Sierra Leone bill proposes sweeping changes to investment regulation
Lawmakers in Sierra Leone are considering a bill that would change the way that local and foreign businesses are registered and regulated in the country. The bill would establish a National Investment Board (NIB) chaired by the country’s president, and largely composed of the president’s cabinet officials. This bill would also terminate the Corporate Affairs Commission, the Sierra Leone Investment and Promotion Agency and the Public Private Partnership Unit – while vesting their roles in the NIB. Passage in parliament is likely, but electioneering ahead of 2023 general polls could disrupt the legislative process.
Significance – Presidential powers
The stated purpose of the proposed legislation is to streamline the regulatory process for investors. However, the bill would elevate the NIB over all other agencies that are relevant to investment and it would cement President Maada Bio’s control over business regulation. The board would not only be chaired by him, but it would also include key figures in his cabinet such as the chief minister Jacob Saffa, mining minister Timothy Kabba and foreign affairs minister David Francis – all of whom may serve here without parliamentary approval. Section 7 of the bill states further, “The Board shall be the highest policymaking body on investment in Sierra Leone.”[1]
Four departments have been designated under the NIB.
A Business Facilitation Unit that would review permits and licenses.
A Public Private Partnership (PPP) Unit that would administer the country’s PPP law.
An Investment and Export Promotion Unit that would supplant the Sierra Leone Investment and Promotion Agency (SLIEPA)
A Corporate Affairs Unit that would assume the roles of the Corporate Affairs Commission, which is currently responsible for incorporation under the Companies Act 2009.
As context for the proposed changes note that President Bio replaced the heads of SLIEPA and Corporate Affairs Commission after winning the presidency in 2018. He has also replaced the central bank governor who would be a statutory member of the proposed NIB, and he most recently suspended the country’s auditor-general in controversial circumstances (See: Sierra Leone president suspends auditor-general who exposed corruption). This turnover illustrates that Sierra Leone’s public institutions are already highly vulnerable to political interference whereby an agency’s leadership typically changes after a ruling party loses power. And the vulnerability remains elevated with the NIB bill, given the board would mostly comprise cabinet figures who would change whenever there is a new president.
Outlook – Opposition and 2023 elections
The ruling Sierra Leone People’s Party (SLPP) has a simple majority in parliament but needs a two-thirds majority to pass this bill i.e., 98 votes.
To reach that bar, it will need support from other legislative groupings. In all likelihood, the government will be able to count on support from the 14 paramount chiefs who are members of parliament based on their status under customary law – and the chiefs usually vote in support of any party that controls the government. However, the main opposition All People’s Congress (APC) has enough seats to block the process. It has 58 out of 146 seats compared to the ruling party’s 59.
That said, lawmakers have told us that opposition parties have not yet formed a position on the bill and its key elements are not opposed in principle. Assuming enough opposition MPs can be persuaded, the bill is expected to be passed before the end of 2022. However, the legislative process could be halted in the buildup to 2023 elections if the SLPP has not advanced the process by April 2022.
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[1] NIB Bill (July 2021). Government of Sierra Leone.
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