Central bank of Sierra Leone capacity building component of the financial sector development plan
- Référence: P-SL-HA0-004
- Date d’approbation: 30/11/2011
- Date de début: 12/09/2012
- Date d'évaluation: 29/11/2011
- Statut: En coursOnGo
- Agence d'implémentation: BANK OF SIERRA LEONE
- Emplacement: SIERRA LEONE
The project beneficiaries will be selected departments in the Bank of Sierra Leone. Project implementation will be through the FSDP secretariat which is a division with the office of the Governor of the Bank of Sierra Leone. The Head of the FSDP secretariat reports to the Deputy Governor of the Bank of Sierra Leone. The Head of the FSDP secretariat will be responsible for day to day management of the project. BSL is responsible for all procurement and financial management with Integrated Policy Analysis Unit (IPAU) at the Ministry of Finance and Economic Development providing back-up support for procurement and financial management.
Research Department The main function of the research department is to provide analysis of developments in the Sierra Leonean economy to aid the Bank in pursuit of its objectives of maintaining monetary and financial stability, supervision of the banking sector, support national growth and employment objectives and provide economic advice to management. The research department hosts the statistics division which has a primary responsibility for producing monetary and other financial statistics and support the Monetary Policy Committee secretariat. To aid the implementation of its core functions, the department is seeking technical assistance and capacity building support to
(i) hire a consultant for 12 months who will support the department to build capacity to meet the demands of its core activities;
(ii) local and overseas short term training of staff,;
(iii) purchase of computers and office equipment.
Banking Supervision Department The Banking Supervision department is responsible for supervision and regulation of 13 commercial banks, 9 community banks, 2 discount houses, 39 forex bureax, 1 home finance company, 1 deposit taking MFI and 6 credit only MFIs. The challenges of the BSD are lack of computers and office equipment, limited staff capacity, inadequate supervisory and regulatory procedures and practices and the challenges of migrating from compliance based to risk based supervision. To address these challenges, the department will recruit a consultant to develop and implement a risk-based supervision framework for bank and non-bank financial institutions, review of the supervisory and regulatory practices and procedures (both on-site and off-site) and the purchase of computers and banking software.
Audit Department The internal audit department is responsible for the independent, objective assurance and consulting activities designed to add value and improve the Bank's operations by evaluating operations, internal controls, risk management and governance processes especially monitoring the WAMZ payment system project and the financial sector development plan. The audit department propose to train 1 staff at masters level in audit management, 2 staff as certified information systems audit, 2 staff as certified internal auditors and conduct study tours (6 staff) on auditing of automated payment processes and transactions in BCEAO, BEAC and Central Bank of Nigeria to expose staff to auditing payments systems/infrastructure through attachments in central banks with automated payment systems.
Record's Management The Bank of Sierra Leone wishes to strengthen its existing records management system to pave the way for electronic records management which is a priority area for most central banks in developing countries. The business process environment is changing rapidly and the storage and management of reliable and auditable documentation in electronic form is essential to the efficient operation of BSL. The existing records management process is largely skewed towards manual or paper based documentation and records management structure with its inherent problems ranging from congestion of working file facilities, an inefficient archives system, ineffective filing and slow speed of document recall, security hazards for storage and of an un-clear and non-definitive file retention and disposal policies.
These issues need to be addressed urgently in order to reposition the Bank to effectively compete in an industry that is moving towards an electronic and automated system in most of its working processes especially so as the BSL is the leading financial institution in the industry in Sierra Leone and for it to be able to carry out its mandatory supervisory and monitoring role over commercial banks and other financial institutions.
The objective of the project is to enhance the capacity of the Bank of Sierra Leone as the apex financial institution to formulate, coordinate and take a pro-active leadership role in advancing financial sector reforms and implement the Bank of Sierra Leone Institutional Development Plan.
12. To enhance a more diversified and sustainable financial sector development, the capacity of the Bank of Sierra Leone's oversight functions and legal and regulatory framework as well as establishment of credit information infrastructure has been included in the Government Financial Sector Development Plan (FSDP).
13. The project will provide technical assistance and institutional support to four departments as well as the FSDP secretariat to support the Bank of Sierra Leone Institutional Development Plan that will be essential to the achievement of the goals of the FSDP.
As a post conflict country, the financial sector in Sierra Leone is starting from a low base and it has experienced significant growth that has challenged the institutional framework charged with safeguarding its development. The peace dividend and economic opportunities have attracted a number of new entries into the banking system, dominated by subsidiaries of Nigerian banks.
15. The Sierra Leonean authorities have made financial sector development a key pillar of their economic development strategy. The financial sector has potential to grow and attract new entries and fund private sector growth especially in the extractive industries and agricultural productivity. This has to be supported by a strengthened operating environment to safeguard financial stability and enable financial institutions to reach beyond their traditional urban based clientele.
16. The Bank of Sierra Leone is charged with coordinating and supporting the implementation of the FSDP and has developed a detailed implementation plan which provides a robust foundation for implementing reforms and coordinating donor support. The FSDP secretariat has been established within the BSL as part of the office of the Governor. Developing the financial sector needs a strong apex institution that formulates adequate policies to enhance access to finance and coordinate stakeholders' activities and take a pro-active leadership role in advancing sector reforms. To meet this challenge, the Bank of Sierra Leone has drawn up an Institutional Development Plan with the objective to increase its capacity to formulate and implement monetary and supervisory policies to foster a sound economic and financial environment.
17. A sum of UA 807 018 will be allocated to the Bank of Sierra Leone to strengthen the banking system. This will include technical assistance to:
(i) develop a bank-wide information technology policy and strategy;
(ii) develop record management systems; and
(iii) develop policy and strategy to support the implementation of risk-based internal audit operations, staff training and the recruitment of competent technical assistance.
18.The Sierra Leone financial sector has the potential to grow, attract new entries and fund private sector growth. The most immediate concerns are to enable the Bank of Sierra Leone to safeguard the positive growth trends through strengthening its oversight capacity and strengthen the policy framework and key market infrastructure to allow more diversified and sustainable financial sector development to take place.
19.The FSF Pillar III support, complements ongoing activities of other development partners in the financial sector including
(i) the AfDB WAMZ payment system project;
(i) the World Bank Financial Sector Development Plan;
(iii) the KfW/UNCDF/UNDP/CORDAID funded Micro Finance Technical Assistance;
(iv) IMF technical assistance for banking supervision and
(v) the IFAD rural finance project. This project will complement these various programs and build the capacity of the Bank of Sierra Leone to lead and coordinate the various reform activities within the framework of the FSDP.
20.The World Bank is providing a grant of US$4.00 million for the Financial Sector Development Plan Support Project to two pillars
(i) enhancing access to financial services and
(ii) building financial sector reform and oversight of the Bank of Sierra Leone. The FSF Pillar III grant will complement Pillar II of the WB support and the activities that the FSF will support will not duplicate those areas that are being supported by the WB or other development partners.
21. The implementation of the FSDP will be streamlined into the existing structures of the Bank of Sierra Leone instead of creating a separate Project Implementation Unit. The WB conducted a safeguards assessment mission and the Bank's accounting department was assessed to have the capacity to carry out financial management functions. To this end, the organogram of the accounts and budget department was revised and additional accountants recruited by the BSL. In addition, the BSL has a fully functional procurement department.
22.The expected results of this project are:-
(i) Assist the Bank of Sierra Leone to strengthen the implementation of the Financial Sector Development Plan for creating sound diversified responsive and well functioning financial system.
(ii) Strengthen the supervision of the growing financial sector in the country.
(iii) Help to establish an electronic records management system to carry out its mandatory supervisory and monitoring role over commercial banks and other financial institutions.
BANGURA Ibrahim Ansu - ORTS1