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IMF fully supports de-dollarisation of economy

July 7, 2016 By Alusine Sesay

Resident Representative of the International Monetary Fund, Iyabo Masha, has on Monday told journalists that they fully support the president’s move to de-dollarise the country’s economy as a measure to handle the depreciation of the Leone.

Iyabo Masha noted that the depreciation of the Leone was largely as a result of external shocks related to the drop in the price of iron ore, which she said prompted mining companies to close down operations in Sierra Leone.

“The drop in the price of iron ore seriously affected the country’s economy, especially when the mining companies closed down operations. The mining companies were paying some of their staff in Dollars and most of them were selling in the market, which helped to stabilise the Leones,” she said.

A text message was widely circulated few weeks ago reportedly emanating from a statement by President Ernest Bai Koroma calling on all Sierra Leoneans to help sustain  the country’s currency by using the Leone instead of the U.S. dollars.

“I call on fellow Sierra Leoneans to buy, sell, lease, rent, hire and transact all businesses in LEONE. Together we can save our currency,” President Ernest Bai Koroma is reported to have said.

Central Bank Governor Dr Kaifala Marah has also met with heads of airlines, restaurants and hotels to urge them to charge fees in Leones.

He had earlier called on Members of Parliament to strengthen laws that would discourage, and if possible, criminalise the use of the United States Dollars in the country’s economy.

The Bank Governor was addressing members of the Public Accounts Committee, Transparency and Accountability Committee and Finance Committee in the House of Parliament.

“Honourable members, we are here today for you to give us your support in eradicating the use of dollar in the country. We need your support to ‘de- dollarise the Leone,’ which is our legal tender. It has now been the habit of people in this country to ask for rent in dollars. If you want to buy flight ticket it should be in dollar. Even if you want to pay for goods, you have to pay in dollars and that is a huge problem that is affecting us greatly. I want you to help us, even though there are financial laws that are not being implemented, to eradicate the use of dollar, and if necessary, call on the judiciary for the effective implementation of those laws,” he pleaded.

He said as a commodity exporting country, Sierra Leone suffered huge economic setbacks – drop in iron ore price from above $100 to way below $40 per metric ton, and the Ebola outbreak disease which negatively affected economic activities across the country.

 “As a commodity exporting country, we know that there have been challenges. Before now, we used to tell our sunshine story on how we used to be one of the fastest growing economies globally. And here in this Parliament, when I was Minister of Finance, I did say that we were doing well. The current President and his government did make significant changes as well as make progress across the board in all areas as enshrined in the Agenda for Prosperity. We are all aware that the two major mining companies – London Mining and African Mineral halted operations and we were not able to receive resources from the export of iron ore. Economic activities slow down, and particularly the agriculture sector suffered 50% drop, and to a very large extent, the country’s economy was exposed to challenges,” he said.

The move was overwhelmingly supported by Members of Parliament, especially those from the main opposition Sierra Leone Peoples Party (SLPP).

Hon. Dickson Rogers of the SLPP suggested that NRA officials should engage all ministries, departments and agencies in a bid to assist in ensuring that no dollar is used in collecting revenues, adding that the Central Bank should also send staff to all commercial banks and assist in distributing the local currency to all airlines.

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