Liberia: “Missing Billions” of Liberian Dollars Not In Central Bank System

Justice Minister Frank Musa Dean

Following the disclosure of the missing $16 billion Liberian dollars in Liberia, the West African Journal’s review of the Financial and Economic Bulletins of Liberia’s Central Bank (CBL) which was issued for the periods January-March and April – June 2018 shows relative economic “growth” based on published financial data but still no indication of the missing amount making it into the bank’s financial reports.

January – March 2018

The Liberian dollar in circulation at end-March, 2018 grew by 4.9 percent to L$16,692.6 million, from L$15,919.7 million, the level recorded at end-December, 2017. No record of the deposit of the missing $16 billion LD.

In the first quarter of 2018, the Central Bank, in its economic report said, “…currency in banks only accounted for 6.0 percent of total currency in circulation, which implies that about 94 percent of currency in circulation is outside the banks..”.

April – June, 2018

For the period of April – June , 2018, growth reported was 11.1 percent but no record of the inflow of the missing $16 billion LD ($4 million USD) which resulted in a budget shortfall as reported by the country’s cental banking authority.

In its report on the circulation of Liberian dollar for the quarter under review, the Central Bank notes in section 3.6 Liberian Dollar in Circulation that, “The Liberian dollar in circulation at end-June 2018 expanded by 3.3 percent to L$17,236.1 million, from L$16,692.6 million recorded at end-March 2018. The growth in currency in circulation was due to a 68.7 percent rise in currency in banks which offset the 0.9 percent decline in currency outside banks both driven by the demand for cash to facilitate economic transactions. When matched against the same period a year ago, the Liberian dollar in circulation expanded by 38.8 percent on account of a 27.3 percent and 39.0 percent increases in both currency in banks and currency outside banks respectively…”

“3.7 Money Supply (M1)

Narrow money supply (M1) at end-June 2018 grew by 11.1 percent to L$63,449.0 million compared to L$57,109.4 million recorded for the preceding quarter. The rise in M1 was prompted by a 15.7 percent growth in demand deposit which outweighed the 0.9 percent

decline in currency outside the banking system. Compared with the corresponding period a year ago, narrow money supply grew by 37.2 percent, triggered by 39.0 percent and 36.6 percent expansions in both currency outside the banking system and demand deposits, respectively…”

Central Bank of Liberia Seal

This means that there was no upward mobility of infusion of the missing billions in Liberian dollars which began arriving in the country since November of 2017, in the prior Ellen Johnson-Sirleaf Administration and into the Weah Administration This is evident in a statement from the CBL Bulletin which states that, “…The financial account of the country’s balance of payments resulted in liabilities of US$31.5 million in the quarter under review as compared to net asset position of US$66.9 million in the preceding quarter. The decline in net financial account was driven mainly by a sharp fall in transactions in other investment (net) resulting from a dip mainly in currency and deposits…”

The CBL disclosed that “… the banking system recorded total net income after tax of L$911.1 million at end-June 2018, increasing by 79.2 percent and 4.8 percent when compared with the values recorded in the first quarter of 2018 and the second quarter of 2017, respectively…” This disclosure in no way indicates that the net income stated was related to any infusion of LD into the banking system for the quarter. This was income recorded after taxes. So, even with an increase in, the CBL analysis showed that, “The system recorded total assets of L$132.05 billion at end-June 2018, representing an increase of 16.2 percent compared with the L$113.5 billion recorded at end-March 2018 and also a significant increase of 42.9 percent compared with the corresponding quarter in the previous year. The increase in assets can be attributed to increases in both capital and deposits in the banking system..”, the CBL’s Economic Bulletin states.

Liberian $100 Bank Note

The central question now is why were the amounts of the initial minted bank notes received in the West African country for a total of $16 billion Liberian dollars not reflected in the CBL’s financial system for the first 2 quarters of 2018 ending in June?

The government’s investigation of several individuals associated with “missing money saga” is focused mainly on the whereabouts of container of bank notes which began arriving between November, 2017 and as late as September 18, 2018.

Meantime, the Government of Liberia is requesting international assistance from the US Federal Bureau of Investigation(FBI), the US Treasury Department and the International Monetary in its ongoing investigation.

The Government is also requesting the Liberia Muslim Council, the Liberia Council of Churches, the National Bar Association, Federation of Liberian Youths and Civil Society Organizations to be a part of the Investigation, a Press Statement from the country’s Ministry of Justice said on Wednesday in the capital Monrovia.

By Emmanuel Abalo

West African Journal