Devastating as this pandemic is, there is an opportunity for the government of Sierra Leone to fundamentally change the direction of the local economy by offering an economic response that is not only proportionate to the scale of the disruption, but one that is bold and big enough to define a new social compact with the people of Sierra Leone.
As alluded to earlier, for any stimulus package to work in Sierra Leone it MUST be big and bold, strategically tailored to the best interest of the structural features of our local economy, targeted to provide relief to individuals, families, small businesses and industries impacted by the economic slowdown due to the coronavirus pandemic.
Now let us examine, within the context of the above outlined features of the economy, the stimulus measures announced by the Bank of Sierra Leone on March 19, 2020 in a monetary policy statement issued creating a special credit facility of Le 500 billion.
Since we do not have any independent credit rating agency in Sierra Leone, the banks can only deal with their existing customers, in effect excluding new businesses without any credit history and micro entrepreneurs – the majority of whom are either unbanked or underbanked.
Therefore, much of this credit facility will end up in the banks of countries like China that supply Sierra Leone with these goods, draining on foreign reserves and increasing the country’s balance of payment deficit.
