Sierra Leone hopes to gain competitiveness on its exports and fight against inflation which was around 12% in 2021.
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Sierra Leone launched the new coins and banknotes, which drop three zeros from the old ones, in an effort to restore confidence amid high inflation. The cost of goods and services remains unchanged with the introduction of this measure, the Central Bank said. A 10 New Leone note has the same value as a 10,000 Old Leone note, the equivalent of just under one US dollar ($0.75). With this change, Sierra Leone hopes to gain in competitiveness on its exports and to fight against inflation which was around 12% in 2021. It also wishes to restore confidence in the Leone to facilitate the conversion to other currencies.
The old monetary regime inflicted great losses on the country’s economy with large amounts of banknotes needed to carry out simple transactions. “Our current banknotes are too big” To hold “in a wallet and we spend a lot of money printing big bills” observes Kelfala Murana Kallon, Governor of the Commercial Bank of Sierra Leone. “We are removing the ‘zeros of shame’ to properly align the currency”, said Morlai Bangura, director of monetary policy at the Bank of Sierra Leone. He assured that the new, smaller banknotes will reduce the costs of producing, distributing and processing the currency, without giving the cost of the operation.
Despite a soil teeming with diamonds, Sierra Leone is one of the least developed countries in the world. The former British colony and its 7.5 million people were still recovering from a brutal 1991-2002 civil war and the 2014-2016 Ebola outbreak in West Africa when they were hit by the Covid-19 pandemic, then by the consequences of the war in Ukraine. Since the announcement in August 2021 of the introduction of the new currency, the Central Bank has raised public awareness and declared June 30, 2022 a public holiday to prepare systems and transactions for the circulation of the currency.
Sierra Leoneans will be able to use the old and new currency for a transition period until September 30. From October 1, only the new Leone will have a legal existence. The population will then be able to exchange the old currency for the new until November 15, 2022, according to a public note from the Governor of the Central Bank.