Monrovia – FrontPageAfrica has reliably gathered that government is experiencing a deficit of US$41.81 million – the biggest in the 11-year leadership of President Ellen Johnson Sirleaf.
Report by Lennart Dodoo, [email protected]
“The implication this has for the next Government is that they will be starting from negative cash balance in bank with huge debts to repay.
This could cause several donors to pull additional funding from the Government because they can no longer trust the Government to be fiscally responsible.” – Financial Expert
The Ministry of Finance and Development Planning (MFDP) has not commented on the issue despite inquiries made by FrontPageAfrica.
As seen from a reconciliation report in our possession, there is a possibility of President Sirleaf leaving the next Government with a significant domestic debt.
Financial experts have linked the huge deficit to poor fiscal stewardship of the economy.
“Former Minister Amara Konneh was noted for the constant budgetary shortfall, but at no time did we experience such a huge deficit under his regime.
This could probably be the result of poor economic management,” an expert told FPA.
FPA further gathered from the experts that the government has been running a balanced budget.
This means the Government will only spend money when it collects and by the end of each fiscal period, the books should be balanced or at least small surplus or very small deficit.
“Running a US$42 million deficit can only be termed as reckless and irresponsible fiscal management,” the expert further told FPA.
Review of preliminary numbers available to us indicates that the government is poised to collect the same US$525 million or thereabout as it was in other fiscal years and but it remains a mystery why the government would experience such huge loss.
“The implication this has for the next Government is that they will be starting from negative cash balance in bank with huge debts to repay.”
“This could cause several donors to pull additional funding from the Government because they can no longer trust the Government to be fiscally responsible,” the financial expert told this paper.”
Some employees within the MFDP who spoke with this paper on the basis of anonymity said the deficit is a result of “dangerous spending”.
Such spending under the current IMF program, according to expert, is not permitted as the government is only to spend what it collects.
“On this one, there is no room to blame those who ran the ministry before because this is a matter of spending only what you collect and so it has nothing to do with what happened in the past.”
“It is just plain irresponsible to be spending money that you don’t have.”
“Even in our personal lives, there is a limit to running a deficit so how can our Government, especially in these last days, be running such huge deficit?” the expert rhetorically asked.
FrontPageAfrica has not able to go into the details and complexities of the problems, but the staff of the ministry indicated that the minister has no interest in fiscal management, unlike his predecessor who held weekly Financial Management Team (FMT) meetings to look at the entire picture of the economy and make decisions on spending.
That FMT meeting, FPA was informed, brought the technicians together in one room to look at the revenue picture, the allotment, and then the disbursement.
By this meeting, the necessary decisions were made on what to fund and what not to fund so that Government did not run a deficit. The staff informed us that the current minister has absolutely no interest in doing such thing.
Staffs at MFDP also accused the Minister of not consulting many of his staffs on decision making based on his conviction that many of the staffs there are corrupt.
FPA was further informed that the Deputy Minister for Budget is no longer responsible to allotments as Minister Kamara has taken that responsibility unto himself.
FrontPageAfrica has, however, not been able to verify this information.
“In the past, when a request came from the President or another cabinet minister, the Finance Minister will send the request to the Budget Minister who will then seek the advice and analysis of the technical staff responsible before a decision can be made, but now things are different.
The Minister is not law and gospel. In some cases, the boasts that he has divine power and understanding so when God speaks then he makes decision,” another staff told this paper.
The minister also stands accused of taking money from various donor projects under the Project Financial Management (PFM) Unit to fund the expenses of Government.
“Now, because those funds are intended for specific projects, if the Government is not able to return those funds to those accounts, those projects will be at risk and donors could pull back their funding to those projects and future projects,” an insider said.
“This situation needs to be brought under control immediately because this singular event has the propensity to rewrite the history of her administration,” the financial expert who is an insider at the MFDP told this paper.
The reconciliation report further shows that the Government has raised approximately US$525 million in revenue but have paid US$3 million to ECOWAS as trade levy (ETL) so therefore the net revenue collected for FY16/17 is about US$522 million.
Additionally, the report shows that Government has borrowed nearly US$39 million from the CBL and also took another US$27 million from various project accounts, some of them being World Bank project intended for special use. It means that those projects will be stalled because their monies have been used by the central Government on something else.
At the moment, our sources inform us that in spite of the huge deficit, the Minister is still making efforts to ensure that additional US$4 million is paid to the contractor working on the Executive Mansion, while another US$6 million should be paid to George Haddad’s Prestige Motor.
If these amounts are added, it will carry the potential deficit to US$50 million.