Sierra Leonean President Julius Maada Bio of the ruling Sierra Leone People's Party (SLPP) took office on 4 April. His government faces an opposition-dominated legislature and severe budgetary constraints.

  • The ruling Sierra Leone People's Party's (SLPP) failure to obtain a parliamentary majority indicates that newly elected President Julius Maada Bio is likely to form an inclusive cabinet, thereby helping to avert policy paralysis.
  • The SLPP and the opposition All People's Congress (APC) are likely to agree on proposals for non-mining diversification, which would begin to incentivise foreign investment in the agriculture and tourism sectors.
  • President Bio will face pressure to improve relations with the International Monetary Fund and increase government revenue mobilisation, driving tax reform proposals and anti-corruption investigations.

Newly elected Sierra Leonean President Julius Maada Bio, a retired brigadier general, received 51.8% of the vote in the second round of the presidential election on 31 March, while the All People's Congress (APC) candidate, Samura Kamara, received 48.1%. Bio came first in the first round of voting without an overall majority (see Sierra Leone: 14 March 2018: First-round election advantage for Sierra Leonean opposition candidate raises likelihood of violent protests, oil contract cancellations). In the second round he benefited from improved voter turnout in opposition constituencies dominated by the ethnic-Mende, while gaining votes from supporters of the Coalition for Change, led by former vice-president Samuel Sam-Sumana. Kamara initially stated that the APC would challenge the election outcome in court, claiming the polls were affected by fraud. Kamara subsequently met with Bio on 8 April, after which Kamara conceded and said he would support a new administration. The APC did, however, retain its parliamentary majority in the legislative election, securing 68 out of 132 seats, while the SLPP won 48.

Despite Bio reaching a compromise with Kamara, co-operation with the APC will depend largely on his relations with former president Earnest Bai Koroma. Prior to the election, Koroma had centralised his power over the APC party, cabinet, and military, potentially with a view to continuing for a third term. However, public support for a constitutional referendum to extend term limits in late-2016 was muted (see Sierra Leone: 29 November 2016: Government opposition to draft constitution driven by Sierra Leonean president's strategy to extend term, civil unrest likely) and the government faced allegations of corruption, especially regarding misappropriation of donor funds relating to the outbreak of Ebola virus disease. In response, Koroma changed strategy and garnered support for Kamara as his hand-picked successor, through whom he could then retain political influence.

Consequently, Koroma is likely to seek to re-establish APC's influence over the new government. We assess that Bio would probably appease Koroma by forming a cabinet including both SLPP and APC members, rather than risking policy paralysis if Koroma instructs APC legislators to frustrate the new government's policy agenda. The desire of Bio and Koroma to co-operate already was indicated on 7 April, when they met to finalise transitional arrangements: a deal on cabinet formation would be a key and positive indicator for likely policy implementation.

Budgetary constraints

President Bio stated on 5 April that his administration will aim to increase the proportion of non-iron-ore-related government revenue from 12.2% of gross domestic product (GDP) in 2016 to 20% of GDP during his term. Bio has suggested that improved revenue performance is necessary to fund the SLPP's 'People's Manifesto', especially the promised rollout of universal primary education. However, budget revenues were eroded from 2014 by operational disruption during the Ebola outbreak. Prices for iron ore, the country's highest value export, also significantly declined after April 2014. These factors resulted in the economy contracting by 19.5% in 2015. The previous government forecasted that its recovery strategy would cost USD1.3 billion from 2015 to end-2017. These adverse circumstances expanded the current-account deficit and forced the prior administration to apply emergency austerity measures in October 2016. IHS Markit assesses that the continued strong supply of iron ore to the sea-borne market will prevent prices recovering above USD71 per dry metric ton (tonne) unit before 2020, increasing consensus within government to encourage economic diversification, especially in agriculture and tourism.

Bio's administration will probably delay its education-spending plans in favour of securing continued drawdowns from a USD224.2-million International Monetary Fund (IMF) Extended Credit Facility. This facility was due to be reviewed in December 2017, but IMF representatives stated on 1 February 2018 that this would be delayed until May 2018 owing to weaker-than-expected revenue performance. USD54.3 million was already released in June 2017. For the IMF to restore funding, Bio's government faces the need to review various tax and duty exemptions, or at least demonstrate signs of stronger budgetary oversight and prudence.

Outlook and implications

There exists limited policy differentiation between the SLPP and the APC. Likely co-operation between the former and current presidents should avoid policy paralysis in the APC-dominated parliament in areas such as development of the agriculture and tourism sectors. Agriculture is likely to benefit from a 10% increase in government expenditure, although improvements in domestic production to replace cheaper imports are likely to be slow. However, Bio previously has signalled disapproval of directly allocated petroleum contracts, which now face a greater likelihood of renegotiation or cancellation. Separately, to improve relations with the IMF, Bio would probably enforce the Public Financial Management Act 2016 more strongly, thereby gradually improving budgetary control and oversight. Fiscal revenue pressures also increase the risk that more productive sectors, such as telecommunications, will face arbitrary demands from the revenue authority.

An indicator supporting co-operation between the former and current presidents would be if Kamara (his former role was as foreign minister) or other senior APC members are included in the finalised cabinet. Without compromise between the two parties, Bio is likely to launch an anti-corruption investigation into the alleged misappropriation of the Ebola funding, which would probably extend to an audit of the utilisation of government spending more broadly. Such an investigation would probably motivate APC backbenchers to blame Koroma for undermining the party's reputation in the build-up to the March election, increasing the likelihood that new leadership emerges from within the opposition.


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