Senate Grills Tweah on Budget Recast -As Minister Clarifies on HPX $30m

MONROVIA – The Liberian Senate yesterday spent several hours grilling the Minister of Finance and Development Planning, Samuel D. Tweah, Jr to provide more clarity on the proposed recast budget before the upper chamber of the national legislature for concurrence after it was passed by members the House of Representatives with the Minister stating that the $30m placed in the recast budget has its legal reliance from the national legislature and therefore is a legitimate transaction.

Appearing before the Senate along with his team that included some of his deputy ministers as well as representatives of the Ministry of Justice and the Liberia Revenue Authority (LRA), Tweah said, in keeping with the Public Financial Management Law, under Section 23, it is incumbent upon the Minister of Finance and Development Planning to submit to the Liberian senate the report of the supplementary budget annually, taking into account the performance of the economy.

“The purpose of the recast is we had additional revenue of $15m from the World Bank in the form of  budget support, in addition to the $40m committed to the government, bringing the total to $55m”, Tweah told the senators.

The Minister took ample time to discuss the $30m placed in the budget from HPX which became an issue of controversy, since according to Senator Abraham Darius Dillon, there was no legal reliance to legitimize the transaction because the national legislature that should approve such transaction was not informed about the money.

“The government entered into an agreement with the HPX based on what was done here in the national legislature. We entered into a four-month agreement moving towards the multiuser railway arrangement. In 2019, the government received $7m from a short agreement. This year, the government entered into an agreement for four months for $30m”, he said.

He further told the senate that the budget has not been appropriated and that is up for recast in accordance to the Public Financial Management law, in reference to a question asked by Senator Dillon if the Minister was aware that the senate has the appropriation power with respect to the budget and that the minister should not tailor his responses as if the budget was already approved. He said there was no way the Ministry of Finance would go about spending money without the approval of the legislature and that the money approved in the budget is deposited in the consolidated account of the government.

Providing clarity on the $25m that was not forthcoming from ArcelorMittal after it was projected in the 2022 budget as revenue, Minister Tweah said it was true that a projection was made in that direction pursuant to the finalization of the Mineral Development Agreement (MDA) with AML. As it did not materialize, thus risking the budget, the government had to respond by recasting the budget to address the imminent danger ahead.

He said one of the risks involved was that the government would not pay salaries for civil servants by a month, which could spell doom for the economy.

The session which was chaired by Senators Morris Saytumah and Prince Moye of Bomi and Bong counties respectively, had almost all the lawmakers asking questions on diverse areas of the budget with some of them being concerned about specific needs of their constituents.

Minister Tweah responded to Senator Steve Zargo’s question about the Lofa County Road project especially the status of compensation packages for those whose properties and farm lands were destroyed or earmarked to be demolished due to the ongoing road project, saying that the government has taken steps to factor that in the budget and that everything was on course.

While asserting that there is always a difficult situation whenever there is budget recast, Tweah said the most important thing to do in such situation is not to affect the mainstay of the economy such as spending on basic social services like education, health, provision of affordable goods and services because these things affect the people.

He said in the recast budget, government will spend some $11.4m towards subsidy on rice so as to keep the price of the very important commodity within the reach of the citizens on a short-term basis and that the executive will have to return to the legislature to take more action with respect to the subsidy as the crisis in between Ukraine and Russia seems to be far from over.

Minister Tweah also found time to discuss power generation in the country and told the senators that the $14m included in the recast budget is to kick start a $65m expenditure planned for generating power in Liberia through the CLSG arrangement and that the initial amount will go into offsetting already existing arrears the Liberia Electricity Corporation (LEC) incurred with the provision of electricity along the border lines with Cote d’Ivoire and in the Southeastern part of Liberia.

Further discussing the recast budget, the Minister said the $8m included under recurrent expenditure will take care of payment for pensioners, a situation he said had broken down as people who reached retirement ages and are qualified for compensation could not be paid by the government. He said with what has been put in place, money will be available for payment of retirees as soon as they are processed.

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