ENHANCING DIGITAL FINANCIAL SYSTEMS AND FINANCIAL INTEGRITY: ASSESSING THE COORDINATING ROLE OF THE BANK OF SIERRA LEONE

Abstract

Sierra Leone’s financial sector is undergoing its most consequential transformation since independence. Mobile money has overtaken commercial banking as the principal channel of financial access; the National Payment Switch (Salone Pement Swich, SaPS) launched in May 2023 now routes domestic retail transactions, and the National Payment Systems Act 2022 has given the Bank of Sierra Leone (BSL) explicit statutory authority over the payment ecosystem. Digitalisation at this pace, in a cash-dominated economy with thin supervisory capacity, generates financial integrity risks that arrive faster than the institutions built to contain them. The study examines how the BSL coordinates Sierra Leone’s digital financial ecosystem while simultaneously pursuing financial integrity, stability, consumer protection, inclusion, cybersecurity and compliance with anti-money laundering and counter-terrorism financing (AML/CFT) standards. It assesses institutional strengths, regulatory gaps and implementation constraints, and proposes an original governance framework. The study adopts an interpretivist qualitative design based on documentary, policy and comparative analysis. Sources comprise Sierra Leonean statutes, BSL directives and guidelines, the 2020 GIABA mutual evaluation and its follow-up reports, IMF, World Bank, BIS, FATF, AFI, GSMA and UNCDF publications, and peer-reviewed literature. Thematic content analysis is applied against nine comparator jurisdictions: Kenya, Ghana, Rwanda, Nigeria, South Africa, Singapore, Estonia, India and the United Kingdom. The BSL has built a credible enabling architecture, including an early regulatory sandbox, tiered know-your-customer rules and mandatory switch participation, but coordination remains fragmented across the Financial Intelligence Unit, the National Telecommunications Commission, cybersecurity bodies and line ministries. Supervisory technology, data protection law, enforcement capacity and inter-agency data sharing lag behind market growth, leaving integrity risks concentrated in agent networks, fraud and weakly monitored digital channels. The paper specifies sequenced reforms for the BSL, government, industry and development partners, each costed against institutional capacity and political incentives. The paper offers the first integrated scholarly assessment of the BSL’s coordinating role in digital finance and develops the Integrated Digital Financial Governance and Integrity Coordination Framework (IDFGICF). Sierra Leone can convert late-mover status into an advantage only if regulatory coordination, supervisory technology and integrity safeguards are institutionalised before transaction volumes outgrow them. JEL: G00, H00, M40, M41, M48