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Sierra Leone Prepares Ground For Stock Exchange

21 October 2004

Stock Exchange
"The building blocks for the construction of the capital market in a developing country like Sierra Leone require tremendous effort and time. "

The Commonwealth Secretariat is assisting the Government of Sierra Leone in creating a regulatory framework for the establishment of a stock exchange.

The seven-year project, which started in October 2002, is being implemented by the Secretariat's Special Advisory Services Division (SASD). SASD is collaborating with FIRST Initiative, a multi-donor programme funded by several government aid agencies as well as the World Bank and the International Monetary Fund. The Bank of Sierra Leone is leading the project on behalf of the Government.

Mohamed Fofana, Deputy Governor of the Bank of Sierra Leone, said: "The building blocks for the construction of the capital market in a developing country like Sierra Leone require tremendous effort and time.

"There is a need to develop systems, rules and regulations, accounting standards and codes of conduct to effectively guide the market, protect would-be investors and create an enabling environment for successful implementation and orderly development. This is one crucial area where assistance by the Commonwealth Secretariat has been beneficial to Sierra Leone."

In addition to the licensing of a stock exchange, the initiative will see the setting up of collective investment schemes such as unit trusts and mutual funds. SASD is currently preparing the draft securities legislation, and will also draw up detailed securities and collective investment schemes regulations. 

Makbul Rahim, Deputy Director at SASD, stated: "Many Commonwealth governments have taken a lead to put in place suitable regulatory and institutional arrangements for capital market development to diversify the options for private sector firms to raise capital.

"The success of these efforts depends on creating an appropriate regulatory framework suited to the specific needs of each country. The Secretariat seeks to help design suitable legislative and institutional arrangements."

The Secretariat is also conducting similar projects in Maldives and Uganda. 

 

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