Sierra Leone: trade and investment forum, a post mortem

Sierra Leone: trade and investment forum, a post mortem

by / 15 Comments / 140 View / 2nd December 2009

Sampha and Parpin signing the $5M deal 2It is not difficult to see who the winners of the recent Sierra Leone trade and investment forum were. James Sampha Koroma, for example was the single highest beneficiary of the two-day trade and investment forum, signing a $5 million business deal.

The forum was held this year in London on 18th – 19th November. In analysing its success we will continue to look at the winners and losers of the forum.

Clearly, some people, such as James Sampha Koroma were the big winners. But who were the losers? When we tried to question the Government of Sierra Leone (GoSL) regarding the extravagant shindig, we waited over a week and received no response, and no answers to our questions.

The forum was organised to encourage investment into the country. The event however, seemed rather more to do with the vainglories of some individuals, showing their influence both within and outside of government while at the same time advancing their political ambitions and benefiting financially from the exercise.

One of the individuals in question, James Sampha Koroma – a businessman and former secretary to the country’s president – signed a lucrative deal through his union trust bank (UTB) with a fund linked to hedge fund billionaire George Soros.

Soros’ economic fund vice president Stewart Parpin was quoted as saying that they are very happy with the investment and that they will invest ‘five million dollars in a combination of debt and equity’ into Koroma’s bank. He added that they are also creating a credit line to make sure the bank has adequate funds to expand their small business lending.

Koroma has since added some clarity to the partnership by explaining that the $5 million involves $2.5 million in equity and $2.5 million in credit facility for small and medium-sized enterprises (SMEs).

According to NAA sources, the Forum was first and foremost Koroma’s idea, along with Zainab Bangura, the foreign minister. A growing putative and maturing political alliance has been developing between the two.

Sampha Koroma has a bone or two to pick with the president for sacking him as his ‘number 3’, while Zainab continues to nourish her presidential ambitions.

Bringing George Soros, Tony Blair et al and other business interests together, the point of the forum was to demonstrate to the president the influence they have internationally and at the same time extend their contact portfolio for future political needs.

The forum can be seen to have had some achievements. There was $5 million of investment towards Koroma’s project, as well as another $5 million for equity investment from CDC, the capital for development group which describes itself as a UK government owned fund of funds. The United Arab Emirates (UAE) also promised investment, but nothing firm, or signed and delivered.

In addition, the DFID announced on the day that it was promising to invest in free maternal and child health care costing approximately thirty-five million pounds in five years. This is not new money; whilst the emphasis and priority have changed, it is part of DFID’s continued support to Sierra Leone.

These are investments and announcements that would have gone ahead in spite of where the forum was held.

A Sierra Leonean diplomat summed that idea up by suggesting that the forum could have been held in Freetown and it would have achieved the same effect. Importantly, it would have given the participants the opportunity to see first hand the progress made so far; progress that the GoSL wanted to showcase in the UK.

In contrast, the cost of the forum was estimated to be around five hundred thousand dollars, in today’s rates that is (nearly two billion Leones), which is enough money to pay the monthly salaries of 1,000 junior police officers.

Of this amount, one hundred and fifty thousand pounds went to Bell-Pottinger, a public relations firm that the GoSL contracted to carry out publicity work. Renting of the QE 11 hall where the event was held, food and drinks for two days amounted to approximately forty thousand pounds. The rest of the money was spent on air fares, per diem etc for GoSL officials and their guests.

The GoSL deliberately failed to respond to demands for confirmation of these figures, so did Bell-Pottinger. For a government that bangs on continually over improvements in its governance record, such lack of transparency and accountability is outstanding and speaks volumes about government attitude to public finances.

The success of a trade and investment forum can be measured through the number of investors willing to invest right away, as well as those committing in tangible ways to invest in the long term. The amount invested is also a huge factor.

It might be difficult to judge the success of the gathering in terms of long term inward investment because, as mentioned in a previous piece future inward investment in to the country will depend on a few factors including improved security, the rule of law, energy and other provisions all of which will take time to manifest.

However, given the amount spent and taking into consideration what was achieved, it is safe to say the forum was not money well spent given the fact that it could have been done in the country, which could have saved hundreds of thousands of dollars. A pathetic waste, but who cares?

Finally, Tony Blair would have attended the forum if it was held in Freetown where he would have spent more time longer than the 10 minutes he spent at the forum in London; five minutes for his speech and another five sitting close to the president for the cameras before shooting off to other serious matters.