Transforming Sierra Leone’s Economic Future: The Promise of the National Payment Switch and Financial Inclusion
By: Bailor Amid Saheed Kamara
Introduction: Laying the Foundation for a Digital Economy
Sierra Leone is on the brink of a profound economic transformation. With the launch of the National Payment Switch (NPS) in May 2023 by President Julius Maada Bio and strong backing from the World Bank, the country has initiated a systemic shift toward an integrated, inclusive, and efficient digital financial ecosystem. This initiative is not just a technical upgrade—it is a critical pillar for financial inclusion, economic resilience, and sustainable development. At its core lies the vision of a financially empowered population, where every Sierra Leonean, regardless of income, gender, or location, can participate in the formal financial system.
The National Payment Switch: A Game-Changer in Financial Infrastructure
The $12 million World Bank–funded National Payment Switch interconnects six commercial banks, microfinance institutions, mobile money operators, and fintech firms. This interoperable infrastructure now allows people to perform transactions across different platforms using a single card or account, whether through ATMs, POS terminals, mobile wallets, or online platforms.
Before this switch, consumers had to hold multiple cards from different banks—a practice both costly and discouraging to the growth of digital payments. Now, this barrier is dismantled. As Walton Gilpin, Managing Director of Rokel Commercial Bank, rightly put it, “this innovation benefits the 90 percent of society that would otherwise have transacted outside the banking system.”
The switch is also a catalyst for interbank transactions, which will deepen account penetration and formal economic activities, paving the way for a robust and inclusive financial sector.
Digital Payments and Project FASTT: Driving Efficiency and Equity
The rollout of fast digital payments through Project FASTT (Frictionless, Affordable, Safe, Timely Transactions), a global World Bank initiative, is the next step in Sierra Leone’s journey. Project FASTT supports digital payment development in over 100 jurisdictions and is already reshaping how countries handle financial transactions.
In Sierra Leone, the second phase of the NPS will enable 24/7 real-time payments, supporting timely access to pensions, social welfare, salaries, and remittances—especially in rural areas. This removes the need for expensive, time-consuming travel to urban centers for basic financial services. According to the Global Findex Database 2021, digitizing agricultural payments alone could increase adult account ownership in Sierra Leone by nearly 25%—a transformative shift in rural financial empowerment.
Statistical Benefits of Financial Inclusion
The World Bank’s data underscores how financial inclusion can reshape economies:
- 1.1 billion people gained access to financial accounts between 2011 and 2021.
- Yet 1.4 billion adults—mostly in low-income, climate-vulnerable countries—remain unbanked.
- In developing economies, account ownership rose from 42% in 2011 to 71% in 2021, closing part of the digital divide.
- However, the savings gap between advanced (58%) and emerging economies (25%) remains a major concern.
- Women remain underserved, though the gender gap in account ownership in developing countries narrowed from 9 to 6 percentage points between 2017 and 2021.
Sierra Leone now has the opportunity to leapfrog many of these challenges by aligning NPS implementation with inclusive policies and targeted support for vulnerable groups.
Financial Inclusion as a Catalyst for Economic Growth
Access to digital financial services fuels:
- Entrepreneurship: Micro, small, and medium enterprises (MSMEs), which contribute to over 50% of employment in emerging economies, face a $5.7 trillion financing gap—19% of GDP. The Switch and digital finance solutions can improve credit access and support scale-up of small businesses.
- Gender Equality: Financial inclusion empowers women to manage finances, start businesses, and gain decision-making power. The World Bank Gender Strategy (2024–2030) aims to reach 80 million more women and women-led businesses with financial services.
- Climate Resilience: Over 80% of the unbanked live in climate-risk regions. Financial inclusion allows access to insurance and savings, enabling investment in climate-smart agriculture, energy efficiency, and resilience planning.
- Poverty Reduction: Affordable financial services—savings, payments, credit, and insurance—help manage risks and invest in income-generating activities. Financial inclusion supports 7 out of the 17 Sustainable Development Goals, including reducing inequality, ending poverty, and promoting economic growth.
The Path to Sustainability: Policy and Consumer Protection
While infrastructure is critical, sustainability depends on regulation, education, and consumer trust. The World Bank’s 2022 Global Financial Inclusion and Consumer Protection Survey emphasizes the importance of:
- A robust regulatory framework for market conduct.
- Financial consumer protection mechanisms.
- Literacy and awareness campaigns to build trust and adoption.
Sierra Leone must adopt financial consumer protection policies to safeguard users from digital fraud, excessive fees, and data misuse. Market conduct supervision must evolve alongside innovation to ensure equitable access and fair competition.
Global Best Practices and Lessons for Sierra Leone
Countries like India, Kenya, and Thailand, where over 80% of the population hold accounts, demonstrate that digital infrastructure, when matched with enabling policies (e.g., India’s Aadhaar and Jan Dhan Yojana), can rapidly increase account ownership and usage. For instance:
- India opened 480 million JDY accounts since 2014.
- Kenya’s M-Pesa revolutionized mobile money, now used by over 90% of Kenyan adults.
Sierra Leone can draw lessons from these successes and tailor its approach to local context through:
- National financial inclusion strategies.
- Public-private partnerships.
- Rural agent banking networks.
- Integration with social protection programs.
Conclusion: A Legacy for Generations
The full implementation of the National Payment Switch, alongside Project FASTT and World Bank–aligned financial inclusion policies, is a once-in-a-generation opportunity for Sierra Leone. It promises not just better transactions, but a modern, inclusive, and resilient economy—one where every citizen can participate in and benefit from financial services.
For future generations, this transformation means more equitable access to opportunity, safer financial tools, stronger businesses, and a country more capable of weathering economic and environmental shocks. The foundation being laid today, if nurtured with inclusive policy, robust regulation, and digital innovation, will ensure that the benefits of financial inclusion are not fleeting—but intergenerational.
As President Bio said during the launch, this is “a major step forward in this era of the fourth industrial revolution.” It is also a step forward into a future where no Sierra Leonean is left behind in the country’s financial progress.
Key Recommendations for Sustainability:
- Scale rural digital access through agent banking and mobile money expansion.
- Develop robust consumer protection laws to address fraud, privacy, and market conduct.
- Promote gender-targeted financial products to narrow persistent gaps.
- Incentivize banks and fintechs to serve low-income and underserved markets.
- Integrate financial inclusion with education, health, and climate programs.
- Continuously monitor usage, not just access, to ensure active participation in the financial system.
Sources:
- World Bank Global Findex Database 2021
- World Bank Project FASTT
- National Financial Inclusion Strategies (World Bank)
- President Bio’s National Payment Switch Launch Speech
- Sierra Leone Association of Commercial Banks