By zainab.joaque@awokonewspapersl.com
Freetown, SIERRA LEONE – Commercial banks in Sierra Leone significantly ramped up their investments in government securities in 2023, with total holdings rising by 46.1%—an increase of NLe4.2 billion—from NLe9.1 billion in 2022 to NLe13.3 billion.
This surge reflects a strategic pivot by financial institutions toward safer, low-risk instruments, despite ongoing debates about the implications for private sector lending and economic diversification.
The five largest contributors to the government securities market were Sierra Leone Commercial Bank (SLCB), United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Rokel Commercial Bank (RCB), and ECOBANK. These top-tier institutions accounted for a commanding 72.9% of the total investment portfolio, underscoring their continued dominance in the banking sector.
However, the most aggressive expansions came from mid-tier players. Union Trust Bank (UTB) more than doubled its holdings, posting a remarkable 121.8% increase, while Skye Bank followed closely with a 113% rise. Among the top investors, SLCB expanded its portfolio by 75.1%, UBA by 60.35%, and GTB by 55.53%, signaling robust confidence in the returns offered by sovereign instruments.
Conversely, a more cautious approach was observed from Access Bank, Standard Chartered Bank (SCB), and Bloom Bank, whose increases were modest at 8.15%, 5.21%, and 1.62%, respectively. The planned merger between Access and Standard Chartered may have influenced their conservative stance, as the institutions navigate integration and capital restructuring.
While some critics continue to label the trend as “lazy banking”—arguing that it diverts resources away from the private sector—bank executives defend the strategy. With high yields and minimal risk, government securities remain an attractive investment, especially given the government’s strong demand for funds to finance fiscal operations.
For many bankers, the equation is simple: in a volatile economic environment, maximizing returns with minimal exposure is a prudent business decision. ZIJ/9/6/2025
