Sierra Leone: Central Bank tackles 'dollarization' of the economy
The Central Bank of Sierra Leone has announced a new banking regulation to reduce the dominance of foreign currencies, especially the dollar in the country.
Sierra Leone’s economy is dominated by foreign businesses. The dollar is the most widely used in the country as compared to the Leones, the country’s legal tender.
The new law according to the Central Bank is to reduce the amount of dollars usage in the country. It is also for Sierra Leone to follow best practices and reduce corruption in the financial sector. People with foreign accounts will no longer receive withdrawals in foreign currency but Leones- the legal tender.
Mr. Beresford Taylor, the Communication Manager at the Bank of Sierra Leone, said the new law is not to restrict people from using the dollar, but to make sure that usage of the foreign currency is done through the proper banking system. “Commercial banks will no longer issue out dollar to customers in hard cash except the customers want to transact a business outside the country“ he said.
He added that people wanting to pay school fees, buy products outside the country will have to do so through the banking system. “Any person caught will face the law which is a fine of three million Leones approximately, seven hundred dollars. The fine is for first timers and when caught for the second time culprits will be jailed for six months, according to Taylor.
Sierra Leone is among countries with dozens of illegal transactions. Illicit money flow from the country in 2011 alone amounted to two hundred and thirteen million dollars, according to a report by the Global Financial Integrity.
Sierra Leone is also host to a number of young people locally called “Dollar boys” who exchange dollars and other foreign currencies on the streets. This new law will affect this group.
Abu Bakarr Bangura who is a member of the ‘Dollar boys’ expressed concern over the new measures by the Central Bank. “It is from this trade that I feed my family, and I have been on this business since leaving school some six years ago. We don’t know what the authorities want us to do but this law is not good for people like us” he said.
“We have been of big help to the business community, as it is difficult to get foreign currencies especially the dollar from the bank, most people traveling to Guinea to buy market and even some traveling to Europe come to us for dollars as the bank is always short of dollars,” Bangura stated.
However, the Central Bank has said people interested to trade in dollars, should register with the bank so as to make their business legal.Tweet