Strengthening the Financial Sector: Has the SLPP Delivered on Its Promises?
By the Sierra Leone Live Team.
As the June 24, 2023 elections approach, Sierra Leone Live investigates the Sierra Leone People’s Party (SLPP) government’s progress in implementing its 2018 manifesto promises. In this article, we explore Part II, “Transforming The Economy – Developing the Private Sector,” with a particular focus on strengthening the financial sector.
The financial sector plays a critical role in promoting productivity and economic growth. The 2018 SLPP manifesto highlights the importance of a strong, sound, and effective banking system to increase access to both short-term and long-term capital for investment purposes. Several challenges faced the sector, such as weaknesses in the central bank, weak infrastructure, inadequate bank coordination, shortage of skilled professionals, and insufficient technological resources.
The SLPP’s “New Direction” aimed to address these issues by focusing on six key areas:
- Capacitating Bank of Sierra Leone: Strengthen regulation and supervisory roles, improve risk-based supervision, review the current Banking Act, rationalize remittances, develop ICT infrastructure, strengthen payment systems, develop a manpower development plan, and create policies for foreign currency lending.
- Strengthening Commercial Banking: Review policies and laws, support government-owned commercial banks, strengthen the Association of Commercial Banks, and develop a Code of Ethics for the banking industry.
- Expanding Micro-Finance Opportunities: Review policies and laws, strengthen Micro-Finance Institutions, and design and implement a credit guarantee scheme for SMEs and agriculture.
- Re-establishing Development Bank and Strengthening Commercial Banking: Re-establish the National Development Bank, delink community banks from the central bank, and link them with the Development Bank.
- Strengthening Non-Bank Financial Institutions: Review NASSIT, develop a framework for regulation and supervision of NASSIT’s investment arm, review the Insurance Act 2000, strengthen SLICOM and SLIA, improve insurance supervision and regulations, strengthen the capital market, and develop policies for issuing long-term government debt.
- Improving Training: Revise the curriculum for banking training, establish a national school of banking and finance, and organize an annual financial sector conference.
As Sierra Leone Live investigates the SLPP’s progress in achieving these aims, we will examine the following:
- Has the central bank’s capacity been improved in terms of staff competency, systems, and technology?
- Are there noticeable changes in the regulatory and supervisory framework for commercial banks, microfinance institutions, and non-bank financial institutions?
- Has the re-establishment of the National Development Bank taken place, and are community banks effectively linked with it?
- Are there new training initiatives and institutions for the financial sector, and has the sector’s curriculum been revised in line with international standards?
The investigation will provide an unbiased assessment of the SLPP’s achievements in strengthening the financial sector, enabling voters to make informed decisions in the upcoming elections. The financial sector’s development is a critical component of economic growth, and it is essential to determine whether the SLPP has delivered on its promises in this area.
In the coming weeks, Sierra Leone Live will provide an in-depth analysis of the SLPP’s performance, shedding light on the progress made in developing a robust financial sector and offering an evidence-based evaluation of the party’s efforts in achieving its manifesto objectives.