November 23, 2021
By Alfred Koroma
Governor of the Bank of Sierra Leone, Prof. Kelfala M. Kallon, yesterday disclosed in the Well of Parliament that, the Bank of Sierra Leone wasted $68 million to ‘bribe’ people who were hoarding the country’s currency, so that they could bring it back to the banking system.
“We wasted $68 million to bribe people who were hoarding Leones to bring it into the banking system. I asked myself: we have worked so hard during the past two years to build reserve for this country, is it going to be sustainable for us to keep bribing people to take Leones, and when we bribe them, they bring the Leones then they take it back; then we have to bribe them again?’’
According to the Governor, they made an emergency order for money at the start of COVID-19, to meet the increase demand for money and for government spending, but those monies came and just vanished out of the system.
He said unlike other countries, Sierra Leone pays hard currency to print money not worth the value of the money that comes.
He stated that government spend huge amount to order for money, and charter plane to bring monies, but at the of the day disappear when put into the banking system. He continued that when the central bank put out money, out of each Le 1000 they put out, they expect to get Le800 back to the bank.’’
To combat the situation, he said they made a decision to reverse an order against holding dollars so that he can sell dollars to people who were hoarding the Leones to bring them back into the banking system which cost the bank $68 million.
The Governor was speaking to MPs on the redenomination of the currency the country is about to experience, following a motion that was moved in the Well of Parliament to educate MPs on the redenomination exercise.
While speaking, the Governor said that regardless of anything else, all the economic analysis is that one should redenominate under certain circumstances. He said the situation the country faced in 2020, even if everything else had worked well, gave him the reason to redenominate.
He noted that even before he was approved by the House to take the job, he had thought of redenominating the country’s currency because of the huge transaction cost of daily business in the country.
“People are running around with huge sacks of money, there is great lose on the economy, therefore we need to redenominate,’’ he said.
