Sierra Leone's Central Bank Governor Removed Months To Elections

• Published date: 03 April 2023
• Subject Matter: Finance and Banking, Financial Services
• Law Firm: Songhai Advisory LLP
• Author: Songhai Advisory LLP

The governor of the Bank of Sierra Leone (BSL) has been effectively sacked, two months after the finance minister was dismissed. Both occur against the backdrop of a currency redenomination programme overtaken by external volatilities.

While Sierra Leone's macroeconomic challenges continue to shape the operating environment, policy and appointments are being determined by the political calendar chiefly. The Sierra Leone People's Party (SLPP)'s President Maada Bio will run for a second term in June and recent dismissals should be understood in the context of those preparations.

There may be more cabinet level dismissals/reshuffles after June depending on whether: (a) power shifts to the opposition All Peoples Congress (APC), or (b) the SLPP wins but home-regions of specific cabinet ministers underwhelm.

Significance - Currency

On 13 March, President Bio sent BSL governor Kelfala Kallon on 'indefinite leave' and appointed his deputy Ibrahim Stevens as interim head. By this, the president tried to bypass the law protecting the bank from political interference.¹ A two-thirds majority in parliament is legally required to sack the governor.

Kallon had been struggling to steady a currency redenomination programme that he began in July 2022 following cash shortages.

• Three zeros were lobbed off the leone and the bank began rationing new banknotes under cash withdrawal restrictions.
• But this soon caused...