Liberia: National Draft Budget Critiqued Amid ‘Misplaced Priorities’
By Lennart Dodoo, [email protected]
Monrovia – The House of Representatives is yet to commence hearing on the Draft Budget for Fiscal Year 2018-19 but analysts are raising contentions, citing some contradiction bout government’s priorities.
The Draft Budget which is in the tone of US$562.2 million and was submitted to the Legislature through the office of the House Speaker by Finance Minister Samuel Tweah last Wednesday.
The Draft Budget, Minister Tweah said, was crafted under “extreme difficulty”.
“The President has managed to rationalize the fiscal space. We have to be able to move a good share of resources to pro-poor activities.
“We are doing a lot of rationalization relative to last year’s public sector investment. We have moved up from US$55 million to US$73 million, so we have found US$20 or more millions to add to public sector investment.”
In his presentation to the House, Liberia’s Finance Minister told lawmakers that the budget is “not perfect” but it is an instrument in the direction of moving the country forward.
What’s In The Budget
In its introduction of the draft budget, the MFDP admits that the current outlook of the economy is increasingly challenging.
“Not only is it impacted by the slow recovery from the EVD and the uncertain commodity price shock but also by the slower than-needed progress toward economy-wide diversification, UNMIL drawdown, as well as, the alarming depreciation in the value of the Liberian currency,” MFDP said.
The Weah-led government says expenditure outlay has increased, but it reckons that fall in global prices of fuel and food could help mitigate constrains on the economy.
It is optimistic that the domestic economy is expected to rebound with “improvements, particularly in the mining & panning sector followed by the forestry sector.”
“Additionally, as we strengthen our efforts to diversify the economy, coupled with the continued infrastructural investments as well as prudent policy measures to tackle this mild recession, relatively low but stable growth is highly anticipated,” the MFDP said.
“Real GDP growth is projected at 3.9 percent in 2018 compared to a projection of 2.5 percent in 2017. This represents a downward revision of the values relative to FY2017/18 projections of 5.2 percent for 2018 and 3.2 percent for 2017.”
In the draft budget, infrastructure and basic services is allotted the highest amount put at US$188,769,526; energy and environment get US$132,846,998; health gets US$73,395, 544, follow by social development services with US$46,880,559 amongst others.
Amongst the low funded sectors in the draft budget includes commerce with US$600,000; municipal government is allotted US$4,772,347; and accountability and transparency gets US$17,802,194.
During a press briefing at the Ministry of Information, Culture and Tourism last Thursday, May 3, Tweah said the projected revenue is US$474 million, but his assertion doesn’t represent what is stipulated in the draft budget, which puts the total revenue at US$515,771 million.
This means, a budget shortfall is imminent. Liberia has experienced budgetary shortfalls since the era of Amara Konneh as Minister of Finance when he introduced the medium term budget.
He also bragged about the total savings on salary cuts amount to US$60 million, which also goes against US$4 million, outlined in the draft budget.
Abraham Darius Dillon, a high-ranking member of the opposition Liberty Party, argues that allotments to various sectors of the economy do define priorities that foster growth and development.
“A glance of the Fiscal Draft Budget of US$562.2M for 2018/2019 sends worrying signals. I look forward to explanation for clarity,” Dillion said.
1. Personnel Payroll and Recurrent Expenditures consume a little over 65%.
2. Agriculture carries a bare minimal of 1.5%. This shows lack of seriousness about the Agriculture Sector.
3. Education is about 15%, 10% less than the Education Law requires.
4. Health is under 10%. Hmm!
5. The rest spread around.
Interestingly, personnel payroll alone wallops US$303.3M out of a projected US$562.2M. This means government payroll has increased.
During Ellen Johnson Sirleaf’s regime, the payroll was in the neighborhood of US$280M.
Dillion: “The question now is: How come salaries and benefits announced to be “REDUCED”, but overall Payroll is expected to increase, am I missing something?”
Contrary To The Promise
Liberia’s agriculture, education and health sector have been struggling over the years, and the proposed fiscal budget is far off the mark in resuscitating these sectors especially the agro-based sector, which has the propensity of diversifying the country’s economy.
During the 2017 election campaign, President George Weah promised to prioritize agriculture as a means of empowering Liberians, boosting the economy and making the country more self-sufficient.
The ruling Coalition for Democratic Change’s (CDC) noted in its campaign platform: “A sustainable productive agriculture sector will not only provide jobs for our people, but will also reduce food insecurity. In addition, a vibrant and productive agriculture sector will increase household incomes that translate into higher living standards and better livelihoods for our people.
“Increased food production and food security will decrease food imported into the county which today is largely responsible for our depleted foreign currency reserves. Homegrown items will be lower priced, while providing sustainable livelihood for the more than 80% of the population that depend on agriculture for their livelihood.”
Liberia’s Agriculture minister Mogana S. Flomo, at his confirmation hearing told the senate that he will make Liberia self sufficient in food security in the next four year.
But with an appropriation of just 1.5% of the budget, it is unclear what the future of food security would be in Liberia.
The CDC promised in its manifesto, “In our first term, the CDC government will double the present share of agriculture in the national budget. This will be complemented by designing strategic campaigns to mobilize resources from our international partners to fill the gap required for developing agriculture, with emphasis on food production, preservation and distribution in the interest of farmers and their communities.
“Regulations will be put in placed to govern personally owned farms without undue interference into the affairs of the families to whom the properties are entrusted. There are unresolved issues that continue to retard the development of this sector such as migration of assignee, death or abandonment. Currently, the practice is for the developed property to return to the Government and then they are reallocated to another community resident through and arrangement amongst the local leadership and the Ministry of Agriculture.”
However, the prevailing situation considering the budget priorities have open room for concerns especially as allotments for people driven sectors like education, agriculture and the health sectors are under funded in the draft budget.
This apparently runs contrary to the political manifesto that perpetrated the ruling CDC to the echelon of Liberia’s political powers.