By Mohamed Jaward Nyallay
The Bank of Sierra Leone (BSL) has announced several measures meant to support local businesses with the goal of cushioning the effect of the Coronavirus pandemic.
In a statement by the bank on Friday, it said the Monetary Policy Committee agreed for the Bank to create a Special Credit Facility to the tune of Le500 billion to support the production, procurement and distribution of essential goods and services.
“This will be a concessionary interest-rate facility that will be channeled through the commercial banks,” the statement said.
Together with the government, the Bank will also work on setting a very low interest rate which will allow businesses to borrow and stay afloat.
The measures announced by BSL also include support to the private sector for the importation of essential commodities.
The support will come in the form of providing the huge foreign currency that will be needed by businesses to import huge volumes of essential commodities in the country.
The Bank Governor, Professor Kelfala Murana Kallon, first made some of the announcement on Thursday during his appearance in front of lawmakers in Parliament.
The BSL said it will also come to the aid of commercial banks who will likely face shortage in paying customers in the event of panic. The support will come in the form of provision of cash, to help the banks stay liquid.
In the area of liquidity, the banks said: “To ease any tightness in liquidity in the financial market, the MPC decided to extend the reserve requirement maintenance period for commercial banks from 14 days to 28 days. This will be complemented by an active participation in the secondary market by the BSL.”
All these moves are aimed at supporting earlier moves that were announced on Thursday by the Ministry of Finance to cushion the effect of the Coronavirus on the country’s fragile economy.
Finance Minister, Jacob Jusu Saffa, said the government was developing a comprehensive economic package that would include tax cuts, tax deferrals and incentives for businesses.
Saffa said simulations have shown that the country would lose close to Le 1billion from its projected domestic revenue this.
The worse affected areas are the services sector, tourism and trade. On average, growth in the three sectors will be slowed by at least 3%, according to the ministry.
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