JUNE POLITICAL ROUND-UP - FREETOWN

C O N F I D E N T I A L FREETOWN 000256

SIPDIS

DEPARTMENT FOR AF/W (JHUNTER)

E.O. 12958: DECL: 07/02/2019
TAGS: PGOV PREL SL
SUBJECT: JUNE POLITICAL ROUND-UP - FREETOWN

Classified By: Political Officer Amy LeMar for reasons 1.4 (b/d)


1. (U) Summary: Despite steps forward to improve the
investment climate of the country in June, a violent incident
targeting a U.S. company (and Embassy contractor)
demonstrated that such improvements have not trickled down to
the local level. Parliament updated laws inherited from the
Colonial era, with a focus on making the country more
investor-friendly enacted three new laws. President Koroma
basked in his popularity while traveling to the South of the
country - an area previously hostile to the APC. The Freetown
City Council accelerated its revenue collection drive, and
continued a city sanitation project that threatens the
livelihoods of Freetown's poorest. A price hike in fuel
raised concerns across the country, but the government is
remaining mute on the possibility of a subsidy. Sierra Leone
continues to enjoy further bilateral support from India,
Libya, and the UAE. End Summary.

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USG CONTRACTOR TARGETED BY CITY COUNCIL
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2. (C) SSGI-AKAL, the U.S.-owned company contracted by post
to provide local guard force service, was targeted by the
Freetown City Council for allegedly not paying a municipal
operating license fee. The SSGI-AKAL compound became overrun
with members of the City Council, police attached to the City
Council, and press. Despite their failure to produce
documentation showing the amount owed, members of the City
Council stated that they would shut down all operations if
the payment was not immediately made in cash. Given the
impact this would have on embassy security, RSO contacted the
Inspector General of Police, who assisted in ameliorating the
situation. Control of the crowd and compound was eventually
restored, though the ARSO and others suffered minor injuries
during the scuffle. Comment: The Freetown City Council
apparently has no jurisdiction over SSGI-AKAL, but likely saw
the U.S.-owned company as a good target for shoring up
additional revenue. Post sees this incident as a typical
extortion attempt, and expects the Council did not anticipate
the high-level of embassy involvement that would result. CDA
spoke with the Director-General of the Ministry of Foreign
Affairs, and will also inform the President that such rogue
activities are deleterious to the investment climate and our
bilateral relations. In response, the Director-General
inquired about a visa denial related to the Mayor of
Freetown, who oversees the City Council. It was clearly
implied that the Mayor may have ordered this attack to send a
message that he can impact USG operations as easily as we can
prevent his family from traveling. A subsequent meeting with
the Mayor on July 1 failed to clarify his position or
interest in either the visa case or the June 26 incident. End
Comment.

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PARLIAMENT ENACTS THREE NEW LAWS
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3. (U) On June 3, Parliament enacted three key laws
(Companies Act, Goods and Services Act, and Bankruptcy Act)
that will remove some of the administrative barriers for
doing business in the country. The Companies Act makes
provision for the establishment of a Corporate Affairs
Commission to register companies, rather than the
Administration General. The Bankruptcy Act establishes
regulations surrounding bankruptcy declaration: any person
can be declared bankrupt if s/he is unable to pay debts.
Those filing for bankruptcy will be disqualified from holding
any elective or public office. The Goods and Services Tax
establishes the long-awaited tax, though many fear that it
will not be implemented for some time. Comment: These laws
should assist in luring foreign investment by eliminating and
regularizing the process of establishing businesses and
providing further protections for business owners. Post will
report on these laws in-depth septel. End Comment.

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PRESIDENT KOROMA TOURS THE SOUTH
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4. (U) President Koroma, enjoying and savoring every moment
of his popularity, traveled to the southern region of the
country on his "meet the people" tour. Southern Sierra Leone
has traditionally been the stronghold of both the SLPP and
the PMDC, and Koroma's venture shows his confidence and
desire to increase APC popularity at a time when his own is
quite high. According to reports, he was received by large
crowds of people everywhere he went. He had SLPP and PMDC
members address the crowds with him at every event, in a move
hoped to ameliorate the constant inter-party tension that is
always marred by violence. In Bonthe, a former SLPP Member of
Parliament officially declared for the APC, in part
demonstrating the APC's growing strength. Comment: Koroma's
tour coincides with the absence of SLPP Party Chairman John
Benjamin, who is currently in the U.S. The timing may have
been planned to ensure that Benjamin and his cronies would
not disrupt either the President's agenda or his deliberate
displays of political unity. The APC party appears to be
gaining ground outside of its traditional support base, with
this tour helping that ambition. End Comment.

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FREETOWN CITY COUNCIL TAXES AND CLEANS
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5. (U) President Koroma was the first person to pay his local
tax for the year to the Freetown City Council on June 9. Tax
collection in Sierra Leone is a highly irregular process, as
there is no system to properly collect or document payments.
Last year's tax collection drive was met with resistance by
many citizens who were unaccustomed to paying, and resulted
in many embarrassing arrests. The city Council also embarked
on "Operation Sweep Freetown" to rid the city of shacks. Many
make-shift markets were demolished and plans are underway to
build formal markets for the traders. If this happens, it
will be a major breakthrough in sanitizing the city and
reducing the traffic jams which are partly caused by hawkers
and traders who have completely taken over the pavements,
forcing pedestrians to walk on the streets. Comment: Though
tax collection is expected to run more smoothly this year,
"Operation Sweep Freetown" has been controversial. Though the
traders have no legal land rights for their shacks, many have
operated from them for some time. Destroying the shacks,
without a ready alternative, has angered those already living
on the streets. Further alienating this largely
under-employed group could result in violent stand-offs in
the future. End Comment.

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HIKE IN FUEL PRICE
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6. (C) On June 4, oil suppliers unexpectedly increased the
cost of fuel. They cited the exchange rate to the U.S. dollar
and world market prices as the reason for the increase.
Prices increased from Le 12,500 (USD 4.00) to Le 14,800 (USD
4.80) for petrol, diesel and kerosene. The prices for all of
these products are always the same in Sierra Leone to prevent
unscrupulous people from mixing cheaper products with the
relatively more expensive ones. Consumers were unhappy with
the increase, which has a near universal impact due to the
reliance on generators, but were assured by the oil marketers
that they will adjust the price as the global price trends
dictate. Comment: The GoSL acted on a previous hike in
December, 2008, by subsidizing fuel costs. Despite the
goodwill gains the government received from this action, they
did not respond to the June price increase. In all
likelihood, they could not afford to. End Comment.

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BILATERAL RELATIONS
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7. (U) The United Arab Emirates Foreign Minister, Sheikh
Abdullah Bin Zayed Al Nahayan, led a twenty-three man
delegation to Sierra Leone. The group included Government
Ministers, humanitarian groups and investors. Minister
Nahayan promised prompt assistance in the area of finance,
expertise and energy. On his arrival on June 1, President
Koroma engaged him in extensive talks on strengthening
bilateral relations between the two countries. Sierra Leone's
Foreign Ministry said that the visit of the UAE team was due
to extensive efforts by their office and trade commissioners
in the Gulf Cooperation Council. Comment: Relations with the
Arab world is particularly significant for this government:
some people thought that President Koroma's Christian beliefs
would making wooing Middle Eastern countries difficult.
Former President Kabbah had very strong ties in that area.
End Comment.


8. (U) The government of India donated 385 tractors to the
Ministry of Agriculture and Food Security. The Minister of
Agriculture, Dr. Sam Sesay, said 120 tractors will be used to
plow inland valley swamps, which are the most productive. The
minister further pointed out that the tractors come equipped
with harvesters and threshers that can be used for
export-oriented production. Comment: Food security is one of
the priorities of the Koroma government, and he chairs a
Presidential Task Force on Agriculture. Sierra Leone used to
export rice and palm oil in the seventies but bad governance
and poor administration resulted in a sharp decline in
exports and the eventual stoppage of these activities. End
Comment.


9. (U) On June 18, Minister of Foreign Affairs, Mrs. Zainab
Hawa Bangura officially handed over an 8.2 acre piece of land
in Aberdeen to the Libyan government. The land will be used
for the construction of a five-star hotel, overseen by The
Libyan African Investment Company. Comment: Before the war,
Sierra Leone enjoyed a high influx of tourists, predominantly
from France. Sierra Leone still lacks the amenities that will
make it a sought-after tourist destination, but a hotel of
this nature will create jobs and also help provide some of
the infrastructure the country desperately needs. End
Comment.
FEDZER