As the Liberian economy hits rock bottom, against the backdrop of the rising cost of living and the conspicuous shortage of the local Liberian dollar currency from the market, commercial banks have already started short changing customers from making regular withdrawals, a situation that caused the United States Embassy near Monrovia to issue a travel alert during the holidays, warning its citizens to be wary of acute cash shortage at banks and ATMs in case they need to carry out monetary transactions. The situation which has become a hot topical discussion point at various speakeasies around the Liberian capital has also drawn the attention of President George M. Weah’s Minister of State for Presidential Affairs, Mr. Nathaniel Falo McGill, who says people should not blame the Liberian leader for the shortage of the local currency and the flooding of mutilated banknotes on the market, rather the blame rests squarely at the doorsteps of the Liberian legislature for failing to authorize the printing of additional banknotes.
In a video posted on Facebook, Minister McGill said the issue is purely a legislative responsibility, and people should stop throwing blame at President Weah.
“It is the legislature, which is their sole responsibility to change the money. If they don’t do it, the Liberian people will have problems with the Liberian dollar. They have to agree to change this money. The money is rotten. The Liberian people have to accept that. It has nothing to do with the president. It is pure legislative responsibility. The lawmakers have to decide, we got to change the money,” Minister McGill stated.
It can be recalled that the United States Embassy near Monrovia last week issued a travel alert warning its citizens about the dire financial situation in Liberia.
“As a consequence, it is difficult to obtain adequate cash supplies from ATMs and banks. There are no ATM facilities for public use at the U.S. Embassy,” the US Embassy near Monrovia said.
The US Embassy alert came in the wake of a press statement from the Central Bank of Liberia (CBL) acknowledging the shortage of Liberian dollar banknotes on the market.
“The Central Bank of Liberia (CBL) is fully aware of the current liquidity pressure in the banking system, particularly the limited supply of Liberian dollars. It is, however, worth noting that the pressure on the Liberian dollar this year is unusual and can be attributed to the increased demand for Liberian dollars overtime, which has been exacerbated by COVID-19,” the CBL said last Tuesday.
“In its effort to preempt this seasonal pressure, the CBL in 2019 forecast L$7.5 billion based on its analysis but was authorized to print only L$4.0 billion. This amount which was brought into the country in July this year, was inadequate to replace the current amount of mutilated banknotes and at the same meet the liquidity demand in the banking system. In spite of this constraint, the CBL has been strategically infusing the L$4.0 billion through the commercial banks with substantial amounts already infused into circulation.”
The central clearing house further assured the public that it is doing everything necessary to ensure the availability of both US and Liberian dollar liquidity for the festive season, noting that it has put into place a Liquidity Monitoring Framework, including the establishment of an Internal Liquidity Management Team to respond to the prevailing liquidity challenge.
But even as the CBL tries to calm down the looming fear of financial insecurity occasioned by the shortage of the local Liberian dollar currency, coupled with the flooding of the market with mutilated local banknotes, the citizens continue to experience the pinch of the dual economic anomaly.
“This thing is getting out of hand. Can you imagine during the season, I couldn’t withdraw more than LD5, 000 from my account and when I got the little money it was all rotten,” lamented a civil servant who spoke with this paper on condition of anonymity.
“We are really catching hell. When the customers come to buy, they come with rotten money. If we refuse the money, we won’t sell the next day because we have to buy our fish from the cold storage. And when we take the money from our customers, our suppliers can separate the rotten money from the good ones. We are really suffering. President Weah should feel sorry for us,” says Jestina Sumo of Duala Market.
But Minister Nathaniel McGill completely disagrees that President Weah has the solution that will change current financial predicament.
“This is purely a legislative responsibility. If we don’t have money in the country, they are the lawmakers, they have the power to authorize. If they don’t authorize, we will never have money in the country. Then the rotten money will remain circulation. Sooner or later, we will not have Liberian dollars to use again,” McGill stated.