By Mohamed Jaward Nyallay
Four state owned enterprises are to receive a bailout package totaling Le15 billion, according to the supplementary budget for the 2020 Financial Year.
The four enterprises that will benefit from the bailout are, according to the document presented to parliament by Minister of Finance Jacob Jusu Saffa last week are the Sierra Leone Civil Aviation Authority (SLAA), Sierra Leone Airports Authority (SLAA), Sierra Leone Road Transport Corporation (SLRTC) and the Sierra Leone Postal Services (SALPOST).
The bailout is part of the government’s Quick Action Economic Response Program (QAERP) that was designed to respond to the economic impact of COVID-19 on the country.
Speaking about the significance of the QAERP, Saffa said: “The overarching objective of the QAERP is to maintain macroeconomic and financial stability as well as to mitigate the impact of COVID-19 on households and businesses.”
The supplementary budget, which was presented to the House on Friday July 24, has since been approved by lawmakers.
The aviation industry has been one of the worse affected sectors globally. In April this year, the International Air Transport Association (IATA) estimated that the sector will lose more than half of its 2019 passenger revenues, costing it some US$314 billion as result of COVID-19.
In Sierra Leone, sources told Politico that the Airport Authority has lost Le 9 to Le10 billions already, due to the closure of the airport to commercial flights in March this year. The airport was reopened on Wednesday July 22, after the government rethought its Covid-19 measures.
It is difficult to know how much jobs have been lost as a result of the halt in the aviation sector. But a spokesman for the SLCAA, Cyril Barnes, said the effect of the pandemic on the sector is something they have never experienced before and that the consequences have been far reaching.
“In Sierra Leone we have direct and indirect impacts, the government of Sierra Leone from March to now has already lost Le20 billion in taxes from the aviation industry. The indirect impact has been the job losses. Up to 1000 jobs have been lost; we have more than 45 travelling agencies and each of them have 5 to 10 staff. If you multiply this number then you are talking about 200 to 250 jobs alone,” Barnes, who is the Public Relations Officer of the SLCAA, explained.
“The economic impact on the aviation industry globally and in Sierra Leone is so huge. We have never experienced something like this before,” he added.
The loss in job has also affected water taxi services, hotels, and all other services that are connected to the sector.
The aviation sector was already losing some money even before the COVID-19 pandemic. Goods and Services Tax (GST) was removed by the government by the start of 2020 in a move to boost tourism by reducing the cost of travelling to the country.
In his initial 2020 budget speech in November last year, Saffa said: “All aviation related charges will be exempt from the payment of GST. These include landing and parking fees, aircraft towing, aircraft cleaning, baggage handling, aircraft security as well as aircraft fuelling. The objective is to reduce the cost of travel to Sierra Leone in order to boost tourism and create job opportunities.”
The Sierra Leone Road Transport Corporation manages state owned buses and ply different routes across the country. Much of its revenue was generated from trips to the provinces. But the inter district lockdown meant that for over two months they couldn’t generate income.
The postal service provider, SALPOST, had been struggling even before the Covid-19 pandemic, with most people turning to much more sophisticated cargo delivery companies.
State owned enterprises in Sierra Leone have a history of poor financial management. Figures from the Ministry of Finance show that by the end of 2018 their liability was approximately Le 1.5 trillion.
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