PRESIDENT LAYS OUT SIERRA LEONE'S DEVELOPMENT

UNCLAS SECTION 01 OF 03 FREETOWN 000216

SIPDIS

DEPARTMENT FOR AF/W (JHUNTER)

E.O. 12958: N/A
TAGS: ECON EAID PREL PGOV SL
SUBJECT: PRESIDENT LAYS OUT SIERRA LEONE'S DEVELOPMENT
PRIORITIES


1. (U) Summary: On May 19, President Koroma presented his new
poverty reduction strategy, the "Agenda for Change" focusing
on four priority sectors: Power and Water Upgrades;
Agricultural Output; Transportation Networks; and Human
Development (Education and Health). President Koroma noted
that his plan could only be implemented with significant
donor assistance in a secure and stable environment. He
explained that Sierra Leone must act now to dramatically
increase the economic growth rate; if the rate remained
unchanged it would still take 14 years just to reach one
dollar/day/person. Finally, he wanted his donor partners to
spread the message that Sierra Leone is "open for business,"
and seeking private investment. End Summary.


2. (U) President Koroma personally launched Sierra Leone's
second poverty reduction strategy paper, labeled the "Agenda
for Change," in a meeting with development partners and
ministers May 19th. Ministers gave powerpoint briefings on
their areas of responsibility; sources reported that the
ministers rehearsed their presentations extensively.
Priority will be placed on Energy and Water, Agriculture,
Infrastructure, and Human Development, and the President
called on donors to: align foreign aid to Sierra Leonean
priorities; work with Sierra Leone to expand donor base to
non-traditional countries like Brazil and India; honor
existing commitments and scale-up where needed; shorten the
duration between commitment and disbursement without
compromising fiduciary standards


3. (U) Koroma assured donors that efforts where in place to
strengthen government and mobilize resources within the
country, contributing to building momentum for the Agenda. He
also mentioned restructuring the National Revenue Authority
(NRA) and implementing a Value Added Tax (VAT).

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Energy and Water
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4. (U) The Agenda noted that power and water are key to
development and to securing public and private investment,
and the Ministry proposed construction of two dams, a new
power station, and expansion of an existing power station at
a cost of $600 million. The Ministry intended to improve the
governance and regulation of both the energy and water
sectors, formulate an integrated policy approach for energy
and water and enhance the enabling environment for public and
private participation. A number of hindrances remain: less
than 10% of the population has electricity; institutional
roles are unclear and uncoordinated; there are significant
capacity constraints; power transmission and distribution
networks are old and/or damaged; half the population has no
safe drinking water.

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Agriculture
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5. (U) Agriculture is the backbone of the Sierra Leone
economy. Currently, agriculture's share of GDP is 45% and
accounts for 1/4 of export earnings and employs 2/3 of the
population. The Ministry intends to increase agricultural
productivity, promote private sector operations, improve
research and extension service delivery, promote effective
and efficient resource management, and mainstream
cross-cutting issues such as gender, youth, farmer health and
environmental sustainability. Key challenges to achieving
goals include inadequate and untimely financial support, weak
rural infrastructure, and slow response to the effects of
global rising food prices. To address these agricultural
issues, the Ministry proposes the following: implementation
of an Irrigated National Rice Development Program,
improvement of rural livelihoods through integrated
commercialization of cassava, rice and other crops, and a
market-oriented forestry and tree crop production system.
Total cost for these projects is estimated at USD 475.5
million.

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Transportation Infrastructure
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6. (U) Sierra Leone requires a reliable transportation
network to move goods and people and facilitate investment
and economic activity. Currently, rural and feeder roads are
inadequate and poorly maintained. Inland waterways connecting
villages and farming areas to market centers are also
woefully inadequate. The Transportation Ministry is proposing
construction and rehabilitation of 523km of trunk roads,
1500km of feeder roads and 250km of roads in major towns,

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upgrading the infrastructure of and access to Lungi
International Airport, and rehabilitation and construction of
coastal and inland waterways including dredging. The total
projected cost is USD 801.45 million.

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Human Development
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7. (U) The Education Ministry proposes achieving universal
primary education and completion, increasing access to higher
education, skills training and literacy, implementing
programs for early childhood care and pre-school
opportunities, and providing improved governance, planning
management and leadership within the Ministry. Key challenges
include an inadequate number of qualified teachers and the
poor provision of science and computer laboratories,
libraries, and Internet facilities. Proposed projects
included increased access to market-driven
technical/vocational training and higher education for women
and unemployed youth (USD 5 million); enhanced teaching of
science and technology through construction and equipping of
20 science and computer labs throughout the country (USD 5
million); provision of technical assistance to tertiary
education institutions for lecturers to undertake refresher
courses (USD 2.5 million); and construction of two lecture
halls with modern equipment in each of the five Teacher
Training Colleges and in the two Universities (USD 5
million).


8. (U) Youth unemployment is a grave concern; currently, less
than 20 percent of the youth population is covered by ongoing
youth employment opportunities. Sierra Leone intends to
establish a Youth Commission and expand current programs (USD
1.5 million); establish sporting complexes in the Provinces
(USD 10 million); promote youth employment and leadership
through training and education (USD 4 million); create
opportunities for young people to participate in national and
international sporting competitions; and address youth drug
abuse, violence, crime and HIV/AIDS.


9. (U) The Health Ministry proposes to increase the
availability and accessibility of safe drugs, ensure that 90
percent of all drugs reach health facilities, ensure health
care facilities include working equipment, electricity, and
running water, improve child health by full immunization of
74 percent of children under a year old; ensure children
under the age of 5 that present symptoms of fever receive
appropriate treatment within 24 hours; and improve maternal
health by increasing the number of women delivering at health
care facilities and increase the number of cesarean sections.
Priorities include the implementation of a Reproductive and
Child Health program as an entry point to strengthen service
delivery systems (USD 72 million); reduce illness and death
associated with malaria through increased bednet coverage and
access to effective treatment (USD 32 million); establish a
credible health information system to ensure effective
management of health programs (USD 2 million); and salary and
incentives to ensure that health care workers are
appropriately remunerated (USD 27 million).

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Resource Management
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10. (U) Initial costs for implementation of the Agenda for
Change is USD 1.9 billion. Despite positive growth prospects
for the country, additional resources will be required to
meet the total cost. The USD 850 million shortfall breaks
down as follows: USD 161 million deficit for electricity; USD
150 million deficit for transportation; USD 160 million
deficit for agriculture; and USD 198 million deficit for
human development. The Agenda included the following
mechanisms to ameliorate the shortfall:

--Expanding the domestic revenue base to include: (a)
transfer of off-budget funds to a Consolidated Revenue Fund,
improving efficiency in both tax and non-tax collection; (b)
improving efficiency in both tax and non-tax collection; (c)
targeted investments to boost critical growth sectors; (d)
implement NRA Modernization Plan; (e) implement the Goods and
Services Tax (GST); (f) minimize tax incentives and holidays;
and (g) review mining contracts.

--Targeting nontraditional donors and the private sector for
aid and investment support by: (a) expanding the
non-traditional donor base to countries such as Brazil and
India; (b) maximizing benefits of Private Sector
Participation; (c) exploring Carbon Trading Potential; (d)
improving Sierra Leone's Country Policy and Institutional

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Assessment (CIPA); and (e) improving the Doing Business
ranking.

--Strengthening Public Financial Management (PFM) and aid
coordination by: (a) implementing an integrated PMF reform
program; and (b) developing and implementing an aid policy to
enable government to take the lead in aid management by
clearly defining roles and procedures and improving
transparency and reporting.

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COMMENT
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11. (U) The format for the Agenda for Change presentation
resembled a private sector stockholder's meeting, reflecting
the President's intent to import the lessons he learned from
decades in the insurance business into Sierra Leone's
governmental process. This is a positive change, but may not
be enough to overcome the reality that GoSL resources to
implement the Agenda are either finite, or absent altogether.
Post is encouraged that the GoSL recognition of this obstacle
is more than theoretical, and implementing legislation (the
GST is one example),is already beginning to pass through
Parliament. Better revenue collection is important, but
Sierra Leone still requires substantial donor funding and
private investment before it can turn the economic corner.
End Comment.
FEDZER