FY 2023 Budget May Not Be Realistic -Pundits Say; Despite Positive Forecast by IMF, AfDB

MONROVIA – As the populace continue to build their hopes around the increment in the proposed national budget for the upward growth and development of the country, coupled with the recent positive outlook forecasts coming from Liberia’s international development partners, there are already dissenting that the 2023 fiscal budget may not be realistic in addressing key issues that impact on the citizens and the overall development of the country.

After long delays in presenting the national budget, President George Manneh Weah recently presented the national budget of USD777.9 million comprising of domestic and external resources; where the domestic resource mobilization is expected to bring in USD667.9m or 85.5% of the total national budget, while the external sources will pump in USD110m or 14.1%. There is a “budget surplus” of USD4.5m brought forward from last year.

Although the national legislature did not debate the national budget before it adjourned for the festive season, the budget is however expected to be of top priority for consideration when the Legislature resumes on January 9, 2023.

While the country awaits the passage of the national budget, some of Liberia’s development partners have since projected a clean slate performance. One of them, the African Development Bank, has released its report which is an improvement of year 2022, maintaining a positive outlook and mentioning the risk factor attributed to the Russia – Ukraine war which it says will constitute the downside of the economy.

“The outlook is positive, with risks titled to the downside due to the Russia–Ukraine conflict. Growth is projected at 3.5% in 2022 and 4.3% in 2023, driven by expansion in mining, services, manufacturing, and agriculture. Inflation is projected to surge to 9.8% in 2022 and 8.1% in 2023, driven by food and energy inflation,” the report said.

However, The Analyst, while dissecting the report and other dissenting views expressed by some financial experts interviewed recently, is of the view that the African Development Bank grossly downplayed other factors, especially the risk factors, while giving a pass mark on the 2023 economic outlook. The Analyst’s initial results of its investigation have it that the report did not consider the fact that the proposed 2023 budget experienced a drop of USD 28.6m from the 2022 budget figure of USD806.5m, which was trumpeted by the government as the highest since the country’s independence in 1847, after a projection was made that the figure will rise to USD 1 bn in 2023.

What the drop implies according to this paper’s interpretation of the economic variables is that certain factors that led to the fall in expectation are still much around, key among them are the ongoing protracted Russia-Ukraine war with its attendant rise in prices of basic commodities, as well as the decline in the export earnings of the country.

A look at the fact sheet released by the Ministry of Finance and Development Planning showcasing proposed expenditure in the budget further reinforced the assertion by experts and findings by investigation of The Analyst that the 2023 fiscal budget may not be realistic given the myriad problems engulfing the country that impede the growth and development of the country as very little was apportioned for key sectors that could trigger improvement in the economy.

There was a drop in the budget of the agriculture sector from USD6,813,644.00 to USD5,422,937, representing the lowest at a paltry 1%, meaning that the government did not give priority to food security even after it had adjusted the price of rice upwards in the wake of the removal of the subsidy. Experts believe that in the wake of the drop in the purchasing power of the citizens, the rate of hunger is going to be aggravated.

“We are definitely going to experience a tough time in 2023 because the government did not solve the acute food insecurity in the country. Instead of pumping in more money to the agriculture sector as a starter to achieving self-sufficiency in food production, they have cut down the budget further at the time they have removed subsidy on rice importation which has driven the price of this important commodity upward and may continue to rise as we are importing and not producing”, Settro Pajibo, a classroom teacher in Monrovia told The Analyst.

In similar vein, there was a cut in the budget of the health sector from USD 76,681,756.00 to USD75,521,692.00 which constitutes a mere 9.7% in the midst of the deplorable sector, hampered by dilapidated facilities, lack of trained manpower, poor conditions of service, among others.

A Liberian Health Economist who did not want his name printed in the media while berating the government said “health is wealth, and individuals suffering from illness may be weak, unable to work or study and generally unable to provide for children and other dependents. At a more aggregated level, however, it seems likely that a high disease burden may have an adverse impact on a country’s productivity, growth and, ultimately, economic development”.

He challenged the assertion that the country is on the right trajectory of economic development when facts available show the government is not looking at improving the health sector of the country. “It is a joke that a sick country can ever be developed”, he said.

Further expressing doubt in the country reaching the threshold for development, experts are of the view that the cut in the budget line for security and rule of law from USD102,009,767.00 to USD96,869, 527.00 will definitely have adverse effect on the need to provide adequate security and protection for the people and properties in the country.

On so many occasions, development partners have raised the issue of security and protection of lives and properties as key determinants to investment and the promotion of doing business in the country. The drop in budgetary allocation to this sector will surely be a disincentive to attracting investment in the country which on the other hand will affect job and wealth creation in the country.

“No investor is willing to go to a country where there is no security for the lives and properties of the citizens and residents. This is the minimum requirement for every government. With the security challenges in the country already, further reducing the budget will not augur well with whatever intention the government has to encourage investors to come.

“What attracted investors in the country after the election of former President Ellen Johnson Sirleaf was the presence of UNMIL here. It allayed fear in the people and they were comfortable to do business here. I just hope that the national legislature will see reasons to adjust the budget upward in favor of the security sector”, Barney Tweh II, a former UNMIL employee said.

Mr. Francis Weemi-Williams Sr, a management consultant, was concerned about what he referred to the “deception” of the government towards education, stating that the government should go beyond “paying WASSCE fees for 12th and 9th graders, adopting tuition free scheme and invest in tangibles such as more public institutions, training and paying more for teachers, placing high premium on higher institutions so as to promote research as well as encouraging acquisition of skills through construction and equipping of more technical and vocational institutions (TVET) in the country.

“Let the government seize the moment and pump in money for the education sector. This is where the future lies, and that will be major indicator for the country to improve and develop. We should not believe and patronize these disjointed statistics coming from some of our development partners because they are not realistic. If the knowledge base of the country is not developed, all the projections are just fake to believe”, he said.

As for Engineer David Sieh Weh, he puts it bluntly that the government was contradicting itself with its “fairytales that it is investing in infrastructure” in the country when in fact it is not so.

“In the proposed budget, I am looking at USD10m dollars set aside for construction of roads and bridges in the country and what I see could be roads for Monrovia alone when about 65% of the country’s land mass cannot be accessed during the rainy season. Even in the dry season, most parts of the country cannot be reached. This affects economic growth and development, it affects the farmers and those engaged in the agriculture supply chain. How can you speak of the country’s economic outlook positively when agriculture, being a critical area, is being impaired by lack of roads?”, he wondered.

Perhaps a better summary of the “vague” budget for the fiscal year 2023 came from a US-based Liberian politician, Ben Kofa Fyneah, aka Ben Fyn, who aspires to contest the presidency in 2023.

“The 2023 draft budget has been out for a few days and not a single “leader”, stakeholder or folks with “vested interests” have spoken about it – especially the appropriations,” Mr. Fyn noted.

“The budget reveals the following: the government’s inability to create jobs – especially via innovation; the crass incompetence of the LRA – taxes/revenues seem to have peaked and or stalled; zero in terms of national infrastructural plan. Once again, despite the current public outcry, the agriculture sector is woefully underfunded. No clear government-funded strategy regarding the ever-skyrocketing youth unemployment. Security – especially the police – is not prioritized. Recurrent expenditures – as usual continues to swallow a significant percentage of the budget – especially the high salaries of worthless politicians and political actors (lawmakers). Funding for a National Health Insurance Plan is absent,” Mr. Fyn further lamented.

As more and more voices are being raised against the proposed budget especially after experts have been coming up with more facts why it may not be realistic, there is a consensus from many Liberians that the government must not be carried away by what they called “cooked up statistics” that will only serve the interest of the development partners as opposed to who the budget is meant for.

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