Central Banks: 

Indicators of Convergence

According to the West African Monetary Zone Programme, in order to achieve harmonization the following criteria should be observed: -

Primary Criteria

  • Fiscal Deficit (excluding grants) in percent of GDP < 4
  • Inflation Rate (yr-on-yr) (%) Single digit
  • Central Bank Financing (% previous year’s tax receipts) < 10
  • Gross Foreign Reserves (in months of imports) > 3

Secondary Criteria

  • Domestic Arrears (in millions of Leones) 0.0
  • Tax Revenue (% of GDP) > 20
  • Wages of Salary Expenditure (% Total Tax Revenue < 35
  • Real Interest Rate > 0
  • Real Exchange Rate/Leones/US$ Stable
  • Public Investment/Tax Revenue Ratio (%) > 20
Central Banks: 

External Sector

Central Banks: 

Banking System

The banking industry in Sierra Leone, presently consist of six (6) commercial banks.

Prior to the rebel incursion in the country, these commercial banks operated a network of branches in all the major towns in the country.

However, most of their activities were curtailed as most branches closed down due to the insecurity that prevailed during those years.

Since relative peace has returned to the country, the banks have resuscitated their activities in most of the provincial areas and the Freetown environs by reopening their branches.

Central Banks: 

National Payment System

The National Payment System, a modernization project was launched in October 2002, to provide an efficient customer centered payment system designed to meet the payment needs of the country.

Limitations of the current Method of Payment

The current methods of payment in Sierra Leone have various shortcomings such as delays in settlement periods, high costs, and risk of fraud. The most common instruments that characterize these payment methods are cash, cheques, and to a limited extent electronic payments.

What has been done so far

The Director of Banking is the Chairman of the project committee and the main objectives are to minimize payment, clearing and settlement risks and achieve reliable, secure, convenient, cost effective, universal and integrated systems to meet the needs of the economy.

More specifically, the major issues under focus include the following:

  • Problems associated with the NPS, background of the country’s culture and economy and the country’s national payment system needs.
  • The infrastructure situation and state of automation within and between bank branches and their customers.
  • The key legal structures that affect payments.
  • The existing payment instruments.
  • Inter bank clearing and settlement systems.
  • Risks associated with payments in the country.

To streamline and reduce on settlement delays the Central Bank adopted a two clearing system to ensure that all high value payments are finalized on transaction dates.

However, the committee is still working on setting modalities for the implementation of a modernized and more robust National Payment System in compliance with WAMI standards.

Central Banks: 

Sierra Leone Government Securities


These are government securities introduced in 1993 with a 12 (twelve) month term to maturity. They are issued in the primary market at face value in monthly auctions. Since interest payments are made quarterly, four interest coupons are attached to the TBB certificates, which are presented on maturity to the commercial banks for interest payment. Commercial banks and the Discount House participate in the primary market as agents through which customers bid for Treasury Bearer Bonds.

Currently treasury bonds are issued in certificated bearer form but reform measures in the form of a Book-Entry System and other IT infrastructure are being put in place to support the de-materialised issuance of these treasury bonds and promote the development of secondary market in government securities.


These are short-term government borrowing instruments introduced in 1964 with a 91 day term to maturity. As investment assets they are sold by auction in weekly lots with tap issues to Discount House, banks and other public agencies. Treasury bills are issued through commercial banks and Discount Houses as primary market dealers, on a discount basis - that is, they are sold originally at a price below their face value, with face value payable at maturity. The difference between the price and face value constitute the interest payment. Treasury bills remain an important financial instrument with a significant role in monetary management.

Central Banks: