Sierra Leone has been suffering from economic meltdown even before the COVID-19 pandemic; sadly, the Governor of the central bank of Sierra Leone has described the country’s economy as ‘Beggar Beggar Economy’ – a situation that it feeds solely from handouts overseas.
Prof. Kallon who did not hide his real thoughts yesterday, 18th August, 2020 on Radio Democracy- 98.1 FM – Good Morning Salone show explained that the policy they’ve set up is to tackle short-term economic situations like; reducing inflation and creating low unemployment rates. However, this, he said had faced a serious challenge amid the COVID-19.
According to him “no economy will turn around during this pandemic” he said. He added that Sierra Leone’s economic problem has to centre on the supply of money growth, which they normally reference as ‘Economics 101.’
Unfortunately, he said, the supply of money, mainly foreign currency isn’t the responsibility of the Bank of Sierra Leone. He noted that “We serve as the Government’s bank,” as such whenever the government receives foreign currency in the form of grant or loan, Bank of Sierra Leone buys them and in turn invests the foreign currency (dollar). “How the government decides to spend the money is their prerogative, all we can do if advice” the Governor.
He explained that since the exchange rate of the dollar to Leones has been constantly depreciating, the bank, he noted does not determine the exchange rate; but the market does. They as managers of the bank, he said, can only profound policies to avoid excess volume. He further stated that Sierra Leone should start to export our own currency as this will help our currency to appreciate in the international market. Prof. Kallon said he’s not surprised that the country’s economy is resilient as it highly depends on disbursement.
He said that the Bank of Sierra Leone is currently using money aggregate to rescue the shamble economy. According to him, they will implement that policy any time they find out that the Ministry of Finance has spent too much.
This policy, he further explained, operates by selling government bonds in an open market to retrieve most of the cash in circulation.
‘’Our hands are tied due to the pandemic.’’ He said noting that the country needs an economic restructuring policy as soon as possible; and the mindset of citizens needs to change. He said everyone must work hard to help the economy.