Sierra Leone is rationing newly minted banknotes to prevent a cash shortage – following a currency redenomination that was itself meant to address cash shortages. Firms must apply to the Bank of Sierra Leone (BSL) for cash sums above new withdrawal limits. Looking forward, an effective payment switch and steady central bank management will be key factors for stabilising money supply and broadening the development of the financial system.


On 8 July, seven days after a currency redenomination where new banknotes with three fewer zeros were introduced, the BSL announced that:

  1. Cash withdrawals from personal bank accounts would now be limited to 30,000 new leones (USD2,180) per week.
  2. Firms have also been barred from withdrawing more than 100,000 new leones (USD7,267) per week.

This currency change was conceived in 2020 in response to a severe cash shortage that BSL governor Kelfala Kallon attributed to 'hoarding'. Now, he believes the banking system risks another shortage. Eight hundred million new leones were withdrawn from bank accounts in less than two weeks after the reboot – equivalent to about 10% of the national budget. This uptake prompted the central bank to set withdrawal limits. Kallon said on local radio last week. "We're seeing evidence that perhaps people are going to start doing what they have done that almost brought this country to its knees."

The BSL governor has not clarified his claim about money hoarding, but most people and businesses in the country must hold adequate cash because the financial system is not yet well-developed. Only 29% of Sierra Leoneans aged above 15 have a bank or mobile money account, most of the country's 130 ATMs are in the capital Freetown and interbank transfers are limited in the absence of a payment switch.1 2 Businesses heavily depend on cash to pay workers and cover other operating costs.

The BSL's tendency to tinker with the rules has also dampened public faith in the financial system. In 2020 for example, the bank set foreign exchange restrictions that were later lifted when local banknotes became scarce. Then it began offering US dollars to bank customers in exchange for depositing leones. This was again suspended when the central bank noticed the cobra effect. Now, firms have been told to apply to the central bank for cash sums higher than the new limits and then account for their spending if they want more cash in future.

The latest policy changes are happening as the country prepares for general elections in June 2023. See: Sierra Leone proposes new electoral law before 2023 polls. President Maada Bio will be running for a second term and banking on the BSL to produce effective monetary policy on time. Meanwhile, the economy is feeling the impact of disruptions in international markets. Fuel prices have more than doubled since the start of the year and inflation has risen from 17% to 25%. See: West Africa's fuel price reality and


The World Bank is collaborating with the BSL to launch a payment switch before the end of this year. This will follow the enactment of the National Payment Systems Act, 2021. A four-year National Financial Inclusion Strategy is also being implemented to increase account ownership, boost digital payments and cut reliance on cash.

Further progress is hinged on stable central bank leadership, which will especially be a concern if a change of government occurs next year. Although the central bank governor is nominally guaranteed security of tenure, the precedent indicates his continued stay in office will be determined by the outcome of the presidential election. A robust monetary policy is unlikely to take root in the interim.


1 2022-2026 National Strategy for Financial Inclusion (January 2022). Bank of Sierra Leone.

2 Account ownership at a financial institution or with a mobile-money-service provider (2021). World Bank.

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