The newly built Chinese Chambers of the Liberian Senate yesterday, Tuesday, came to an abeyance for hours as lawmakers rigorously crisscrossed the country’s Finance and Development Planning Minister Samuel D. Tweah over the controversial salary harmonization scheme which has left most civil servants across the country extremely frustrated and disgruntled, leaving the beleaguered minister to sound a caveat that the Government would be headed for an imminent shutdown unless the Liberian legislature urgently approves one-twelve (1/12) of the 2019/2020 National Budget to cater to the government’s operational expenditures, The ANALYST reports.
“The fiscal period has already elapsed for 2018/2019 and we have started another fiscal year without a budget, if the Legislature does not come up with a resolution to approve another one-twelve of the proposed budget, we are heading for a government shutdown,” Minister Tweah reiterated during a public hearing at the Liberian Senate which saw Senators cross examined the Minister for more than four hours.
His warning came as the government announced it has already exhausted the first one-twelve from the draft 2019/2020 National Budget which is in the tone of USD532million. According to the Finance Minister, the amount constitutes USD$47million, which he disclosed has already been exhausted by the government. Section 17 of the Public Financial Management (PFM) Law mandates the Ministry of Finance to expend 1/12 of the proposed national budget in the event the legislature delays in passing the new budget which enters into the new fiscal year.
Minister Tweah and the Ministry of Finance and Development Planning have been a focus point in recent weeks as thousands of aggrieved civil servants across the country go disgruntled over claims of huge salary cuts from the government’s bloated payroll. Minister Tweah, who appeared extremely tired after standing nearly five hours of painstaking moments in which senators questioned the government’s bloated payroll, urged the legislature work along with the Executive to act on the budget in order to avoid the looming shutdown of the government. The precarious financial stagnation facing the government has also compelled the House of Representatives to pass a resolution for the continuation of the government.
“Madam Vice President and President of the Liberian Senate, Senators, we are in a very difficult situation. Our economy is in a downturn, and we therefore need to take some harsh economic policy reforms in order to address the situation,” he advised members of the Senate. “One of the things we need to do is to raise our tax level to the extent that we do not need to be looking for revenues here and there,” he adds.
He described the recent controversial salary harmonization scheme as one of the several economic reform policies aimed at reducing the country’s huge economic wage bill. At the moment, Liberia is said to be overburdened by its cumbersome wage due to bloated payroll, mounting foreign and domestic debts which have been accumulated since 1978.
“Right now our domestic wage bill is around USD310million. We are trying to reduce this wage bill by a considerable number, and the only way we can do this is to increase our kevel taxes so that we can fill in the gaps that have been left behind,” Minister Tweah intoned. He also warned the country risks losing on the IMF’s direct budgetary support program of USD61million if the current harmonization process is not completed as ongoing.
“The IMF has a direct budget support program that we need to capture in here,” he reminded Senators. He added: “Part of this reform that we have now embarked upon is to ensure that we harmonized salaries to fit within this reform program because we don’t want to lose on this one. This will be huge boost for our budget envelope.”
Minister Tweah however clarified that no salaries were cut as has been widely reported in the media. “We did not cut salaries from civil servants,” he declared. “The entire noise about salary cut came from misunderstanding.
There were 14,000 people who did not have USD accounts. So, what we did was that we paid them 30% of their salaries in Liberian Dollars. The remaining 70% is what we have not paid because most of them did not have USD accounts, and we are now working on modalities to pay them into their USD accounts. But, in essence, we took into consideration the skills set base on equal level of credentials and equal pay.”
The embattled Liberian Finance Minister Tweah also indicated during the hearing that the entire government is headed for a complete shutdown unless immediate action is taken by the legislature to address the country’s growing waves of economic hardship characterized by inflation and rising food prices.
Meanwhile, cross-examination of Minster Samuel is expected to continue today at the Liberian Senate with several senators expected to ask more questions on the fixing of the nation’s fading economy.