By: Anthony Q. Jiffan, Jr.
The Ministry of Commerce and Industry on Monday, July 1, 2019 issued a stringent regulatory warning, threatening huge fines against or revocation of licenses from businesses that will refuse to accept Liberian dollar as a legal tender during any of its transactions in the country. “There shall be imposition of fines on businesses in proving violation of this regulation,” the Ministry warned.
Commerce Minister Wilson Tarpeh disclosed that the fines shall be established and made known to the public, but added it could run from US$50,000 for the first offense or US$100,000 or more for the second offense or its equivalent in Liberian dollars and suspension or revocation of business licenses for any further violation by intransigent violators.
Addressing a news conference in Monrovia, Minister Tarpeh said this government has realized that majority of its people are paid in Liberian dollars, and yet some businesses are transacting only in United States dollars, a condition he said is creating serious commercial challenge for many Liberians.
The Commerce Minister said in order to deal with the situation, the government has issued administrative order mandating all businesses to carry out all commercial activities across the country in both Liberian and United States dollars as legal tenders, and further instructed that prices of every commodity must be labelled in Liberian dollars.
Commerce Minister Tarpeh noted that the regulation is an application of existing laws, stating that Part Four Section 19.1 of the Banking Law or Title Six which provides that “the monetary unit of Liberia shall be the Liberian dollar and the Liberian dollar shall be the currency or legal tender, prices for all transactions in Liberia shall be indicated in Liberia dollar and cent, the Liberian dollar shall be the currency for all accounting, financial reporting and official purpose” (source CBL act of 1999).
The Minister said the regulation announced will be released and will take effect as of the 1st of August, a time frame which the Commerce Minister he noted is sufficient to give businesses in the country ample time to adjust to the new regulation up to the end of July to ensure compliance.
“That means when you put the US dollar cost on a commodity, you must also put Liberian dollar cost on the commodity so as to give our people the option based on the currency available to them to buy,” Minister Tarpeh asserted.
He indicated that the government is taken such step because it is a normal practice around the World. “We are taking this step as a government, because this a normal practice around the world; you cannot operate in any country and reject its currency. The law requires that that is the case and we intend to re-enforce that, which of course is not a refusal of the United States dollars.”
Tarpeh intimated that the United States Dollar is an important medium of exchanged, it is legal tender in Liberia, but we insist that the Liberian dollar must be considered the currency of transaction. “This is where we are and we intend to keep this administrative regulation in force”.
According to Minister Tarpeh, the action is intended to promote the wide used of the Liberian dollar as a medium of exchange; and that the regulation is also intended to increase the value of the Liberian dollar and ensure its stability.
The Minister emphasized, “Again this action itself is inadequate, but it is going to run concurrently with other actions to stimulate economic growth.
He said other fiscal actions will be taken and will be announced by the Ministry of Finance and Development Planning and the Central Bank”.
He also assured that the regulation announced has been discussed with the relevant authorities to include the Ministry of Finance and the Central Bank of Liberia, and the collateral actions.