By zainab.joaque@awokonewspaper.sl
Freetown, SIERRA LEONE – The Ministry of Finance has published the Action Plan to address the Corporate Governance challenges in the State-owned Banks (SOBs).
This document was a Performance Criterion under the International Monetary Fund (IMF) Sixth Review, as Government is required to develop this document for the two SOBs: Sierra Leone Commercial Bank, and Rokel Commercial Bank Ltd.
To ensure the robustness of the assignment, as well as transparency in the process, the Ministry of Finance said Government requested the World Bank (WB) to provide technical assistance for the review of the corporate governance framework of the two SOBs with the aim to identify the current corporate governance challenges and proffer remedial measures.
As a result of their request, the WB recruited a consultant to work with an advisory committee, comprising the Deputy Governor, the Financial Stability of the Bank of Sierra Leone (BSL) and his staff, the Financial Secretary, and the team from the Ministry of Finance, and the Managing Directors of the two SOBs.
The team was able to produce an Inception Report, a Gaps Analysis, and a Final Report with recommended actions to be taken by BSL, MOF, and the two SOBs.
The document, citing the rationale for Government involvement, stated that Government ownership should be justified in a mandate addressing market failure, and financing gap, and pursuing development goals, which should be clearly stipulated in laws or regulations.
Such laws and regulations should provide the objective for Government ownership and justify the use of scarce public resources.
With reference to the actions that are to be taken, the BSL will incorporate this issue into the examinations after the regulation is issued. The process of formulating the regulation for the state-owned-enterprise (SOE) Ownership has started and is expected to be completed by May 2023.
In addition, the role of state-owned banks should focus on complementing rather than substituting for services provided by private banks. ZIJ/13/3/2023