Special Feature: Liberia – The Reality Is That Government Is Struggling To Deliver Relief

Monrovia, Liberia – December 21, 2018: Liberians are playing the “waiting game” with the expectation of a grand national economic redemption by the United States and the international community.

Liberia PAPD

However, the stark reality is that the unfortunate elements of donor fatigue, the country’s non-strategic posture, lack of credible national and economic support systems and poor fiscal management make for an unattractive courting by the international community.

The attempt at not projecting a “doom and gloom” characterization of the West African country is a real struggle because the truth can be “inconvenient and harsh”.

The bold face truth is that the Government is really struggling to meet expectations.

Voting queue in Liberia
Voting queue in Liberia – File Photo

The general sentiment among most Liberians is to remain hopeful and resilient because the alternative is depressing. But the bare facts are that it will take more than hope and wishful thinking to wrest the country from the downward spiral and economic depravity that are impacting the country in these modern times.

The George Weah’s government which is clocking one year at the helm of governance is struggling to project its best face but the head-winds of lack of technical capacity and qualified personnel coupled with inexperience are a drag on national progress.

Pro-Poor Pillars For Prosperity and Development (PAPD)

 The Government has laid out an ambitious roadmap to guide its march to prosperity and development with a timeline of achievement by 2023.

In Pillar 1 , the Liberia Government states that it is, “To empower Liberians with the tools to gain control of their lives thru more equitable provision of opportunities in education, health, youth development, and social protection”. But the challenge is the successful application of proven systems, criteria, trained human capacity and measurable results to this goal. This will pre-suppose that existing national health infrastructures, educational programs and curriculum, and youth engagement and programs are reviewed for quick impact returns.

Pillar 2 projects the goal of “A stable macroeconomic environment enabling private sector-led economic growth, greater competitiveness, and diversification of the economy.”

To government’s credit, a macro loan scheme with oversight management by the Liberia Bank for Development and Investment (LBDI) was launched recently. But like most fiscal systems in Liberia, the management, eligibility criteria and promotion of awareness effort for small businesses who are expected to benefit are unclear. How is such a loan facility system structured to accommodate repayment? Will this loan facility be extended to small businesses in leeward counties? How much non- repayment tolerance is built into this scheme? What does success looks like from implementation of this macro finance scheme?

In April, 2018, a local paper the Daily Observer reported that the President of the Bankers Association In Liberia and President of the Liberia Bank for Development and Investment (LBDI) Mr. John B.S. Davies passionately spoke up against the enactment and enforcement of a law which makes the Liberian dollar the sole currency of the country and legal tender.

“…Mr. Davies believes that the use of the Liberian dollar as sole currency will cause local banking institutions to lose relationships with foreign correspondent banks to maintain their offshore accounts (accounts held in foreign banks), which transactions are traded with United States dollars. Local banks will not be able to pay depositors in the event of a run on the bank for huge United States deposit, owing to the depreciation that dollar deposited may be nationalized,” Mr. Davies said, according to the paper.

It is quite evident now that in spite of that grave warning then, the Government proceeded to advance Pillar 2 of its “Pro-Poor Agenda for Prosperity and Development; the result of which points to a total disconnect from Government’s public policy and stated goals. Today, the non-availability of local Liberia dollars in commercial banks is reaching crisis proportions.

Pillar 3 states its goal as, “A more peaceful, unified society that enables economic transformation and sustainable development. The crux of this pillar is ending fragility and the root causes of conflict. But the achievement of this goal is a non-starter because Government has ignored local and international calls for addressing past incidences of gross human rights abuses and impunity. The roadmap to address the ugly history demands that leaders rise above personal and partisan interests and boldly commit to implementing recommendations contained in the Final Report of the country’s  Truth and Reconciliation Commission (TRC) which completed its work since June 2012.

The installation and respect of a culture of rule of law remains elusive and contributes to the “fragile peace” posture of Liberia even after three democratic elections. There is a reason why the erosion in state institutions and governance and lack of trust in government is pervasive; the “Liberian way” of doing things dominates to the detriment of the people and Republic.

Pillar 4 offers that, “An inclusive and accountable public sector for shared prosperity and sustainable development”. The gulf between ordinary civil servants salaries and senior government officials is astonishingly incomprehensible. Part of the solution to set up accountability for public officials is the lawful system of “Asset Declaration”.

CDC Logo
CDC Logo

In spite of a pronouncement by the country’s Chief Executive President Weah to his Ministers and officials to comply with the law, they have deliberately ignored compliance and in some instances offered incomplete asset disclosures. Even President Weah’s Declaration is sealed. Accountability and transparency in such matters are the first seeds of building and gaining the trust and confidence of citizens. Worst is that the National Legislature sees itself as above the law, refuse to be audited and refuse to hold public officials accountable through credible hearings.

Additionally, investor confidence is very seriously impacted by the almost daily disclosure of scandals in government; namely, the questionable infusion by Government of $25 million USD in the local economy to shore up the local currency using un-named money changers, the bribery and extortion attempt by officials at the National Housing Authority (NHA), the construction of massive real estates by President Weah within one year of his ascension to the Presidency, the near catastrophic loss of millions of dollars from Government’s account to a fraudster, the confusing explanation from Government of the whereabouts of about $16 million Liberian dollars, etc.

The Liberian Government is totally convinced that its Pro-Poor Agenda for Prosperity and Development can be achieved through designated Development Corridors, Economic Zones and Roads through northern-central, south and south-eastern parts of the country which are comprised of heavy population centers.

The argument can be advanced by Government that it inherited a very difficult economy and infrastructures; However, the Congress For Democratic Change (CDC) led Government has been seeking state power since 2005 and should be held acutely accountable for providing solutions. Liberians voted for solutions and it is time to deliver for them or show them a credible and implementable plan that they can subscribe to and believe in because they  believe it will begin to transform their lives.

Political Map of Liberia
Political Map of Liberia

The “Economic Calvary” from the US and the international community is not coming anytime soon because the strategic importance of Liberia is not that attractive these days. International economic aid humanitarian assistance are now defined and designed around lessons learned from past experiences and adaptation to the  “complex Liberian development agenda and programs”; no longer just a blank check.

The Liberian Government must sincerely engage and utilize the experience and services of members of the opposition in order to appear united, broad-based and credible to its own citizens and the international community, if the country is to move beyond its notorious designation as a “problem state”.

The opposition is not an enemy but represents other Liberians who hold different political and economic philosophies.

By Emmanuel Abalo

West African Journal Magazine

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

Liberia: How Did A Huge Container of Liberian Dollars Vanish?

Central Bank of Liberia

A serious case of  “what happened to the money?”  has broken wide open in Liberia involving a huge quantity of local currency which has gone missing. Initial rumblings of the “disappearance” of a container of Liberian dollars started surfacing a two weeks ago in various quarters in Liberia.

But the Weah Administration has maintained a “hush-hush” about the disappearance of the currency until now.

On Monday, the Ministry of Justice (MOJ) issued a press statement in which it officially confirmed that an investigation of the matter was underway by multi-sector government agencies including the Liberia National Police, the National Security Agency (NSA) and the Financial Intelligence Unit (FIU) .

Statement of Liberia Justice Ministry

According to the country’s Ministry of Justice, the named agencies are “…mandated to investigate information surrounding the arrival of a container and bags of moneys into the country by and thru the Freeport of Monrovia and the Roberts International Airport (RIA). Initial findings indicate that the container and bags of moneys allegedly arrived between November, 2017, prior to the inauguration of the current Government, and August, 2018. Evidence available to the investigative Team has established that the current administration was not informed about the arrival of the containers and bags of moneys into the country, the Liberian Government statement said…”

Although the Government has remained mum on the exact amount which has gone missing, estimates put the figure at between $6 – 9 billion LD.

The controversy is raising eyebrows as to the issues covered between the Weah Transition Team and the outgoing Ellen Johnson Sirleaf government in January.

On December, 25, 2017, outgoing President Ellen Johnson Sirleaf, in anticipation of the inauguration of a new Administration in January, 2018, signed an Executive Order setting up the Joint Presidential Transition Team (JPTT). The 15 person team on the Government’s side comprised the Miinisters of States and Presidential Affairs (Chief of Staff), Justice, Foreign Affairs, Finance and Development Planning, Internal Affairs and National Defense. Other appointed were the Governor of the Central Bank of Liberia and Head of the Presidential Guard as well as others named to the team per the discretion of President Johnson-Sirleaf.

The incoming Congress for Democratic Change political party also formulated a 15 member team which was seconded to the JPTT.

On January 2, then President-Elect George M. Weah and then President Ellen Johnson Sirleaf co-chaired a meeting of the JPTT whose life-span ended on January 31, 2018 after the inauguration of the new government. A press statement issued following that meeting disclosed that “… the transitional team discussed the Executive Order 91 which created the team and the setting up of a secretariat and formulation of a plan of action.

President George M. Weah and Former President Ellen Johnson Sirleaf

The Government representatives briefed the incoming administration on matters regarding the economy and national security…”

According to Act establishing a key member of the Transition Team on the Government side was the Central Bank of Liberia, which, according to the Act establishing it has the functional independence, power and authority to:

(1) issue legal tender bank notes and coins;

(2) administer the currency laws and regulate the supply of money;

(3) provide credit to bank- financial institutions on a discretionary basis;

(4) act as fiscal agent for the Government;

(5) administer the New Financial Institutions Act of 1999 and regulate banking


(6) regulate bank and non-bank financial institutions, as well as non-bank financial

services institutions;

(7) hold and manage the foreign exchange reserves of Liberia, including gold;

(8) advise the Government on financial and economic matters;

(9) conduct foreign exchange operations;

(10) play an active role in collaboration with bank-financial institutions in the

creation and maintenance of efficient and safe mechanisms for payments,

clearing and settlements to meet the needs of the financial markets, commerce,

government agencies and the general public. The Central Bank shall execute

this responsibility through permanent consultations with the bank-financial

institutions and through implementation of the proper regulations and standards,

as needed.

It is unclear if the the current Government was actually briefed at the Transition Meetings on the specific issue of the pending delivery of a large amount of currency through the major ports and if not, whether some lawmakers who served in the last Legislature and were part of the Weah Transition Team knew of the pending arrival of the huge quantity of bank notes into the country.

Liberia And US Dollars

The Liberian economy has been decimated from the effects of back-to-back wars between 1990 – 2003 and the devastating Ebola pandemic in 2014.

Over the last few years, the depreciating revenue streams from the extractive industries, local tax base coupled with fiscal challenges have placed additional pressure on the Liberia government’s ability to rein in inflation. The free fall of the LD has led to decrease earning power of the ordinary Liberians and high commodity prices in the face of a scarcity of the preferred and coveted US dollars on the market. The new administration of the Central Bank has engaged local money changers in discussion to develop measures to control the unregulated market.

Speaker Bhofal Chambers

The Speaker of the House of Representatives Mr. Bhofal Chambers disclosed in July that the administration of President Ellen Johnson Sirleaf was warned against the printing of huge quantities of bank notes to avoid flooding the Liberian market.

In 2016, the Legislature agreed to a bill which would facilitate the printing of more Liberian bank notes as a way to ease the economic pressure at the time. A law passed in 2017 by the Legislature made the Liberian dollar the sole currency for monetary transactions but the US dollar remained dominant in spite of these quick fix measures.

In a separate development, the Liberia National Police, in July, blamed increased counterfeit bank notes on a porous border. While Liberians are now demanding answers on the matter, the country’s Justice Ministry says investigation into the disappearance of the large sum of LD currency is active.

By Emmanuel Abalo

West African Journal Magazine