Bank Governor of Sierra Leone clumsily explain why he said he bribed the financial market

Sierra Leone Telegraph: 27 November 2021:

After getting himself into serious hot water for saying that the Bank of Sierra Leone had used $68 million in bribing businesses and individuals in order to stabilise the country’s currency – the Leone, now he says he used the word bribery figuratively as an economics professor, to describe his what he said is similar to consumers paying more for a product so as to get producers to supply more of the product.

But his explanation does not seem to chime with his fellow economists, who say they are baffled at such a simplistic and faulty analogy as a Banker and a professor of economics that cannot be found in any economics textbook.

Many Sierra Leoneans believe that his use of the term bribery as announced openly in parliament this week, was a serious gaff and lack of communication skills; and what the Governor should be doing instead of trying strenously and unconvincingly to justify his use of the term Bribery in this context, is to simply apologise for his mistake and move on.

There is no justification in economics textbooks for the use of the word Bribery to desctribe any legitimate economic transaction. You got this one wrong professor Kallon.

The Governor’s inability to accept his mistake, smacks of gross arrogance, incompetence and dishonesty which many would find troubling for a Governor of the country’s central bank.

So, what exactly did the Bank Governor say to MPs this week that has attracted such condemnation and lampooning?

This is what he told members of parliament that got the financial market spinning this week:

“We wasted $68 million to bribe people who were hoarding Leones to bring it into the banking system. I asked myself: we have worked so hard during the past two years to build a reserve for this country. Is it going to be sustainable for us to keep bribing people to take Leones, and when we bribe them, they bring the Leones, then they take it back; then we have to bribe them again.’’

You can watch this video of the Bank Governor trying to justify his use of the word bribery in the context in which it was used:

 

The Bank of Sierra Leone also issued a public statement yesterday, accusing social media commentators and newspapers of twisting what the Governor said: This is what the statement says:

“The attention of the Bank of Sierra Leone (the Bank) has been drawn to a mischaracterisation of a statement the Governor made in Parliament by some newspapers and a video clip circulating on social media, both deliberately and maliciously misconstruing the said statement. In view of the above, the Bank makes the following clarifications:

  1. In his pre-legislation presentation to Parliament on the 22nd November, 2021, relating to the redenomination of the Leone, the Governor, Professor Kelfala M. Kallon, mentioned the massive hoarding of Leones, starting in June 2020, as one of several factors justifying the Bank’s decision to redenominate the currency.
  2. To address the cash shortage that resulted from the aforementioned hoarding, the Bank started spending substantial sums of money on ordering and airlifting replacement notes, which were similarly withdrawn from circulation and hoarded. Consequently, the Bank was compelled to conduct monetary operations wherein United States dollar notes were swapped for Leone notes through the commercial banks. Customers participating in the swap would deposit Leone notes in their commercial bank accounts, which were swapped at the Bank for US dollar notes, and the US dollars paid to the customers who made the deposits. However, as soon as the deposited Leones were put back into circulation, they were also quickly withdrawn and hoarded, thereby creating a need for another round of dollar-Leone swap. By August 2021, the Bank had spent about 68 million US dollars on this operation.
  3. The Governor figuratively used “bribery” to describe this sequence of hoarders exchanging their Leone notes for US dollar notes and then withdrawing the recirculated Leone notes so that the Bank of Sierra Leone would be compelled to buy them back with US dollars in order to avert catastrophic shortages of cash in the banking system.
  4. In the Question and Answer session following the presentation, two members of Parliament asked the Governor why he used the word “bribe”, given that some journalist in the room would go and twist it in ways that the Governor would regret.
  5. The Governor responded that, while a professor, he had often used “bribe” in his lectures to explain to students that consumers often “bribe” producers with higher prices as incentives for the latter to increase the supply of commodities in short supply. To clarify what he meant by “bribe” in the instant case, he used the example of the willingness of consumers to pay higher prices for peppers so that farmers would supply more peppers to the market when they are in short supply. It was in this context, he concluded, that he used the verb “bribe” to explain how the Bank of Sierra Leone used 68 million US dollars to bring Leones back into the banking system.
  6. It is unfortunate that in spite of this explanation, some newspapers and persons on social media chose to deliberately mischaraterise the Governor’s nuanced statement as a confession that he had engaged in bribery.
  7. The Bank wishes to make it categorically clear to the public that all its monetary policy operations, including that between June 2020 and August, 2021, are driven by only its duty to maintain the stability and soundness of the financial system, and nothing else.
  8. The Bank further wishes the public to know that it is unflinchingly committed to redenominating the Leone and putting controls in place to prevent its hoarding in the future. In this regard, it further wishes to inform the public that, as soon as the legal instrument that has been laid in Parliament matures, a full-scale nationwide sensitisation of the population will commence.”

11 Comments

  1. Even President Joe Biden who is commonly known as a “Gaffe machine” has been elected, because the people understand facts from gaffes or blunder.

  2. It’s rather unfortunate that the purpose of the parliamentary meeting which supposed to be about the education of the parliamentarians with regard to the NEW LEONE has been distracted by this gaffe.
    Thanks to our “Talk and Do” Bank Governor Professor kelfala Kallon for his strategy of defeating the Economic Saboteurs who have been working against the New Direction government. Now they have no option but to surrender their hoardings to the central bank or else face the economic consequences. Soon, most of the Fake Millionaires will disappear because we will have the opportunity once again to use real Leones and Cents which will help us pegged our currency against the ECO or the EURO. The bank Governor should stay focused and deliver his promises.

  3. Andrears Whittam Smith, the first editor of the Independent newspaper said:”To say that somebody is independent – minded indicates no particular profile. It simply define an attitude. You immediately recognised the independent – minded when you meet them” In my case during my nomadic browsing of an independent news outlet from Sierra Leone, free from political alliances, or mouthpieces of the government of the day, I struggled to find one until I read the publication of the Sierra Leone Telegraph. Immediately I realised if anything the publication reflects the values, ethos and the journalistic instincts and the truth that I have been seeking through out my nomadic journey in the wilderness of the Sierra Leone media landscape, mostly dominated by political alliances, and for the vast majority of newspapers, depressingly hardly reports on the facts as the Sierra Leone Telegraph does, but rather act as propaganda mouthpieces for the sitting governments of the day.SLPP/APC depends who is in State House.

    If anything, it is for that very reason the Sierra Leone Telegraph commands so much respect and loyalty from its readership. And if you want to read anything independent and free from partial political dogmas, or the tribalistic and regional politics that dominate some of the media ecochamber, the Sierra Leone Telegraph is the one to read. The proof of the pudding is in the eating. In other words, its not me saying it, but just go back and read past publications of the Sierra Leone Telegraph, when the APC government of Bai Koroma was in power. The Sierra-leone Telegraph was the one of few news outlets that was holding that government’s feet to the fire.

    So the suggestion made by Mr John, that Mr Thomas and the Sierra Leone Telegraph are members of the Bio bashing brigade, is not only wrong, but if he’d taken his time and read past publications, he would have noticed the guiding principles have always been to promote diversity of different opinions, points of views of everyone, without being censured or muzzled by fellow contributors on his platform. Compared to other social media outlets, he’d done a superb job to keep it civil. And some times, knowing how difficult to police our out of character Sierra Leonean opinions that can be heated, because everyone thinks their opinion is the one that matters. The rest of us can either shut up or put up. Here is where people agree to disagree. And say after all we all want good things to happen in our country. Something to make us all proud. And the Sierra Leone Telegraph epitomised that.

  4. Either the man is incompetent or corrupt,neither of which bodes well for the country, however, in the current scenario in Sierra Leone, tribal affiliations are worth more than finding progressive people.

  5. As a university professor and an economist, the bank governor is held to the highest of standards. This is not some yokel that can be guilty of malapropism, to borrow a phrase from one of the comments, if it looks like a duck, quacks like a duck.

    In economics language bribery is bribery. Let us not go into semantics.

  6. This Bank Governor is a boffoon. He hardly inspires confidence in our local financial market let alone foreign investors. The man has lost every little respect he once had. As for his professorship, let him try going back to the classroom and see if he will find a job.

    Only in a inept Bio-led Paopa government will you find characters like this. The man cant even communicate clearly to save his reputation let alone our dying economy. Sierra Leone has become a laughing stock!

  7. With the greatest of respect this Bank Governor is not qualified to hold this very important position. Many have called for such positions to be non partisan occupied by people qualified to do so who can take decisions independently without being controlled by central government. By his own admission the professor despite having a background in economics has spent decades teaching in the classroom before this role. Whilst using the word bribery in a classroom setting might be acceptable unfortunately in the real world of economic management it is not. Therefore he lacks current professional experience in monetary policies amongst others. Had this job been advertised he would have struggled to even get short listed.

    The change we want to see is for these positions to be filled through a fair selection process. Having qualifications on paper is one thing the ability to perform the role based on previous experience is another.

  8. Yes a gaffe or misconstrued words. Whether Dr Kallon the governor of the Central Bank , charged with holding and managing our country’s foreign exchange reserves for the purpose of paying government liabilities or acting as a back up incase the national currency the Leone suddenly devalues, or become insolvent.Mostly this reserves like US dollars ,bank notes, treasury bills, deposits, and other government securities are held to stabilised our economy and act as a lender of last resort if our government finds itself in the unlikely position they can’t pay their bills.. And in the context of Sierra Leone economic performance, our country will need all the foreign reserves in the world to aviod a complete economic meltdown. So this is a serious issue and should be treated as such.

    The use of the “Bribery” word to hammer home the importance of having a healthy foreign reserves, is not the best way to attract foreign investors in our country or act as confidence building that economically our country is heading in the right direction. We can’t bribe our way to economic growth. Is just not feasible. His speech to our Parliamentians might not raise a lot of eye brows in such settings because that is the sort of language they are use to. If he’d said we are working on increasing our foreign reserves, by offering a better fixed exchange rate of the Leone to the dollar,and encourage traders and tourists to use the official channels set by the Central Bank of Sierra Leone , to exchange their dollars to the Leone instead of some corners of the black markets of Belgium market,or other places, where traders are known to horde dollars and other foreign currencies instead of depositing those monies in to their banks accounts, then we know he is serious . In the long run the central banks will have more funds in US dollars, the world’s reserve currency.

    For us Sierra Leoneans, that knows how corruption is endemic and widespread in the country, his lack of sensitivity of the use of such language,and coincidentally as the ACC charged the Dr Samura and others for misappropriating public funds, what sort of message is Dr Kallon sending to a public officials that are currently misappropriating public funds for their own private use.?What Dr Kallon is caught saying, is not only an insult to the intelligence of Sierra Leoneans, in a different context, is like someone diagnosed with terminal cancer, corruption in the case of our country, then the medical doctors meant to carry out the chemotherapy is caugth making fun of the patient as they lying on a life support machine with tubes inserted in all parts of their body, with family members gathered around their death bed hoping and praying they make it through. Is difficult to see how our country can recover from the economic mess Bionomics had led our country into. This is the sort of leadership we have in Sierra Leone. The people that are in high position of power that can really make a difference in people’s lives, are so out of touch with the realities of every day life. For some like Dr Kallon, poking fun of us in the houses of Parliament, is like one is partaking in a comedy central sketch. I mean you can’t make this stories up . Is Bio going to sanction the Bank Governor, or he is going to give him a slap on the wrist, and tell him to mind his language in the public space.

  9. Mr Rashid, take a look @ your head line in this article. It’s still a mischaractetization in context in which the bank governor was referencing.. I’m beginning to wonder about some of your articles towards the administration. There is a saying: ‘if it looks like a duck, walks as a duck, quarks like a duck; then it’s a duck. Tolongbo?

    • Mr John – are you seriously accusing the Sierra Leone Telegraph of being Tolongbo? We respect your right to own your opinion but not to your own facts which may be polarised by your obvious partisan sentiment. Have a good day Sir. Lol

    • You Greengoes are pathetic. You dont like the message so you shoot down the messenger! Its either you have not been reading the Sierra Leone Telegraph or you are in denial of the truth even when its smacks you on your head. Go and read past stories of the Telegraph and come back and tell us that this paper does not publish good stories about your failing government. Bo leh we yeri far!

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