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Sierra Leone Business: Dollar effects on the market

For the past two decades, the prices of commodities are tied with the exchange rate of the American dollar in the Sierra Leone market structure. And the Dollar price even determines the prices of major commodities including locally made products.
The country’s legal tender, the Leone continues to depreciate against major international currencies especially the United States Dollar and this is causing a severe burden on businesses.
Within the last two months, the rise of the US Dollar, compared to the Leones caused a major effect in the prices of commodities and even affected the standard of living of the average Sierra Leoneans.
Just under a week ago, the dollar price rose from Le8,600 to Le9,300 per $1 dollar, causing major alarm in the country. The Governor of the Bank of Sierra Leone Patrick Conteh was replaced by Professor Kelfala Morana Kallon subject to parliament approval.
Alpha Bah a pharmacist, said “the high rate of dollar is affecting my business badly and as a result of that, I need to increase prices of important drugs in order to march with the exchange rate for future purchase.” He said it is the first time in the history of Sierra Leone for dollar to rise in such a magnitude.
A provision shop owner at Abacha Street, Mohamed Barrie averred that “everything currently in the market has increased due to the price of dollar.” He said they are getting supplies from their business partners, who normally use the dollar to buy their business abroad. He said they need to recover their expenditure and also make some amount of profit and as a result of that prices have to be increased.
Sierra Leone currency, has depreciated by almost 30% since 2017. Inflation is running high estimated at around two digits, putting prices of basic household goods beyond the reach of many Sierra Leoneans, as the economy struggle to pick up
Isatu Turay a local trader said Sierra Leone is not using dollar as it legal currency, citing that prices should not increase as a result of the US Dollar. She said every product in the market has sky rocketed as a result of dollar even to gari which is made in Sierra Leone. She called on the government to take the necessary steps to tackle such problem.
James Foday an Economist maintained that Sierra Leone is not exporting any product of late to other countries in order to make the Leone value. He said 2012, the country economy was booming as a result of the major export in the mining sector. Foday re-echoed that the lack of export in the country is affecting the change rate presently.
Few day ago the government, through Bank of Sierra Leone decided to auction $5million Dollars in order to stabilised the country legal tendency and reduce the deficit of Dollar to that of the Leone.
Moses Kamara a black market Dollar dealer said “the change rate for now has dwindled, since the government put $5m for auction. He said the dollar rate has dropped from 9300 Leones to 8600 Leones. He said Even though little change had occurred since the auction, but noted that prices are very high still in the market.
By Zainab Iyamide Joaque
Monday August 27, 2018.

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