The “New Direction” government of President Julius Maada Bio came to power on the promise of fixing the sinking economy and solve the “Bread and Butter” issues many Sierra Leoneans had been feeling grumpy about under the previous administration.

Gleaner Newspaper reports that Three and half year in governance, the Bio led administration has found it hard to fix the broken economy and the situation us worsening every day with the cost of basic food items soaring, while the local currency against foreign currencies.

The value of the ‘Leone’ depreciated in September 2021 against the US Dollar by 2.56%, according to the Bank of Sierra Leone (BSL) data. The mid exchange rate stood at $1=Le10,307.12 on August 31, 2021 and $1=Le10670.98 on September 30th, 2021, a depreciation that is difficult to analyze largely due to the country’s dominant informal economy.

The foreign exchange market is not developed enough to arable BSL to be effective in regulating the informal sector, especially when currency traders operating outside the legal framework wield enormous power in influencing the real exchange rate.

Moreover, the informal foreign exchange market is also largely cash-based, like other sectors of the economy. The problem with this cash-based economy was highlighted in December 2020 when many individuals and businesses said that they could not cash their cheques at commercial banks suggesting that the economy was among other things, suffering from a cash shortage.

One of BSSL’s reasons announced in August this year to redenominate Leone was to force cash hoarders to return their cash to the banking system.

However, many efforts have been made by businesses, especially commercial banks to develop digital payment systems such as bank transfers, mobile money and credit cards that have considerable potential to significantly reduce the cash-based economy.

Sierra Leone’s economic growth is feeble, as the main sectors of the economy such as mining, fisheries, agriculture, manufacturing and food-processing lack investments.

According to Gleaner Newspaper, by the end of November this year, the Bank of Sierra Leone is expected to execute the plan to redenominate the country’s legal tender, the ‘Leone’ by the removal of the three last zeros from the face value of the currency.