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RR RUEHPA
DE RUEHFN #0466/01 3351731
ZNY CCCCC ZZH
R 011731Z DEC 09
FM AMEMBASSY FREETOWN
TO RUEHC/SECSTATE WASHDC 3010
INFO RUEHZK/ECOWAS COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 FREETOWN 000466 
 
SIPDIS 
 
DEPARTMENT FOR AF/W 
 
E.O. 12958: DECL: 12/01/2019 
TAGS: ECON EAID PGOV PREL SL
SUBJECT: SIERRA LEONE STABILITY, PART II: ECONOMY 
 
REF: A. FREETOWN 465 
     ¶B. FREETOWN 135 
     ¶C. FREETOWN 262 
     ¶D. FREETOWN 322 
     ¶E. STATE 109266 
 
Classified By: Political/Economic Officer Amy LeMar for reasons 1.4 (b/ 
d) 
 
¶1. (C) Summary: This is the second in a series of four cables 
that highlights risks to Sierra Leone's security (reftel A). 
The national economy continues to be in a state of woe, built 
on the precarious foundation of a weakening currency, 
decreasing imports and exports, reduced food security, and 
minimal foreign investment. With over-reliance on external 
markets and an underdeveloped financial sector, Sierra Leone 
is poorly equipped to absorb any shocks, and is finally 
seeming to bear the full brunt of the world's economic 
slowdown. Though citizens have demonstrated remarkable 
endurance and patience, a continued slide that diminishes the 
already-meager food on their plates will likely be met with 
anger and protest. Some wonder how much more impoverished 
this country can become, but it ultimately will bottom-out: 
when it does, peace and stability will falter. End Summary. 
 
---------------- 
NO END IN SIGHT? 
---------------- 
 
¶2. (U) While arguably Sierra Leone's greatest wealth lies in 
its territorial waters and mineral resources, the inability 
to harness and monitor those potential riches themselves 
means citizens benefit only marginally from them - and the 
global downturn in demand for diamonds and other minerals as 
well as increased smuggling means that even those minimal 
profits have been lost. President Koroma has placed his focus 
on agricultural production in the hopes of shoring up food 
security and with a long-term vision to become a net-exporter 
of key cash crops like cocoa, coffee, and rice. Though Sierra 
Leone has received equipment and technical assistance from a 
variety of donors, it is too soon to tell if it will have the 
desired effect: food scarcity during the dry season will 
indicate if his strategy has thus far been unsuccessful. 
Contacts also note that the push to move unemployed youth out 
of Freetown and back to their villages to work the land has 
been ineffective, and warn that farmers continue to move away 
from subsistence farming and into cannabis production (reftel 
B). 
 
¶3. (U) Without increased food production, Sierra Leoneans 
must rely heavily on imports. However, the currency 
fluctuations (reftels C and D) are hurting merchants, who 
have raised prices but are losing profits. The Leone recently 
topped out at 4,350 to one U.S. dollar, and importers have 
begun hoarding key items, such as fuel and rice, in the hopes 
that the situation will improve during the holiday season 
(Note: On November 25, the Leone was trading at 3,750:1, and 
even 3,500: 1 in local stores. This is likely due to 
increased liquidity and foreign exchange in the market, as a 
result of diaspora members returning to Sierra Leone for the 
holiday season. This is an artificial improvement, however, 
and post expects the Leone to fall again by mid-January. End 
Note.), or because they can no longer afford to sell at a 
loss. Though visiting relatives always bring cash, contacts 
told Poloff that overall remittances are drying up. 
 
---------------------- 
"HARD TIMES DONE COME" 
---------------------- 
 
¶4. (SBU) In speaking with staff and others about the 
country's mood, Poloff was told that "hard times done come," 
and that there is more grumbling now than ever before about 
inflation and lack of growth. While Koroma's recent 
conference in the UK for investors and donors was viewed 
positively by many, they also noted that such an event will 
not have an immediate, tangible impact: it may help change 
the country's image and encourage new interest, but that 
won't translate into the major and expedient investment 
needed to increase production, employment, and put cash in 
people's pockets. Sierra Leoneans are used to having little, 
and faced previous food shortages peacefully and stoically. 
They are able to "make do" without food imports as long as 
fruit, vegetables and locally-produced rice are plentiful, 
but the dry season will be challenging. Most Sierra Leoneans 
live on the margins of economic destitution and nutritional 
deficiency, but increased food prices coupled with the 
routine challenge of finding work could push more and more 
people into even greater levels of suffering and hardship. 
 
¶5. (C) According to government contacts, the already-delayed 
 
FREETOWN 00000466  002 OF 002 
 
 
Goods and Services Tax is unlikely to be implemented on 
January 1, as planned. The government is appearing to 
compensate for this loss of income by finding other means: a 
new "development levy" is being placed on fuel, which will 
increase its cost by the equiavlent of 40 cents per gallon. 
Post recently received a letter from one fuel vendor, stating 
that the levy will be passed on directly to the consumer, 
which will be a hardship for consumers at all levels, and 
could incite significant outcry from transportation 
companies. The taxi drivers, many of whom are ex-combatants, 
are quick to strike when unhappy, which will bring cities and 
travel between them to a standstill. 
 
¶6. (C) Reftel E poses the question of when economic hardship 
could trigger unrest: this is a challenging question to 
answer, because Sierra Leoneans seem to have a greater 
ability to withstand poverty than their neighbors. That said, 
one critical tripwire is increased criticism directed at the 
President from both the general public and members of his own 
government and party. A key Presidential advisor said that 
the party's statements are a barometer for public opinion - 
if the party protects Koroma by citing external market 
pressures and Sierra Leone's limited policy tools to address 
them, they are reflecting their view that the people will be 
comforted by knowing that much of what is happening is out of 
their leader's hands. If the party starts to question 
Koroma's inability to change the economic landscape (despite 
being cognizant that he is relatively powerless to do so), 
they have become aware that the mood of the public has 
shifted and requires a scapegoat. Shortages on the shelves or 
complaints about hunger cannot be seen as tripwires, 
according to contact, because these are common occurrences 
here and are generally accepted. But continual media 
reporting about the President's ineffectiveness, coupled with 
statements from APC members that cast doubt and blame upon 
him, could signify that the tide will quickly turn. 
 
------- 
COMMENT 
------- 
 
¶7. (C) There is no way of knowing when the economy will 
completely bottom-out, but true food scarcity and a further 
decline in purchasing power will likely result in anger as 
well as hunger. If the currency resumes its fall again in 
January, bringing with it limited imports and fuel hoarding, 
post expects that patience to endure the situation silently 
will run out. The government needs to quickly revamp its 
strategies to increase large-scale works projects that will 
employ the huge numbers of unemployed street dwellers, 
eliminate the fuel development levy, and approach donors 
quickly for food subsidies and foreign exchange. One decent 
meal a day satisfies Sierra Leoneans: if the government can 
provide that, while at the same time increasing the Leone's 
value by increasing its reserves, this potential trigger for 
instability can be at least temporarily neutralized. End 
Comment. 
FEDZER