TITLE:
Challenges and Opportunities for Financial Sector Development in Sierra Leone: An Institutional and Policy Perspective
AUTHORS:
Alhaji Sorie Ibrahim Barrie
KEYWORDS:
Challenges and Opportunities, Financial Sector Development, Institutional and Policy Perspective, Sierra Leone
JOURNAL NAME:
Modern Economy,
Vol.15 No.10,
October
23,
2024
ABSTRACT: This paper explores the challenges and opportunities for financial sector development in Sierra Leone, a country with a fragile post-conflict and post-crisis economy. Despite various reforms aimed at strengthening the financial system, it remains underdeveloped, characterized by limited access, shallow financial depth, and inefficiencies. The study employs the IMF’s Financial Development Index to measure financial sector performance and examines key factors hindering progress in the sector, including macroeconomic instability, political fragility, weak institutional frameworks, low levels of financial literacy and large informal sector. Empirical evidence shows that these factors are significant obstacles to the progress of the financial sector. However, opportunities exist for improvement, particularly through sustained financial literacy programs, legal and regulatory reforms, and macroeconomic stabilization efforts. The paper concludes by recommending prioritized interventions by the government and international development partners to address these challenges, with a focus on strengthening institutions and fostering a stable economic environment conducive to long-term financial development.