‘Green Shoots of Recovery Sprouting’ -Tweah Tells WA Colleagues About Liberia’s Economy -Takes Chair of Convergence Council of Ministers
Despite enormous challenges that have berserk the growth and development of Liberia, Africa’s oldest Republic, including a decade-and-half civil conflict and ruinous double pandemics, it is becoming clearer by the day that the country is taking its rightful place in the comity of nations, both leadership wise, particularly in Africa, and recovery of its economy—both of which were brought to their knees over the years. The George Weah administration, which faces the combined brunt of the challenges have been facing them head-on, mustering all the moral, professional and resilient courage they can muster, and all this have been paying off greatly. Taking over the rotational leadership of the Convergence Council of Ministers of Finance and Central Bank Governors of the West African Monetary Zone (WAMZ), along with Central Bank Governor Tarlue, Finance Minister Samuel D. Tweah have been updating colleagues on how the Weah Government has been pulling Liberia out of the valley and the slop towards the hilltop of socioeconomic recovery and stability. The Analyst reports.
What is known as the Convergence Council of Ministers and Governors of Central Banks of the West African Monetary zone (WAMZ) convened its 45th Meeting virtually over the weekend, electing Liberia’s Finance Minister Samuel D. Tweah Tweah Chairperson along with the Central Bank Governor Aloysius Tarlue.
In an electrifying statement, Minister Tweah not only explored intricacies faced by economies of the West African sub-region, particularly amid the devastating impacts of Ebola and COVID-19 and what but be done for steady recovery, but also expounded on progress being made in Liberia which is also worst hit by the pandemics.
He briefed his colleagues that Liberia is making tremendous progress in recovering from a 14 year civil conflict and serial pandemics with real growth now projected at 3.6 percent by the end of 2021, compared to a negative growth of 3.0 percent recorded in 2020.
According to Minister Tweah, average inflation rate for second quarter of 2021 moderated to 8.6 percent, from 11.1 percent, in the first quarter, mainly driven by the broad stability of the Liberian dollar, increased inflows of remittances and the tight fiscal and monetary policy stance.
“Hence, inflation forecast for third quarter of 2021, is set at 8.5 percent, with a bandwidth of +/-2 percentage points,” the Liberian Finance Minister told his West African counterparts. “Consequently, green shoots of recovery are sprouting.”
Going forward, he said, Liberia remains determined to continue to implement structural, institutional and sectoral reforms to boost economic recovery, acknowledging that work on improving the business climate and attracting investment and creating job are critical in the short to medium term and are ongoing.
Tweah said enabling the agriculture sector to be the lynchpin of employment remains the focus of the Weah-led government, adding: “We will also sustain our efforts to diversify the economy and scale up spending on infrastructure and on human capital development.”
“As Chairman of Council, I look forward to working with colleagues to further the aims of Convergence and monetary union,” he averred. “We look to work with our respective Heads of State to overcome obstacles we currently face on the road toward the monetary union via the ECO, since this has tremendous macroeconomic stabilizing ramifications for the sub-region.”
The Liberian Finance Minister asserted that the Mid-Year 2021 WAMZ Statutory Meetings came at a time when the devastating impact of the COVID-19 pandemic have proved challenging for various economies of the sub-region, hailing a combination of resilience, strong support from development partners and the international community and the sheer determination of Governments and policy makers to outlast the turbulence and trepidations.
According to him, COVID-19 containment measures adopted by the Member States do have implications for overall macroeconomic management and for meeting the Convergence Criteria.
The impact has been dire for several trade and regional integration programs as stated in the remarks of the President of the ECOWAS Commission, he said and added: “We see that COVID-19 is even impacting some of the convergence indicators. For example, IMF supported on-lending through central banks to sustain revenue during COVID-19 may cause countries to fail the Central bank financing criteria.”
“We believe this should not be the case since this is not effectively central bank lending,” he said further, indicating that Liberia has not received a dime from the Central Bank of Liberia since the last two fiscal years.
Minster Tweah reflected on the fact that the coronavirus pandemic hit Liberia at a moment when the country was recovering from the pre-existing challenges of the withdrawal of United Nations Mission in Liberia (UNMIL), international commodity price shocks, among many other challenges.
He said: “The marginal gains made in recent years at the economic front have been eroded by the pandemic, which somewhat retarded the momentum we began with at the onset of our IMF-supported program. As we speak, COVID-induced global supply chain complications may hold further implications for economies. This is coming despite serious improvements in vaccination delivery globally, which was projected to have a positive, stabilizing impact on supply chain, moving supply chain prices to their pre-COVID levels. This prediction has not materialized and such stability may happen well into the middle of next year, placing countries under some pressure to grapple with short term price vulnerabilities.”
While the last two years have been challenging, Tweah said, Liberia has seen some strong signs of resilience and recovery; domestic revenue reached its highest nominal level since end of war in 2003; Government has stop the accumulation of arrears on account of deficit-financing and is living squarely on budgeted resources; all of these evidence our commitment to macroeconomic recovery and to meeting our Convergence Criteria.
He noted that across the spectrum of the WAMZ, real GDP growth dipped while inflationary pressures rose due to disruptions to global and local supply chains. Fiscal deficits widened as the domestic revenues shrank while expenditures surged.
“Most national currencies depreciated due to weak export performance and increased cost of importation. These and other factors underlined the Member States’ inability to sustain improved performance on the Convergence Criteria,” he said.
Taking the Chairmanship
Liberia Takes Over Chairmanship of Convergence Council of Ministers and Central Bank Governors of the West African Monetary Zone (WAMZ).
At the 45th Meeting of the Convergence Council of Ministers and Central Bank Governors of the WAMZ held on Friday, August 27 via Zoom, Liberia assumed the leadership of the Convergence Council of the WAMZ, taking over from Sierra Leone.
The WAMZ comprises English speaking countries of West Africa plus Guinea, which, though being French-speaking, is not part of the eight francophone countries that make up the West African Economic and Monetary Union (UEMOA).
In accepting the chairmanship, Finance and Development Planning Minister, Hon. Samuel D. Tweah Jr, Minister Tweah proffered apologies for Liberia not being able to host the meeting physically due to the recent resurgence in the COVID-19, but expressed the country’s optimism in hosting under more favorable conditions.
He urged Ministers and Governors of Central Banks in West Africa to continue the path of implementing prudent policy measures to reverse losses seen since the onset of COVID-19. He stressed that despite the negative impact of COVID-19, Liberia has shown marked economic resilience, with inflation trending downward to around 8 percent and domestic revenue reaching its highest nominal level since the end of war in 2003.
Minister Tweah observed that West African countries are expected to face price vulnerabilities due to global supply chain shocks on account of the persistence of the Delta variant of COVID-19, noting however, that prices are projected to normalize by mid middle of next year.
The Minister added that COVID-19 has impacted some of the Convergence indicators, such as central bank financing. He noted that although Liberia has not received a dime in central bank financing for two fiscal years now, it is said to have failed the Central Bank financing indicator because of COVID-19 related disbursement from the IMF that were on-lent to Government through the Central Bank of Liberia. The Minister argued that this should not be considered normal central bank financing.
Minister Tweah pledged the Government of Liberia’s commitment to support both Convergence and West African Monetary Union through the Eco.
After presentation of a technical report from the Governors Council, presented by CBL Governor Aloysius Tarlue, who also assumed the Chairmanship of the WAMZ Governors Committee, Ministers and Governors deliberated a number of observations and recommendations.
Key among them was the Governors observation that IMF COVID-related and similar other such as the pending SDR reallocations should not be considered as central bank financing, agreeing to work toward having the WAMZ technical team revise the numbers and enforce the standard.
The meeting adjourned after adopting the report from the Governors Council and is expected t