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Balance of Payments
Intro  Current Account  Invisible Items  Current Transfers |  C and F accounts 

The Balance of Payments accounts have been compiled to show the value of all transactions that take place between residents of Sierra Leone and non-residents.

The accounts have been compiled and presented to correspond as closely as possible with the recommendations contained in the Fourth edition as well as part of the recommendations of the Fifth edition of the manual on Balance of Payments statistics as prepared by the International Monetary Fund. There are provisions in the manual for two tables for which Sierra Leone has no external transactions: Table 2 on Non-Monetary Gold, and Table 13 on External Assets and Liabilities of Local Authorities.

For Balance of Payments purposes, residents of Sierra Leone comprise individuals living in Sierra Leone for the period exceeding one year. These include Central Government and Local Authorities; Agencies of the Sierra Leone Government operating abroad i.e. Embassies and all business enterprises and non-profit making organisations and institutions located in Sierra Leone but not their Head Offices and Branches abroad. Branches are treated as residents of the country in which they are located and subsidiaries where they are registered.

Agents, in so far as they act on behalf of an overseas principals are, in general, treated as residents of the country in which the principal is registered. In borderline cases such factors as length of stay, the concentration of earning activities etc., determine the residential classification.

Transactions are as far as possible, recorded when the ownership of goods or assets changes between residents and non-residents and also when services are rendered.

Recorded transactions are divided into three main groups:

  • Current Account transactions which include imports and exports of goods and services, remittances of investment income and government and private transfer payments and receipts
  • Capital and Financial Account transactions which include inter-Governmental loans, other Government capital transactions and private capital movement both long and short term
  • Monetary movements, which include changes in the external monetary reserves, transactions with the International Monetary Fund, changes in external liabilities and claims on other currencies.

That is to say, in a way analogous to a double entry bookkeeping systems the recording of a credit or debit inevitably means a corresponding change in the balance between assets and liabilities. Thus when a Sierra Leone firm imports goods from another country, the value is shown as a debit under visible trade. If the goods are paid for in an overseas currency, then this debit is reflected in a reduction in the holdings of currencies by the Sierra Leone banks, i.e. in monetary movements.

In a double entry book-keeping system there is of necessity always an exact balance between debits and credits since the same piece of information is used for both entries. In the balance of payments table although the principle exists, it is often necessary to use entries that are derived from separate sources and these sometimes in themselves are neither complete nor precisely accurate. In order to bring the total of all entries to zero, an additional entry called Unrecorded Items is included to offset the effect of all errors and omissions.

Intro |  Current Account |  Invisible Items |  Current Transfers |  C and F accounts 

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