The Republic of Sierra Leone State House

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President Koroma calls on financial institutions to think out of the box

By State House Communication Unit

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President Dr Ernest Bai Koroma has called on financial institutions and the private sector to think out of the box in solving bread and butter issues affecting the ordinary people of Sierra Leone.

He made this call during his response to the Bank Governor's speech at the annual Bank of Sierra Leone (BSL) banquet held at the Bank Complex, Kingtom in Freetown on Friday February 24, 2017.

The president commended the theme of the dinner: 'Repositioning Bank of Sierra Leone for the future', saying that it resonates with government's Agenda for Prosperity. "Let me start by commending the Bank's senior management and staff for the splendid work you have done over the past twelve months. I am very satisfied that the management at BSL has worked within their mandate to support government in some of the key policy initiatives, especially with their ongoing work in reaching out to communities, to improve access to affordable finance," he said.

President Koroma also noted that despite the enormous challenges in the global economy, there is optimism for some level of stability as underpinned by developments in some advanced economies around the world. "The recent improvement in commodity prices, specifically iron ore, is good news for our economy. We should however not be complacent by this favourable message of recovery because there remain considerable uncertainties in the direction of the global economy," President Koroma warned.

Reflecting on the painful experience of the slump in growth following the twin shocks of Ebola and the drop in the price of iron ore in the world market, the president maintained that now, more than ever, is the time to diversify the economy and reduce government’s reliance on extractives. He urged the bank and private sector players to redouble efforts in mobilizing resources to facilitate economic diversification. He also commended the bank for steps taken to establish a nationwide Ombudsman service that will help bring confidence to investors.

Responding to the Governor’s speech on the state of financial exclusion in the country, President Koroma pointed out that the fact that less than 20% of the economically active population owns accounts with financial institutions is a serious cause for concern. He urged financial institutions as well as private sector players to leave their comfort zones and think out of the box in order to address the problem. 

Delivering his speech, the Governor of the Bank of Sierra Leone, Dr Kaifala Marah said the Governor's  annual dinner has been a traditional event on the calendar of the Bank, dedicated to apprise stakeholders on developments in the economy, and provide them with the opportunity to self-retrospect on policies over the year, draw some lessons and reposition the Bank to contribute meaningfully to Government's development aspirations, among them to achieve private sector led growth through diversification of the economy, as espoused in the Government's Agenda for Prosperity and emphasized by the Minister of Finance and Economic Development in his budget statement last November.

"The science of diversifying an economy through private sector-led growth requires a strong and forward looking financial sector with innovative instruments as a departure from traditional development delivery. It is against this background that I have chosen as my Theme "Repositioning the Bank of Sierra Leone for the future", Dr Marah said.

According to the Governor, Sierra Leone’s economy has recovered remarkably from the twin shocks of the Ebola epidemic and the plunge in iron ore prices with an estimated growth of 4.9% in 2016 compared to a contraction of 20.6% in 2015. “2017 is far more promising with a projected growth rate of 5.4%,” Dr Marah maintained. He pointed out that Sierra Leone has “14 commercial banks and 17 community banks that are supervised by Bank of Sierra Leone, 2 licensed and 11 registered microfinance institutions (MFIs), 3 mobile money operators and 59 financial services associations (FSAs) who together serve 486,556 clients” nationwide. 

The Governor disclosed that a second branch for the Bank of Sierra Leone will be built in Makeni, and construction will start in April this year. This, the Governor said, "will spur economic growth, contribute to ease of access to financial services and unlock the vast economic potential of the northern region."

Dr Marah also spoke of plans to establish a National Switch that will enable banks to share their Automated Teller Machines (ATMs) with other banks in the industry. “The switch will help facilitate customer payments for utilities (i.e. electricity, water and telephone services), or loading of airtime on mobile phones, and making payment using debit cards,” he stated. He also disclosed that the BSL has launched the Young Entrepreneur Fund with initial seed money of Le 700 million to provide capital to young entrepreneurs who may have brilliant business ideas but do not have access to start-up capital.

 


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