In the midst of a challenging time for the Liberian economy, coupled with rising prices of commodities and inflation, the Minister of Finance and Development Planning Samuel D. Tweah Jr has expressed optimism of better days next year because the economy has been able to overcome the shocks from the macroeconomic distortions that kept it struggling for the past three years.
Minister Tweah made the assertion Wednesday, November 17, 2021, when he was hosted in the Studio of Freedom Communications to address variety of issues surrounding the state of the economy and what the citizens should expect from the government as they await the passage of the new budget which is expected to be operational from January 1, 2022 to December 31, 2022.
“If you had asked me this question in 2018, I would have told you that the economy was going through a lot of challenges. But today, I can tell you the economic condition of the country is going upwards but this upward movement has its own challenge of meeting up with all the expectations and other issues. We have been able to overcome the shocks the economy experienced for the past years and there are indicators that point to the fact that we have been able to stabilize the economy”, the Minister said.
Minister Tweah told the listening audience that the government has proposed the budget of $785 M, the biggest ever in post war Liberia for the next budget year which commences from January 1, 2022 and will create enough fiscal space where government will increase its expenditure of development in critical sectors of the economy which include but not limited to education, security, health, education, etc.
When asked what could be the sources of revenue to support the budget given the fact that the COVID 19 is negatively impacting on the economy, Minister Tweah said that the government has been able to significantly improve upon its domestic mobilization drive which is key to achieving the target of the budget. He added that in the last budget year, the government was able to realize more than it targeted for domestic revenue generation taking it from $550M to $643M.
He said besides, government was able to generate some extra money from outside government bureaucracy such as saving from cut on some operational costs such as fuel and lubrication, scratch cards, etc.
He lauded how the government has been able to manage the revenue to stabilize the economy such as keeping the prices of goods and services down against the global rise of prices of commodities owing to the devastating effects of the COVID pandemic.
“The implication of what we are saying is that there will be more money to make fiscal decisions that further expand the economy to create jobs and opportunities for our people and undertake meaningful development for the country”, Minister Tweah said.
Giving some insights where the government will place priorities, Minister Tweah mentioned security as one of the areas stressing that there is no way one can grow the economy and keep the security sector stagnant, adding the government is going to recruit about 1,000 additional policemen, unspecified number of army, national fire service as well as spending on procuring equipment and accessories to make their job effective.
He also stated that the government plans to employ 7,000 additional teachers to close the gap in the system but it will be done in phases as well as health workers to solve the acute manpower needs of the sector.
“So we have grouped them under what we called the ‘vulnerable civil servants- the security, the teachers and health workers and we are trying to work out something that will cater to welfare as people who offer critical services to the country”.
He also said agriculture remains a major sector that the economy is dependent on to grow and stated there is more funding in the sector except that the government has to find a way of aggregating the funds so as to direct them towards a target within the sector. He noted that there has been huge donor funding into the sector and these funding have to be poured into a specific direction and there has been conversation around how best they can be put to maximum use.
Giving more details of what the government intends to go with the sector, Minister Tweah said that the government is studying whether to go back to government being the major buyer of cash crops like in the days of the defunct Liberia Produce Marketing Corporation (LPMC) and that new laws could be made to make LACRA to assume the role.
He stated further that the government has received suggestions that land clearing is one of the major challenges facing farmers and the government is looking at clearing large parcels of land that will enable farmers to plant their crops on a larger scale.
Minister Tweah debunked the perception in the public that the International Monetary Fund (IMF) has been running the economy entirely with the government playing no major role.
“We design our own plan and share it with the IMF which operates a supported project with the government. The harmonization program was the idea of President Weah who made it a policy that no official of the government should be above a minister. The program got the commendation of the IMF and the World Bank”, he said.
Minister Tweah took enough time to speak on the recent scorecard from the Millennium Compact Corporation where the country for the third time failed to pass more than 10 of the indicators since 2017, there have been significant challenges, we never passed regulatory quality, government effectiveness, Girls Primary education completion rate and land rights because the fiscal space was not enough for the Government of Liberia to do a lot of things. He also blamed this on the lack of data which the government is unable to produce.
“There are a series of indicators over time. Yes, in the past 3 years we have not passed 10 indicators and there have been challenges. When you look at our performance since 2017, there have been significant challenges, we never passed regulatory quality, government effectiveness, Girls Primary education completion rate and land rights because the fiscal space was not enough for the Government of Liberia to do a lot of things. He also blamed this on the lack of data which the government is unable to produce.
“Different entities have to pay attention to the policy space, it is not just about doing something it is about doing something that has an impact on multiple variables that the bureaucrats in the ministries and everybody have to pay attention to,” he cited.
He proposed that the government should also pay more attention to intangible indicators just as much as it does with tangible ones in infrastructural development such as roads, buildings among others.
“We are undoubtedly going to pass next year,” Tweah emphasized, while refuting widespread rumors that failing the MCC scorecard is an indication that the country is losing revenue.
The Finance Minister stated that the nation is going to see a jump in its next year’s scorecard and that people should not just see the MCC grading as being so important because the country wants to qualify for a Compact Grant but emphasized the need to put the various indicators into lawful process and practicality.