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NOCAL Redux: CBL Pays Thousands to Departing Officials, Tightlipped on Details

NOCAL Redux: CBL Pays Thousands to Departing Officials, Tightlipped on Details

Monrovia - FrontPageAfrica has gathered that the Central Bank of Liberia has paid thousands of dollars to ex-officials as severance and other benefits in contravention to a mandate from President Sirleaf for public entities to avoid extravagant payments of retirement and other benefits to board members.

FrontPageAfrica has gathered that the Central Bank of Liberia has paid huge sum of money to ex-officials as severance, retirement and other benefits, increasing the ceiling set by previous Governors of the Bank

FrontPageAfrica has gathered that the bank recently paid nearly US$300,000 to current Finance minister Boima Kamara who was recently appointed to another position within government and not retired. Other officials of the bank including members of the Board of Governors who were retired were paid huge amount of money by the bank.

One source confided in FPA that besides the pension payment, the bank also operates what is known as a Provident Fund where employees pay five percent and the bank pays the remaining 10% summing it to 15% to be paid to retiring employees.

The bank in recent years, increased the percentage to 20% of salary for an employee for every year the employee worked to be paid during retirement.

During the tenure of Governor Charles Greene, a former employee told FPA that the governor frowned on the hefty packages and reduced the amount, fearing that it would bankrupt the Central Bank, but Governor J. Mills Jones is said to have reintroduced the same extravagant payment during his tenure at the bank.

The hefty payments come as several international financial institutions have reported losses at the CBL.

Unknown Beneficiaries

In the bank’s financial statement at the period December 2015, it is indicated that they paid over 158 million Liberian dollars (L$158,000,000) in pension payment but beneficiaries of the plan are not known.

In the notes to the statement, it is stated that the Bank operates an unfunded pension plan and the related liability is determined by periodic actuarial assumptions under a defined benefit pension plan.  

The CBL also operates a Provident fund under which the Bank pays fixed contributions into a separate entity and the Bank’s obligations to the defined contribution scheme are charged to the statement of comprehensive income in the year in which they fall due.  It is indicated that the Bank has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Loan scheme

While the current interest rate in the country stands at 13.53%, the Central bank that is the regulatory body of the financial sector is operating a loan scheme where employees are given loan at a low rate of 4%.

In the bank’s financial statement for ending period December 2015, it is indicated that staff of the Bank are entitled to loan at 4% as compared to the market rate of 13.53% as at the reporting date.

Another extravagant pension scheme

President Ellen Johnson recently mandated public entities to avoid payment of huge pension benefits. The President cancelled a retirement benefits scheme put in place by the National Oil Company of Liberia when she said the plan was obligating the entity to pay huge amount of money to retired board members.

Similar situation at the National Port Authority where a board retirement package was so huge and led to another decision by the President to cancel such scheme.

Board of Directors in Liberia whose members are paid lucrative board fees and other benefits have failed over the years to ensure proper direction, protecting these entities from wasteful decisions. At NOCAL, the Board of Directors was part of the lavish spending by the entity on fat salaries and other bonuses which led to the collapse of the once flourishing company.

Also, at the NPA, the Board of Directors sat supinely as the Managing Director at the time, Madam Matilda Parker, entered a bogus agreement where she paid US$800,000 to a non-existing company to dredge the port only to allegedly receive the money back through a pay and return scheme.

Madam Parker is currently in court facing trial. Other public corporations like the Liberia Petroleum refining Company and Roberts International Airport experienced similar under performance by the Board of Directors which led to massive abuse of resources at these entities.

The CBL during the tenure of Governor Jones paid millions of Liberians dollars in loans to individuals and according to report the repayment of these loans is becoming a problem as some of the loans were made without proper documentations.

Governor Jones used the CBL loan scheme to create massive awareness in several counties across Liberia, selling what many see as his political agenda for the 2017 presidency. Jones, after the end of his tenure from the bank, has accepted a petition to contest the presidency.

Some financial analysts are blaming the loan scheme by Jones for the inflation currently affecting the country, as the loans pumped millions of Liberian dollars into the economy, making the local currency widespread in circulation, devaluing the local currency.

Immediately following the departure of Jones, the CBL has started the process of printing new banknotes under the claims of attempting to replace mutilated banknotes. The Bank plans to print five billion Liberian dollars, even though it is yet to state the amount of mutilated banknotes to be replaced.  

Inside CBL sources hinted that Governor Jones depleted the Liberian dollars reserve of the bank and as such the bank is in need of Liberian dollars which is prompting the printing of the five billion new banknotes.

Confidentiality claims

When contacted, the Head of Communications at the Central Bank of Liberia, Cyrus Wleh Badio, said the Banks is not at liberty to discuss publicly human resource and its personnel issues including individual severance entitlements, for doing so would be in violation of CBL  principle of confidentiality, a core value of the Bank.

Meanwhile, FrontPageAfrica using the Freedom of Liberia Law of 2010 has written the bank requesting all information, including documents relating to the payment of severance, resettlement and other benefits to current and past officials of the bank.

Investigation continues

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