THE TRAVAILS OF SIERRA LEONE'S CENTRAL BANK - THE BANK OF SIERRA LEONE
Today Wednesday August 4 is the 46th anniversary of the launching of Sierra Leone's first national currency - the leone. As the Bank's website stated the authorities at the time, were of the view that as a part of concretising true independence as well as accelerating economic activity in the new nation's interest, it was time for the country to have its own notes and coins. This effectively meant that the leone and cent would now replace the West African Currency Board denominations which were in use in the British colonies of Nigeria, Ghana, the Gambia and our very own mother country Sierra Leone.
This website with some interesting facts about currency and monetary use along the coast of West Africa has noted that:-
And so after 46 years, what has the Bank of Sierra Leone done to improve the country's economy? How effective has it been in regulating banks operating within the borders of Sierra Leone and more importantly in all these years, has the country's banker of bankers escaped unscathed, unscarred by the country's corrupt leaders and manipulators? Read some of the facts at hand and decide how useful the Bank of Sierra Leone had been in helping the country's economy stay on a firm footing or slide downwards.
First things first. Our national currency was issued for the first time in 1964 with one Gordon Hall as the Governor with denominations of one and two leone currency notes being the most popular with the ordinary man in the street. There were the half, one, five, ten and twenty cent coins to complete the line-up with the five leone note a preserve of businesses and certain privileged and respected members of society.
That was in 1964 at a time when the two leone note was equivalent to the British pound and was legal tender that was readily accepted in UK outlets. The Head of State then was Prime Minister Sir Milton Margai the father of the nation and leader of the Sierra Leone People's Party, the SLPP.
In 1968, after a series of political upheavals during which Sierra Leone experienced it's first military take-over by then head of the army, the late David Lansana, Siaka Stevens the declared winner of the 1967 General Elections took over the reins of government promising a new and progressive Sierra Leone with equal opportunities for all.
When he took over the currency was as strong as ever and was effectively linked to the UK British pound (£) with reserves held in that country that ensured a stable economic climate.
By the time, the APC was kicked out by their very own hand-picked original recruits in the army twenty four years later on April 29 1992, the national currency had become so devalued that it's smuggling across borders became a way of life with traders who would not be bothered with a system that was steeped and reeked of massive corruption.
The first signs that things were not going well was the exchange rate for the US dollar on the markets in Sierra Leone. Hitherto the dollar was worth about 75 cents of Sierra Leone money, it soon climbed to one leone to the dollar with some waving this off as just a little skew in the economy.
Things began to look a bit not-so-rosy when then Finance Minister C A Kamara-Taylor under the Stevens regime announced that the fast-depreciating leone would now be linked to what he called the SDR, Special Drawing Rights, which was explained by the government as something good for the country which had now attained the status of a Republic. "We are now in complete control of our own economy and no longer have to get tied to the currency of our colonial masters", they glibly lied to the public who had started to raise doubts about the government's economic policies. The SDR and the de-linking of the leone from the British pound and the dollar by extension were also justified at a time when the UK currency was experiencing slight fluctuations.
This table showing the fortunes of the leone tells the story of an economy in freefall with those in charge not caring about their action on fellow citizens and the welfare of the people.
The story of the Bank of Sierra Leone reflects the politics of the time and the mismanagement in both governance and the economy with the Central Bank at one stage engulfed in massive corruption when investigations showed just how corrupt the institution had become.
The credibility of the Bank of Sierra Leone hit rock-bottom when it was revealed that cheques that had been defaced (tip-exed) and written over were honoured by officials at the bank. In some cases, cheques and vouchers were recycled and payments paid by the bank from the same defaced documents.
At another time, it was revealed and exposed by the police of Central Bank officials recycling (putting back into circulation) currency that had been withdrawn from circulation and was meant to be destroyed!!!!!
It is an open secret that things really got to a head in corruption and bad governance during the Momoh era when he instituted the infamous New Economic Order, a cover for massive corruption and the hounding of people thought to be a threat to the government.
While government and APC party officials dealt openly in currencies that were no longer available at the Central Bank but in business outlets of officials, Sierra Leoneans can still recall how commercial banks were unable to pay out monies from accounts of their customers!!!
They can still recall those bundles of filthy and mouldy 5-leone notes, covered in all manner of dust that changed hands, with people not caring to count individual notes for fear of inhaling noxious fumes from them.
It was a time for some commercial bank managers as well as the Central Bank to make a killing as they decided what customers should get when demands are made for such events like funerals and other urgent matters needing money from their own bank accounts. It was an economic and social nightmare!!!
Among those who acted as Finance Minister during the most corrupt days of the APC government under Joseph Saidu Momoh was one Hassan Gbassay Kanu. There were stories doing the rounds at one time that he had the local currency stored in drums ready to be smuggled abroad. When the Momoh government was sent packing by the khaki boys who set up Commissions of Inquiry to look into the activities of the ousted government, he thought he saw the right opportunity to air his side of what happened then that generated the story.
This is a part of his submission to the Beccles Davies Commission as he tried to explain a system that had got rotten to the core
The Momoh regime could be stated to be the worst when it came to governance and economic management as he took over at a time when the country was in dire straits and needed a leader with a will to bring the country back from the brink. Indeed as one commentator noted.
And today, thanks to the destruction of a firm foundation inherited in 1968, Sierra Leone is still grappling with the problems of the past - a process made even more difficult by corrupt government officials and party functionaries whose sole aim is for self and relations with the mother country occupying the bottom rung in their list of priorities.