Transactions In Foreign Currencies Officially Illegal
On 20th August 2019, Governor of Bank of Sierra Leone, Dr. Kelfalla Kallon told a press conference at the bank’s auditorium that henceforth, all transactions in SL should be done in the country’s currency, the Leone, and not foreign currencies.
Adding to that, he said that quoting prices, making or receiving payments for transactions undertaken in SL, including rental contracts for professional services, hotel and automobile rental contracts in any other currency other than the country’s Leone is henceforth prohibited.
He also made specific reference to Non-Governmental Organisations, who according to him do most of their transactions in foreign currencies, especially the Pound Sterling and the U.S Dollar
“To ensure compliance, the bank of SL in collaboration with the Ministry of Finance will be tracking the inflow of remittances to all NGOs operating in the country. Penalty for non-compliance with these directives shall range from the withdrawal of the duty waiver facility of the non-complying NGOs to the ultimate withdrawal of the registration to operate in SL,”Professor Murana Kallon, Governor, Bank of Sierra Leone
The governor went on to say that since he took over office a year ago, he did not have the legal mandates to enforce these policies as they were under amendments.
He said he now has the mandate to ensure that no individual or business entity in SL holds more than 10.000 United States Dollars or it’s equivalent in any foreign currency outside the banking system except otherwise approved by him.
Failing to adhere to this policy, the governor said the individual or institution, if caught shall pay a fine of 100 million leones or an imprisonment of a term not less than 3 years or both as prescribed in the Bank of Sierra Leone Act 2019 section 26(5).
It would be recalled that in November 2018, a few months after his appointment as Ban Governor, Professor Kallon responded to queries from civil society actors on the ‘dollarisation’ of the economy, by saying that the problems are largely related to traded and non-traded goods, the latter being goods and services that do not enter into international trade but are being dollarised.
He stated then that most Sierra Leoneans are forced to offer Leones in exchange for dollars in order to pay for non-traded goods like housing. leading to an increase in the demand for dollars relative to the amount available in the economy.
This, he said, causes the Leone to depreciate against the dollar.
Regarding the weak Leone then, he stated that the Leone is weak because we are not exporting as much as we are importing and that it will only get stronger if we are able to reverse this trend.
He however promised that the Bank will do everything to ensure that ‘dollarisation” becomes a thing of the past, and that in the very near future the Bank would ensure that no contracts are signed in dollars.
Therefore a lot of Sierra Leoneans view the latest move as in keeping to his word and a clear manifestation of the frantic efforts being made to stabilise or stem the free fall of the Leone