It was predicted that the Liberia economy, which took a nosedive several years ago even before the George Manneh Weah administration took state power, would get worse before it gets better. Truly, the first part of the prediction has happened—the economy has plummeted deeply and severely and everyone feels the pinch of it. The second part of the prediction is just picking up its manifestations—austerity measures are evolving and the government in charge has just announced it is now in full control of the situation and holding the best prescriptions on hand to salvage the economy and put smiles on the lips of Liberians once again. To this endeavor, the country’s central economic management team that includes the Ministry of Finance, the Central Bank of Liberia and others, held an elaborate press conference in Monrovia yesterday, April 25, 2019, not only to expound on the roots causes of the dire economic conditions prevailing in the country and where the country stands at present, but also to announce methodically what is being done to cure the lingering fiscal nemeses plaguing national growth and comfort. The Analyst’s John Dennis Weah, Jr. & Anthony Q. Jaffin, Jr. were present at the conference and now reports.
When President George Manneh Weah took state power nearly a year and half ago, he revealed that the economy he inherited was in free fall, perhaps indicating that the macroeconomic safety valves holding the economy in place were in disarray and the impact was vexing.
The President and his government have been fighting tooth and nail to reverse the bad state of the economy, but the factors underpinning and defining the downward trends are numerous and vicious.
In the last two weeks or so, the country’s senior economic managers were in Washington D.C. to faceoff with international lending institutions and monetary watchdog organizations to share notes on how to pull Liberia and Liberians out of the quagmire that has led to inflation, high cost of living and political tension in the country.
To report on all these redemptive maneuvers, key members of the Technical Economic Management Team of Government headed by Finance and Development Planning Minister Samuel D. Tweah, Jr. convened a conference at the Minister of Information, Cultural Affairs and Tourism.
Other members of the team who made presentation at the press conference included Nathaniel Patray, Executive Governor of the Central Bank of Liberia, the Commissioner-General of the Liberia Revenue Authority, Thomas Doe-Nah, the Managing Director of the National Port Authority, and John B. S Davies, head of the Liberian Bank for Development and Investment who is also the President of the Liberian Bankers Association and others.
At the onset of the Thursday, April 25, 2019 press conference, Finance Minister Samuel D. Tweah recounted the importance of the just-ended Spring Meetings hosted in Washington DC by the World Bank and the International Monetary Fund (IMF). He said the meetings evolved commencing engagement with the IMF, hold discussions with World Bank on more financials and discussions with the MCC.
Min. Tweah said the discussions was about the content and framework of program, program stimulus element, pressures from coming principal repayments, wage harmonization and broader governance reforms and arrears clearance.
He also named the strong commitment on Road Fund, IDA 18 closure and spending USD 106, IDA 19 and more resources for roads including the MCC’s reiteration of its commitment to Liberia through the compact and understanding to place compact in the context of existing challenges, Government’s Commitment to meet Conditions Precedents and to compact closure, Power theft, criminalizing power theft and campaign on power theft and more funding for MCC Road Fund.
The Minister of Finance also provided updates of the national budget and said there are structural issues responsible for the submission of the budget but that this year’s draft budget will be delayed for a month before submission to the National Legislature.
He stressed that wage harmonization exercise cannot extend beyond the April 31 timeline.
He named the aim of the exercise as bringing public expenditure close to fiscal FY 2019 outturns, rationalization protective of critical social sectors and infrastructure development, revenue mobilization key, chart on revenue performance over last several years, chart shows domestic revenue almost linear with minor variations: Domestic Resource Mobilization (DRM) to drastically change this.
The Executive Order and other Domestic Resource Mobilization measures are intended to move domestic revenue tax and non-tax revenue to next level and the planned meeting by the Cabinet on Wednesday to consider budget and other issues.
The Finance boss indicated the passing of the ‘Executive Order 96’ on April 10, 2019 by the Liberia Chief Executive George Manneh Weah and that this is embedded with components intended to better the investment climate.
He provided updates on activities of the business climate working group intended for proffer and implement reforms that will reach a ‘business friendly level’ to attract more investors.
Speaking further on the updates of investment and business climates, Minister Tweah said that the National Investment Commission (NIC) is to discuss different investments that have been recently signed. Investment being pursued and discussion on the Special Economic Zone roll out.
Tweah also intimated that the Business Climate Report is readied and action matrix finalized on all reforms needed in business climate, with SIDA support for business climate through IFC and strong emphasis on resolving justice sector and judicial issues impeding the business climate.
He included update on progress made in the economy and infrastructure as the issuance of Construction Permits.
“The Ministry of Public Works (MPW) has reduced the steps from 25 to only 7 and this is published on their websites. The Liberia Business Registry (LBR) has reduced the number of days from 18 to 5 in obtaining a Business Certificate. The Liberia Land Authority (LAA) has set up their website and soon information relating to land rights and ownership will be posted and the Central Bank of Liberia (CBL) is strengthening its collateral registry systems.
Min. Tweah spoke of other fiscal instruments such as T-bonds, contractionary fiscal policy through fiscal tightening and the effective management of LD liquidity.
According to him, the government is working on strong fiscal and monetary coordination for the government and banking sector dialogue and framework on Liberian dollar banking; and leading innovative financial instruments on how banks can increase their efforts to attract Liberian dollar into commercial banks.