By Abass Jalloh
The Sierra Leone Chamber for Agribusiness Development (SLeCAD) has called on the Sierra Leone Central Bank and the government to review the current banking restrictions to boost businesses and enhance economic growth.
A statement by SLeCAD says the lack of access to finance and the denomination of the Leone including the cash withdrawal limits from banks are affecting the business sector across the country.
“The current action of the central bank to introduce cash limits is not only bad but tantamount to slowing down businesses and resulting in killing businesses,” the statement reads.
It added: “We request that both government and development partners work to develop financial systems in Sierra Leone that are able to meet the financial demands of a growing agriculture sector, industrialization, and entrepreneurs in order for the sector to reach its full potential, create jobs, reduce poverty, and ensure economic and inclusive growth for all.”
The agency believes that part of the consequences of the current economic situation is that the policy makes the small businesses fear putting monies in banks due to a lack of trust in the banking systems, increases in informal economy from the current 92 to 99%, increases unemployment with poor industrialization and economic growth, and Sierra Leone will be more import dependent.
Concern was raised over commercial banks giving short-term loans at an interest rate of 25 - 30 percent per annum, and their lack of the skills and knowledge needed in lending loans to agribusiness SMEs and farmers.
In a follow-up press conference at SLeCAD’s Freetown office, its Executive Secretary, Ahmed Nanoh, said Sierra Leone is challenged with inflation and foreign exchange in terms of the processes at the port but said the country should be able to maximize productivity by targeting exports for the world market to get the forex needed for trading with other countries.
He added that: “the loans that the commercial banks are for short- term and the interests are very high, and many a time we have trumpeted this but the government, commercial and central banks are not ready to work with us for us to get that right”.
He mentioned the production and export of cassava, flour, and gari, with cassava being the country's second staple food after rice, yet he cited how the “government spends well over $250 million to import rice into the country”, saying that such over-reliance on rice consumption could not be sustained as a nation.
Nanoh suggested that for this sector to be effective, the government should invest in public infrastructure along the cassava-belt areas like Bo, Moyamba, and Bonthe.
He spoke about having a well-structured agriculture loan scheme that takes into consideration interest rates and a 12-month interest-free period, adding that government should encourage the private sector to invest in agri-business and research.
The Bank of Sierra Leone in a notice to all commercial banks and other deposit-taking financial institutions placed a number of restrictions on the number of over-the-counter limits for cash withdrawal.
Le 30,000,000 (NLE 30,000.00) for stated for individual per week. Le 100,000 (NLE 100,000.00) for corporate entities, noting that the Le 50,000,000 (NLE 50,000.000) for interbank cheques has been removed.
This according to the notice was to improve and modernize the payment system in Sierra Leone.
Copyright © 2022 Politico Online (01/08/22)
