Barely days after the national budget of $785,587,340.00 which is about $272 M more than the $513M projected in June 2021 for the fiscal year 2022 as per the revenue component was submitted to the House of Representatives by President George Manneh Weah through the Minister of Finance and Development Planning, Samuel D. Tweah, Jr and awaiting passage into law, the Liberian People’s Party(LPP) has issued a release expressing doubt about the success of Budget 2022 by challenging how the government in the first place came about most of the figures cited in the document and called on the Public Account and Expenditure committee of the House of Representatives to find out whether the government will collect more revenue or will fall short of the projections.
“Presumably, to present a rosy revenue outlook, President Weah’s Administration has projected an increase in government revenues by $272 in 2022, less than five months after it previously projected $513M as revenues for 2022. How did the CDC-led Administration compute that amount? It is so obvious that they are using the “Number Game” as was frequently done by their predecessor. Why do we analyze so and what is their game plan? The CDC-led Administration asserted that it would borrow $145M from foreign creditors in 2022. Unfortunately, it has not provided any explanation as to the basis of the increase from projected loan of $18M in 2019/20 (See page XI) or projected loan of $19M in 2020/21 (See page # XIII). Moreover, it had projected that the government will not borrow money in 2022 and 2023 to finance its programs”, the Secretariat said in a press release issued yesterday.
The Party said it wants to remind Liberians that experts and ordinary citizens use and/or manipulate numbers all the time citing for an example an individual might report a self-appraised value of his/her assets for financial requirements just like some companies on Wall Street sometimes incorrectly add dividends as part of their regular business receipts to meet revenue targets or they might reduce their liabilities to impress money-lenders.
“Former President Ellen Johnson used the “Number Game” during her administration. For example, the country was owing the Central Bank of Liberia USD $260M by December 31, 2016. Yet, she asserted in 2018 that Liberia had USD $153M in excess cash reserves. Moreover, she persuaded people that Special Drawing Rights were not debt owed to the International Monetary Fund, but the values were money owned by Liberia”, the party said.
Noting that the President Weah led government could be taking after what former President number did, the party said: “The next “Number Game” was to increase the Non-tax revenue by $64M ($148M minus $83M). Did the government assume that it will generate bonus and/or more royalties and rents from concessionary agreements? If not, did the government provide evidence of the 77% increase ($64m/$83M) in the non-tax revenue? LPP did not find any document. Non-Tax revenue such as Property income (i.e., income from mining, forestry, agriculture, road funds, or administrative fees.) is predictable and errors can be reduced. Also, the yearly collection is almost even, meaning, the increase/decrease might not be significant”.
LPP said stated that the use of the ”Number Game” does not end at the credit side (revenue), but it is also used on the debit side (expenses) of the proposed budget as Item # F, under the caption 1.3 Preface on page # v of the Calendar 2022 Budget, the government stated that debt service was projected at USD $120M, meaning it will use USD $120M of the USD $750M to pay creditors (domestic $84M and foreign $35M). It said however, the Special Budget presented in July of 2021 reported domestic payment to be $32M ($19M-principal and $12M-(interest) and for foreign, it was USD $30M ($23M-principal and $7M interest). “Is the government indicating that the payment had changed within three months?”, the party raised a question.
“Now, what was the benefit for increasing the debt payment from $62M ($32M and $30M)? The higher revenue picture indicates that things will be better because the government has more money to do things. Another item was the USD $125M appropriated for “Use for Goods and services.” Again, within the Special Budget of fiscal year 2020/21, the amount was USD $42M for 2020/21, USD $52M for calendar year 2022 and USD $65M for calendar year 2023.
The Secretariat called upon the relevant legislative oversight committees to robustly and diligently scrutinize this fiscal Budget of 2022, which the CDC-led Administration boasts about as being a novelty in post-war Liberia lest the economy delves into tailspin of irreversibility. It added that the Public Accounts and Expenditures Committee and the Committee on Ways, Means and Finance of the House of Representatives should thoroughly investigate as to whether Liberia is poised to collect a windfall of higher amount of revenues, as Minister Tweah is leading the citizens to believe.
The release from the Secretariat also stated the legislative Committees should question the wisdom of the CDC Economic Management Team to include $80M (i.e., an amount from the IMF called Rapid Credit Facility) as revenue. The “Rapid Credit Facility” is an emergency economic privilege that the IMF gives to a country that is experiencing cash shortfalls, but only after the country presents a request and the IMF approves. “So, why did the tax experts include $80M as cash-in-take in 2022 since the cash shortfalls have not occurred yet? Or, is the CDC Economic Team confirming the inevitability of cash shortfall(s) in 2022?” The Secretariat wondered.
LPP said it hopes that the government will not only pay the debt of money owed to the Central Bank of Liberia, but it also will pay the debt owed to the youth of this country, adding that in the view of the LPP, Liberian citizens are divided into those who have nothing and those who have. It stressed that in addition, there are too many children not engaged in any productive work but involved within the cutthroat industries.
“LPP recommends that the government should invest in food production and compete with the private investors. This economic arrangement will provide work that our children can perform without using significant investment to train them. Borrowing more money to pay debt owed to the Central Bank of Liberia will not create jobs that our children need now. Let the government and the communities invest in food producing, diamond mining, gold digging, etc”, the party said.
The party averred that the government involvement will take care of many things and named four of such which include, the issue of ownership of land and mineral resources might be handled by the government, communities will not allow school children to work within these economic activities, communities involvement might reduce the number of illegal business transactions within the counties and communities will use the economic and money earning activities to exercise control within their villages and communities.
“Most importantly, the government should revisit the idea of reinstituting the 10% tax on exported goods that former President Ellen Johnson Sirleaf eliminated on December 5, 2015. Liberia Firestone Rubber Plantation is a subsidiary of Bridgestone and does not sell finished goods, therefore the 10% tax on exported goods will not affect Liberia Firestone Rubber Plantation Company. Moreover, Bridgestone can afford to pass the 10% tax on exported goods that can be included within the price of tires, etc. with any significant impact on the profits of Bridgestone.
“Given the sudden astronomical jump in projection of 65% (from $513M projected in June 2021 to $785M being projected in November for the fiscal period 2022), coupled with the lack of evidential basis and inconsistencies emanating from the CDC Economic Team, LPP urges the Legislature to forensically examine the 2022 Budget before giving its final stamp of approval”, the release concluded.