By Chernoh Alpha M. Bah, Matthew Anderson, and Mark Feldman
A government audit report into the financial activities of the Maada Bio administration for the fiscal year 2019 shows major discrepancies in the accounting of timber exports by Leadway Trading SL Ltd., the sole exporter of timber in the country. The audit alleges that government could not account for revenue totaling Le2.1 billion collected from timber transactions for the fiscal year 2019. “A comparison between the timber cash book and bank statement shows that revenue for the export levy (receipt no. 430917) totaling Le2,101,120,000 (two billion, one hundred and one million, one hundred and twenty thousand Leones) was not paid into the relevant bank account at the Bank of Sierra Leone,” the government auditors noted in the report.
“For every timber transaction, export levy ($2500) and afforestation ($350) should be paid per cubic meter. We observed that on 11th January 2019, 2 containers were exported, but only the afforestation fee of $200 (Le1,674,162) was recorded in the cashbook and bank statement. As a result, export levy and afforestation fee of Le41,854,050 ($5,000) and Le4,185,405 ($500) respectively were neither banked nor recorded in the cashbook,” the report further disclosed. Auditors also report that Leadway used shipping containers rather than cubic meters as a unit of measurement for exported timber, contrary to the required rules stipulated in Section 3 of the Finance (Amendment) Act of 2018. Section 3 of the Finance (Amendment) Act 2018 requires that ‘’an exporter of any timber or timber products shall prior to exportation pay to the National Revenue Authority, a timber royalty of US $2,500 on every cubic meter of such timber or part thereof.’’
“Leadway Trading SL Ltd., the sole exporter of timber was using containers rather than cubic meters as a unit of measurement as required by section 3 of the Finance (Amendment) Act of 2018. As a result, timber exported was undervalued,” the report states. If accurate, Leadway’s paying of taxes per container rather than per cubic meter of timber could mean a major undervaluing of the amount of timber exported, thereby reducing the value of applicable taxes due to government. Africanist Press is yet to independently verify the separate colossal amount of estimated revenue losses from undervaluation of exported timber recorded in the report.
Auditors, however, recommend that Leadway should explain with documentary evidence why the company used containers rather than the cubic meter as a unit of measurement in contravention of the Finance Act. “There is a high risk that the much needed financial resources of government might have been lost, and that information disclosed in the financial statement might be misleading,” they said, noting that the government should ensure that evidence be provided to show that the revenues totaling Le2.1 billion were banked, and that Leadway should also be investigated as to why their timber transactions were not recorded completely.
However, Leadway’s chief executive Babadi Kamara denies the accuracy of the audit report. He says his responsibility is to collect and pay revenue to government and he would not know if revenues paid to government were not banked. “I can tell you with all certainty that I have paid all that is due government from timber trade without a single cent being missing,” he told Africanist Press, whilst denying report by auditors that timber revenue exported in fiscal year 2019 were undervalued..
“All I can tell you is that timber is bought and shipped in containers and since I took over the trade, I have received and paid to government as of today US$54,225,750 which is for 18,995 containers.” Kamara says Leadway’s initial mandate, when he took over, was to supervise the export of 699 containers of timber that were already at the port and paid for to the previous government of Ernest Bai Koroma. “There were 194 containers out of the port that were also paid for to the previous government. Also, 7 containers were exported by exporters in the previous regime that didn’t pay cities. So total cities that was outstanding was $90,000 which is for 900 containers as detailed above,” he says, adding that, “when any container is exported from these containers, I will request from the previous exporter to pay the cities. I collected the total of $90,000 and paid to government.”
Kamara also says the total timber export revenue of $54,226,750 paid to government included a $47,487,500 paid as NRA levy, $6,648,250 as afforestation fees, and another $90,000 taxes from previous exporters. “This is a record that even the past 11 years trade of timber in the past regime can’t beat,” he said.
But Kamara couldn’t say whether these figures were for timber exported in fiscal year 2018 or fiscal year 2019, but instead said, “the timbers of 699 and 194 that were paid for but not shipped before I took over were exported over a long period of time.” Kamara could also not confirm the total quantity of timber exported by Leadway for the year 2019. “I might not be perfect in life generally, but when it comes to dealing with money and my integrity, be rest assured of distinction from me,” he stated.
Leadway Trading was granted an unprecedented monopoly over timber exports by President Maada Bio in 2018 three months following the presidential order to centralize government revenue mobilization. In early March this year, an Africanist Press report highlighted how the president’s relationship with Babadi Kamara influenced the presidential order to accord Leadway the monopoly license on timber export.Finance officials interviewed for the March publication expressed disbelief that Leadway Trading and Babadi Kamara were made sole agents for all timber exports from Sierra Leone without a competitive bidding process.
The Africanist Press investigation had discovered that Babadi Kamara helped to raise campaign funds for the election of Maada Bio in 2018. Quite interestingly, Leadway’s initial contract assignment was only granted temporarily for the shipment of existing timber deposits at the Freetown Port and other depots across the country (an estimated 13,000 containers). Yet, the company’s export contract was renewed by State House in February 2020, eighteen months after it was first granted, again without a competitive bidding or tender process. A government press statement issued in February 2020 acknowledged the payment of US$37,140,000 from Leadway Trading but provided no details at the time on how much each exported container was sold for, neither has there been a disclosure on Leadway’s total profit from the shipments over the eighteen months.
The advance copy of the 2019 audit report seen by the Africanist Press also discloses a host of other irregularities in public finance management including the fact that the total amount of Le236 million, representing GST transfers made by transit banks for the year 2019, were not deposited into the Bank of Sierra Leone (BSL); also that a reconciliation carried out between the NRA records and the National Telecommunications Company Limited (NATCOM) equally show a discrepancy of Le86.82 billion above that recorded in the NRA cashbook. Auditors say revenue arrears valued at Le300 billion disclosed in the General Purpose Financial Statements (GPFS) for the year 2019 may have been misstated as third-party confirmations from selected taxpayers were also not submitted to the auditors.
Let them account for it the $2.1 billions
The Sierra Leonean people are all accomplices in
In financial crime,&the plundering of the country’s resources, and Swindling of billions, into secret
Offshore accounts, by deliberately voting for a bunch of
Criminals& mafia group into the country’s sacred position
Of trust, the presidency.
We did advise you people against voting for a lawless
thug, but you the people didn’t listen, now look the mess
In the country today. You will only have yourself to blame
for misrule & misery you people brought yourself into.