Economic Boom In Sight In Liberia •Tweah Concurs with IMF, Other Experts •Acknowledges Challenges Under Remedy
When the revered International Monetary Fund (IMF) declared days ago that Liberia was on its way to improved economic climate that would witness an upward mobility of the country’s growth rate, cynics stamped their feet with force in doubt, yelling, “it could not be”, though they often celebrate when the same IMF paints a gloomy picture. So, there comes the man who oversees and manages the country’s fiscal policy—someone some pundits describe as “one of Liberia’s endangered economic czars”—accentuating marked progress being made to turn the prevailing dire situation into solid stability and glowing prosperity. In a simulcast interview in Monrovia, Samuel D. Tweah, acknowledged myriad debilitating factors underpinning the current economic crises but spoke confidently that better days are right in the corner, as The Analyst reports.
Addressing the high cost of living and other things that plague the country, Finance and Development Minister Samuel Tweah, Jr. admitted in a major interview yesterday that some disparities between the successes scored with the economy and the prevailing cost of living in the country. But he blamed it either on lapses on the part of some relevant institutions to control and enforce prices of goods and services, or deliberate attempts by unscrupulous business people to exploit situation.
However, the Finance Minister spoke of good signs to the effect that the economy would not only grow but would also impact the development and wellbeing of every Liberian, despite the prevailing economic challenges facing the nation in the wake of the COVID-19 Pandemic,
Mr. Tweah was speaking on a live radio talk show hosted on the SKY Communications Inc. by a popular talk show host, T. Max Jlateh. Minister Tweah acknowledged that the economy has over the years endured difficult times—something he attributed to structural problems that could not be solved in time.
The Finance Ministry boss said with measures being put in by the government, some of the problems being faced in the country are gradually being eliminated as seen from what he called “the upturn fortune of the economy.”
Speaking on why it has been difficult for the government to attract foreign direct investment similar to the magnitude experienced during the regime of former President Ellen Johnson Sirleaf, Minister Tweah said there are two different scenarios and circumstances that cannot be compared side by side, considering the economic reasons involved.
He explained during the Sirleaf regime, most of the investors who came to Liberia were attracted by the natural resources available at the time, such as iron ore, which is currently not in abundance to attract other investors who are interested to invest in the mining sector.
He divulged that the present government was exploring other areas of the economy to enlist the interest of investors such as agriculture, health, education, service industry, manufacturing etc.
“We had Accelor Mitta Steel coming in to take over the Nimba Iron ore area and another group of investors operating the Putu Mines in Grand Gedeh County. Of course, we have very limited spaces as such; so you don’t expect other investors to be coming in to invest in the mining sector of the economy, although the Finance and Economic Development Minister fell short of expounding on other economic areas involving the gold, diamond, forest and timber areas in which illicit mining are taking place across the country.
But he indicated that the present government, on its own, was attracting the interest of other investors in the areas of energy, agriculture, tourism, service industry, manufacturing etc. “We are hopeful that we will get the desired results being envisage”, the Minister said.
Tweah, who is considered one of the closest confidants of President Weah, decried the infrastructure deficit in the country which he said if not properly addressed will continue to haunt the progress of the country.
He was also quick to note that although much was spent in the past which he conservatively put around $1.6bn on major road construction, there was just little that could be seen in terms of economic returns. He mentioned the Monrovia to Nimba and Monrovia to Buchanan highways took good portion of the money, but the country was getting virtually nothing substantial to merit such a huge investment.
“Yes we have the Monrovia to Buchanan and the Monrovia to Nimba highways that were seen to stimulate the economy, but where are the goods and services, especially agricultural output coming through those routes to grow the economy. We would have made significant progress if we had made additional investment in agriculture from and along those directions for consumption and export,” he added.
On the vexing issue of liquidity problem in the country, the Minister agreed that it is a serious issue that needed to be addressed by the government. He further admitted that the liquidity problem undermines the development of the country.
He said the scarcity of money in commercial banks is not a policy issue, but has to do more with the politics at the Central Bank of Liberia at some time, which he said fueled the present scarcity. He disclosed that he was once told the Central Bank of Liberia and the commercial banks were placing premium on the acceptance of the United States Dollars compared to the Liberian bank notes, a situation that put more pressure on the US dollars and created confidence crisis in trading with the local currency.
He narrated that the Central Bank of Liberia which controls the monetary side of the economy should take urgent steps to alleviate the problem and focus on measures to monitor and sustain the actions that will be adopted to solve the problem once and for all.
“I support the minting of additional money. It must be the quantum of money that the economy can operate with. There should be money for the reserve and money for operation. This will erase the confidence issue our commercial banks are facing. The reserve component will take into account those who will want to make deposits in the banks and wish to also withdraw at any given time without being told that there is no money in the banks. If depositors make requests for withdrawals and receive their money all the time without any problem, even those who had doubts before will bring their hoarded money back into the banks and the banks will be capitalized all the time”, Honorable Tweah opined.
Minister Tweah furthered stated that the government took a major decision some time ago to save the commercial banks from imminent collapse when a $62 million facility through bonds was arranged to pay the debts owed the banks by the government.
Asked why he has been accused of not being a listener or if there is an economic team that advises the government from time to time, Minister Tweah answered in the affirmative. He said there is an Economic Technical Management Team that advises the government from time, but frowned on the allegation that he has not been taking pieces of advice or opinions from people, emphasizing that in fact one of the worst mistakes he ever made was to accept the advice from some of the people whose advices he, as Finance Minister, should convince the President to reject.
He made mention of the advice and recommendations from the International Monetary Fund (IMF). “We have been listening to people right from inception. In fact that cost us a lot during the early days of this administration. We were advised not to work with the IMF team any more like the past and we obliged. It was a hard decision personally for me as well coming from the background of having worked with the African Development Bank which is a strategic partner to the Bretton Woods Institute such as the IMF.
“But we could not get the usual budget support during the first quarter of the year and when we could not get the $20 million dollars which was an average amount paid out as monthly salaries for government workers, there was a serious problem. We have to advise ourselves and re-enroll in the IMF program and it has been rewarding indeed for the country”, he added.
Mr. Tweah who has also worked at the Ministry of Finance and Development Planning as a consultant said that the recent commendation from the IMF which was followed by the donation of $38 m was in recognition of the government’s fiscal discipline, fight against corruption and prudent management of state resources. He explained that the traditional development partner called on the government to put more money to capital projects, which will have medium and long run benefits to the economy and take steps to retire domestic debts as a way of increasing aggregate demand.
When asked how does he justify the improvement of the economy when prices of goods and services continue to soar beyond the reach of the common man, the Minister who was presenting his situation through power point said that there has been some disparities between the successes scored with the economy and the prevailing cost of living in the country, which he blamed on either some lapses in the relevant institutions to set to control and enforce prices of goods and services, or deliberate attempts by unscrupulous business people to exploit situation. He said he was happy that the Minister of Commerce and her team are coming up with the right measures to address the situation.
Touching on the often controversial issues with the alleged missing $16 billion and the unaccounted $25 million mop up exercise, Minister Tweah restated his position that the story about the missing money was not true. He said though it was a monetary issue that called for the involvement of the CBL to address the issue at the time, but as a patriotic individual outside the jurisdiction on the matter maintained that stand due to the availability of information to his disposal.
He said what actually happened was that the said money was in the economy but could not be traced through the banking system which was misconstrued as being missing. He also used the medium to exonerate himself from the much talked about unaccounted $25 million meant to mop up excess liquidity from the market. He said the whole exercise was handled by the Central Bank of Liberia which has the statutory function to do so though the Economic Management Team which he was a part made useful contribution on how the money should be used but did not get involved in the implementation of the project. According to him, the audit reports conducted in the two cases are available and challenged the media to follow up with the development.
Reacting to the decay in the running of some public corporations with special mention of the Liberia Electricity Corporation and the Liberia Water and Sewer Corporation, Tweah also expressed dismay over how these corporations have fallen in sad times and have constituted themselves as serious liabilities on the government instead of contributing to the success of the economy. For the LEC, he said the government has been providing more funding towards its operations despite what the Millennium Challenge Corporation (MCC) has been providing. He mention that in the last budget cycle, more funding was given to LEC to buy transformers, meters and poles to meet its target in supplying energy to the people.
“For the LEC, it is a sad story. The government has been funding its project despite the support from the Millennium Challenge Corporation. There is a management contract for LEC which expires at the end of this year. We have extended it and at the end of the period, we expect a team of qualified Liberians to take over the corporation to run it.
Tweah indicated that a competitive vetting process has been going on and it is expected at the end of the day that the best Liberian in the world will be selected to lead it. The government is also looking at other options like unbundling it into generation, transmission, distribution, etc.
The Finance and Economic Development Ministry boss spoke of a situation of serious power theft stuff hanging there and needs to be tackled. The power theft law needs to be applied and it is even incumbent upon the residents to make sure that perpetrators of the act are reported to the relevant authorities. Similar support is being given to the Liberia Water and Sewer Corporation, he noted. “We gave them $1 million dollar the last time to offset some of their expenses. Like LEC, we are also looking at options to make the entity viable as well,” he averred.
When the question on why the Weah-led government has not been able to probe or audit the past regime with all the blame games trending back and forth, the Minister was evasive not to respond according to the interviewer’s expectation. He only stated that the General Audit Commission (GAC) which has the statutory authority to audit government and its institutions have been doing so annually, and such reports are available covering periods as far back as in 2016 and then called upon the press to take up the matter.
Meanwhile, callers phoning in later to express their reactions to the interview bitterly disagreed with the Minister stating that contrary to what was said by him, the living condition of Liberians has worsen in recent years. They lambasted Mr. Tweah for what they termed as “cooking up stories “to please President Weah and his close allies who are laying siege to the common wealth of the country.
Some callers stated that as the result of the bad economic policies and decisions, majority of the population, even those who supported President Weah during his presidential bid, are at the receiving end of the harsh economic realities in the land. According to them, many parents cannot afford a decent meal for their families, talk less about sending their kids to school this year.