By Sayoh Kamara
The Ministry of Finance and Economic Development has commissioned Standard Chartered Bank Sierra Leone Limited to formulate and assist in the implementation of a credit rating strategy aimed at giving Sierra Leone the opportunity to access the global capital credit market.
The presentation event at the ministry’s conference hall yesterday, Thursday March 13, was described by the Minister of Finance and Economic Development, Dr. Kaifala Marah, as “very important”.
He said the exercise will lay the foundation for the realization of the ‘Agenda for Prosperity’, which he also described as “an ambitious project” as it requires funding estimated at US$2 billion. “It is ambitious because it sets the basis for the President’s determination and commitment to transform Sierra Leone into a middle income country by 2035, even though government has been advised to streamline this objective with what has been stipulated by the United Nations development agenda,” said the Finance minister.
Dr. Marah noted that for Sierra Leone to achieve that objective, “things will have to be done differently, away from what used to be business as usual”. He said the country should be able to raise funds through the global capital market such that it can undertake development programmes in fulfilment of its obligations to its citizens.
He disclosed that Standard Chartered Bank has been asked to work with the government to formulate and assist in the implementation of a credit rating strategy tailored on the country’s needs, to cover the entire credit cycle including the annual review, periodic agency updates and ongoing strategic communications work. He maintained that the higher prospects of the country’s rating will depend on its governance systems considering access to justice, human rights, freedom of expression and the press, etc, noting that the lower these are ranked, the lower will the country’s prospects be.
The minister therefore noted that the meeting, attended by various ministries, departments and agencies (MDAs) to include the Ministers of Agriculture, Forestry and Food Security, Labour and Industrial Relations, the Secretary to Cabinet and a host of others, symbolizes the significance of collaboration in governance. He maintained that “each and every player within government should be involved in the credit rating process so that at the end of the day, we will be credited higher and our opportunities as a country will be greater”.
He called the credit rating exercise “a tall order” being that it requires government opening its books, but that it will be a demonstration of the country’s adherence to transparency and accountability and a determination to move forward. He therefore clarified that even though the country is already exposed to several other rating processes, including the Millennium Challenge Cooperation (MCC), the Extractives Industries Transparency International (EITI), the MO Ibrahim Index, and now the Sovereign Credit Rating, each has its own specific reason and set indicators of which the rating country has a choice.
The Sovereign Credit Rating singularly gives opportunity for a country to raise funds from the global capital market away from funds generated locally, which might mostly not be enough to meet government’s development agenda.
According to the Finance minister, the exercise is very significant for the country’s forward march to prosperity, stressing that it will help the country attract potential credible investments and direct access to funding opportunities. He therefore called for a consolidation of government related information and encouraged the participation of the private sector as part of the consolidation process. He said: “It is either we do it now or we wait. If we postpone it, it will mean we are delaying our national development agenda.”
The presentation was done by Ms. Catherine D’Yvoire of the SCB Rating Advisory Team. She said the rating will tell Sierra Leone’s story, its positive economic, infrastructural and governance successes as a post-conflict country.
She said they take qualitative and quantitative factors into consideration, and that MDAs are expected to provide data to the rating agency on a regular basis. The debut rating process is expected to last for 12 weeks following receipt of data on every aspect of government’s activities.