Liberia: It’s Time to Dissolve Integrity Institutions
THE COALITION for Democratic Change-led government is rewriting the history books on transparency and accountability in Liberia.
PRESIDENT GEORGE MANNEH WEAH administration is celebrating the passage of one controversial US$536 million loan deal with a shady investment firm and is on the verge of celebrating another, a US$420 million with a company owned by the President’s friend, who just happened to have borrowed or loaned him a jet for his presidential travels.
THE IRONY OF BOTH loan arrangements is striking. Two similar Memorandum of Understanding with limited information about the sovereign guarantee or which resources Liberia is expected to give up. What is vividly clear is that they both illustrate clear violations of the country’s code of conduct and clear lack of vetting despite obvious concerns about the credibility issues surrounding one of the firms involved with the loan.
THE US$536 MILLION loan agreement is between the Government of Liberia and the Eton Finance PTE Ltd. While the US$420 million is a Pre-Financing Loan Agreement in the tone of US$420 Million entered into between the Government of Liberia and the Burkinabe group EBOMAF.
The US$420,810,000 EBOMAF project, according to the Loan Agreement document will be financed by Eurobond, wherein, the Republic of Liberia “shall issue a fixed interest Eurobond with a face value of US$420,810,000 at an interest rate of 6.5% to finance the loan. The full terms and structure of the Eurobond, according to the Loan Agreement, “shall be agreed upon by both Parties upon at the time of issuance”.
WHEN RATIFIED the loan will be used for the construction of 256.2 kilometres of paved roads and bridges in Monrovia and major corridors of the interior of the country. Group EBOMAF will begin pre-financing the road project within three months after the agreement is ratified. The roads to be constructed upon ratification through this agreement are as follows: The Sinkor to Kesselley Boulevard elevated Road, Zwedru to Greenville, Toe’s Town to Ivorian Border, and Tappita to Zwedru.
THE US$536 MILLION loan arrangement being handled by Elton Finance Private Limited aims to connect Liberia’s coastal corridors and county capitals of Buchanan-Cestos City-Greenville, Barclayville Road, the Barclayville-Sasstown Road, the Barclayville-Pleebo Road, the Medina-Robertsport Road, the Tubmanburg-Bopolu Road, Rest Stops and Roadside Service Areas, the construction of mini-soccer stadiums in Harper, Maryland County; Barclayville, Grand Kru County; Greenville Sinoe County; Cestos City, Rivercess County; Zwedru, Grand Gedeh County; Robertsport , Grand Cape Mount County and Bopolu.
LAST WEEK, both houses of the national legislature swiftly glossed over the US$536 million paying very little attention to the fact that Eton has no financial history on record, was struck off the Singapore Stock Exchange and pretty much does not exist as a financial company there.
THE SOON-TO-BE ratified US$420 million has been tainted by the fact that EBOMAF is headed by Mr. Mahamadou Bonkoungou, the Burkinabe businessman friend of President George Manneh Weah.
A RECENT FrontPageAfrica investigation identified the mystery wealthy Burkinabè businessman as the same figure currently embroiled in a nasty legal wrangle with the former Prime Minister of Benin, Lionel Zinsou, whom Mr. Bonkoungou has accused of refusing to repay him money loaned Zinsou for his failed 2016 Presidential bid in Benin.
ALL THIS HAS A RED flags of conflict of interest written all over.
SADLY, DURING last week’s hastily arranged legislative hearings, none of the country’s several integrity institutions were called in to give any sound assessment of the two loans on the table.
MILLIONS OF DOLLARS are allocated annually to institutions like the General Auditing Commission(GAC), the Public Procurement Concessions Commission(PPCC), the Liberia Anti-Corruption Commission(LACC), the Liberia Extractive Industries Transparency Initiative (LEITI)and the Financial Intelligence Unit(FIU) but none of them were called to give their opinion on such a crucial matter surrounding transparency and accountability.
THE GAC was established by an Act of the National Legislature, as the Bureau of Audits, to pre audit requisitions, vouchers and payroll in connection with the disbursement of public moneys. This was amended under Chapter 32, section 740-744 of the Executive Law of Liberia in 1956 to audit all accounts of the Government of Liberia in the manner prescribed in the Revenue and Finance Law of Liberia. In 1972, the Executive Law of Liberia was amended, with its Chapter 53, Sections 1-11, establishing the General Auditing Office (GAO). Under this law, the Auditor General was reporting directly to the President. In June 2005, an Act was passed by the National Legislature of Liberia to amend Chapter 53.2 of the Executive Law of 1972 which granted the General Auditing Commission status of autonomous agency of Government amendable to the National Legislature of Liberia. The 2005 amendment makes Chapter 53 of the Executive Law comply with Article 89 of the 1986 Liberian Constitution, which named GAC as one of the three autonomous Commissions in Liberia. However, this amendment did not bring the GAC to full compliance with the 1977 LIMA and the 2007 Mexico reaffirmation.
LEITI is part of the EITI- a global Standard to promote the open and accountable management of extractive resources. LEITI works through a Secretariat guided by a multi-stake holder arrangement comprising the Government, Civil Society Organizations and Private companies to improve the governance of the Extractive sector in Liberia.
Extractive Industries Transparency Initiative (EITI) is a global standard for the good governance of oil, gas and mineral resources. It seeks to address the key governance issues in the extractive sectors.
The EITI Standard requires information along the extractive industry value chain from the point of extraction, to how the revenue makes its way through the government, to how it contributes to the economy. This includes how licenses and contracts are allocated and registered, who are the beneficial owners of those operations are, what are the fiscal and legal arrangements are, how much is produced, how much is paid, where are those revenues allocated, and what is the contribution to the economy, including employment.
THE LACC was established in 2008 by the Act to Establish the Liberian Anti-Corruption Commission as an independent organization to investigate, prosecute and prevent acts of corruption of public officials in Liberia.
THE FIU, established as an autonomous agency of the Government of Liberia (GOL) by the Act of the National Legislature in 2012 (FIU Act, 2012 approved on April 30, 2013 and publish on May 2, 2013), is the central, national agency of Liberia responsible for receiving, requesting, conducting preliminary investigations, analyzing and disseminating information to competent authority concerning suspected proceeds of crime and terrorist property. The FIU vision to build a well-equipped Unit dedicated to an effective Anti-Money Laundering and Combating Financing of Terrorism [AML/CFT] regime in Liberia. The FIU seeks to protect Liberia financial system from abuse of financial and economic crime for the enhancement of national, regional and global peace and economic stability.
AMID THE FUROR over what Liberia is giving up, Dr. Milton Weeks, Governor of the Central Bank of Liberia told a Senate Committee last Friday, that the government has put its consolidated account on the line in order to secure the US$536 million loan from ETON Private Finance.
ECONOMISTS ARE CONCERNED. Putting the government’s consolidated account – the account where all remittances are made to government – up as sovereign guarantee means in the case of any default on payment, ETON, through international arbitration, can demand the government of Liberia to pay the loan through available channels, including the consolidated account. The danger involved is that when this happens, government’s operations would be greatly affected because operational funds would be used to pay back the loan.
ADDITIONALLY, The Consolidated account is a running account that is tied to the national budget. Thus, using it as a collateral means that Liberia may have to rely on other source of revenue to fund the budget or the government may not be able to pay salaries as the budget as is cannot even be financed through the consolidated account.
POLITICAL OBSERVERS are also wondering why would an investor not put their money in US bonds which is the most secured in the world at a three percent return where they will never lose his money but rather put it in a country like Liberia with no credit union at 1. 5 per cent. They stand a better chance investing in IBM or Microsoft than risking on Liberia which is why many believe that the Eton financing may be a quest to clean dirty money.
THE FACT that none of the major integrity institutions are being called to give their opinions on two loans that could hurt Liberia in the long term suggest that this administration has no intentions of being transparent and accountable to the people of Liberia.
FOR THIS, we feel strongly that they all should be dissolve in a bid to save the country money, time and resources.
IT IS SADDENING that a government which professes a pro-poor agenda would ignore the warning signs of bad loan arrangements in spite of the numerous red flags circling over them.
LIBERIA NEEDS every penny to steer its financial course. This is why it is important that we do all we can to ensure that these two loans pass the smell test. If those in authorities cannot muster the courage to have existing integrity institutions form part of the vetting process and legislative debates; then Liberia is better off dissolving them instead of having them on paper without an opportunity to make contributions to issues pertaining to Liberia’s economic security.