Redenomination of currency is not a new phenomenon. Most underdeveloped countries have gone through such an exercise with varying economic results. Ghana did it in 2007, and Zimbabwe did it in 2009. Both countries had significant challenges with the implementation, but Ghana had more positive results. This was because they had relatively stable macroeconomic conditions at the implementation time. Sierra Leone will not be an exception to this. However, the Government must ensure that the timing is right in other to have a positive outcome.
Why the timing could be wrong for the currency redenomination in Sierra Leone
The timing is wrong because our macroeconomic conditions are volatile. The Government needs to stabilize the economy by addressing lagging macroeconomic variables such as inflation, GDP, currency exchange rate, etc. Our national income has much more potential for improvement if we focus on our export-import ratio. Converting raw materials to finish products before exporting will add immense economic value, creating additional jobs that will reduce the unemployment rate. So many economic variables need urgent attention before introducing currency redenomination. The truth is that money’s actual value, or purchasing power, does not change ex-post. If you get paid le2,000,000 currently, and you spend 80% of your salary, then you will also spend 80% of your salary or even higher when you get paid le 2,000 after the currency redenomination.
The actual 2 year projected economic outlook in Sierra Leone might be so worse that it warrants the Government to move forward with the currency redenomination anyway.
How you can make a difference in developing the private sector in Sierra Leone
It’s time for Sierra Leoneans to support their own local businesses so that we can grow our economy together, create employment and begin to change the lives of our citizens and the country’s narrative. Let us hasten to inform you that 247bigmarket.com is Sierra Leone’s top online vendor marketplace that allows qualified vendors to sell their products to Sierra Leoneans in the diaspora. The process is very straightforward and modeled after traditional money transfer. You can place an order from anywhere in the world. Your family member in Sierra Leone will receive the products via delivery or pick up at the vendor store, depending on the vendor’s agreement and service.
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