The Governor of the Bank of Sierra Leone Sheku Sambadeen Sesay has stressed the importance of “inclusive growth” as a desirable policy objective that will help ensure political stability through the equal distribution of wealth to all sectors of society.
He made this statement while delivering the Governor’s Annual “state of the economy”at the Bank Complex Friday 1st February 2013under the theme “Inclusive Growth and Development: The Role of the Bank of Sierra Leone.”
Explaining his concept, Governor Sesaysaid “Inclusive growth will help ensure political stability through the equal distribution of wealth to all sectors of society, while reducing the risks of uprisings which emanate from extreme disparities in the distribution of social facilities, wide income inequalities, and lack of opportunities for disadvantaged groups such as the disabled youth and women.”
This he said can be achieved only when emphasis is placed on “equal opportunity in terms of access to markets, resources, and an unbiased regulatory environment for businesses and individuals.” Noting that it was important to ensure that growth takes place in the agriculture and mining sectors because they employ the majority of people and therefore have the highest levels of poverty, the Governor added that“emphasismust be given to the rural areas in job creation, access to finance and provision of social infrastructure, while not ignoring the urban poor who may also be financially excluded.”
Generally he said there is a need for raising the efficiency of investment and resource use across different sector of the economy by focusing on “effective credit delivery to facilitate productive investments in employment creating sectors and large scale investment in infrastructural facilities and social programsuch as health and education.”
He said that for the economy to grow and Sierra Leone to achieve middle income status consistent with the Agenda for Prosperity, the financial sector has a major role to play and that the Bank of Sierra Leone will help to maintain a stable and predictable environment for government and private sector planning and operations which boosts economic growth and employment.
The Bank Governor said the Bank’s policies in the next twelve months for promoting inclusive growth falls under four main pillars which include maintaining macroeconomic stability, promoting international competitiveness, expanding financial inclusion and enhancing the efficiency of the financial sector.
He said with the independence of the Bank of Sierra Leone as guaranteed by the Bank of Sierra Leone Act. 2011, “we will sanction severely any bank that fails to comply with the prudential and regulatory guidelines to send a positive signal to genuine and positive investors.”
He also said that the Bank will also significantly increase the minimum capital requirement in order to enhance the capacity of commercial banks to finance private sector activities which is a necessary ingredient for growth.
The Bank Governor expressed the need for urgent recapitalization of the central bank to help the Bank to expand its outreach to better perform its core functions and noted with satisfaction that with the introduction of the ‘Black Book’ at the Bank of Sierra Leone which keep records of “miscreants” has helped reduce incidences of fraud in the banking system.
He expressed commitment to supporting the structural transformation of the economy and assured that a monetary policy and other development functions would help cement the Agenda for Prosperity.
On the domestic economic development the Bank Governor said the Sierra Leone economy continues to experience significant growth with real GDP estimated at 18.2 percent including mining activities, and 6.3 percent excluding mining for 2012 as compared to 6 percent in 2011.
He also said “I am pleased to report that inflation has been on the decline since the start of 2012 as at end of December 2011 inflation was recorded at 16.64 percent and by end of December 2012 it was 11.86 percent.”
The Bank Governor said “our gross external reserves increased by 11.55 % from US$ 376.79mn at end of December 2011 to US$ 420.31mn at the end of 2012 which is equivalent to 3 months of imports cover.
He said total assets of the banking industry grew by 19.46 % from Le2.98 trillion in 2011 to Le3.62 trillion in 2012 while pre-audited industry profits increased by 20.65% as all banks recorded profits in 2012.
He said the total number of bank accounts increased by 18.26 percent over the twelve months period from 513,503 in 2011 to 607,309 in 2012.
On the global economic developments the Bank Governor said the global economic environment in 2012 was weak with the greatest risk to recovery being the vicious cycle of high unemployment, the fiscal grid lock in the United States and the lingering Euro zone financial and economic crisis as well as the slowdown in output growth in the key emerging Asian economies.
On the Sub Regional Economic Development he said the ECOWAS sub region posted strong economic growth in 2012 of around 5.5 percent despite instability in Mali and Guinea Bissau.
The Governors annual address was climaxed by award of scholarships to the best WASSCE students in the country by Professor Redwood Sawyer on behalf of the Bank’s education trust fund.
By Saidu Bah