Liberia: Government Entities Announce More Salary Cuts Amid Deepening Economic Crisis
MONROVIA – The hitches in obtaining the green light to print new banknotes has, apparently, left the George Weah-led administration to continue its salary reduction spree among civil servants, further denting the purchasing power of Liberians amid skyrocketing prices.
Several government entities have over the past few weeks been announcing salary cuts, citing the state of the economy and poor revenue generation in the case of autonomous entities like the Liberia Electricity Corporation (LEC) which announced a 30 percent pay cut this week.
The Ministries of National Defense and Public Works have joined the spree, reducing the salaries of the civil servants in the midst of severe hardship.
In a leaked memorandum issued on November 27, under the signature of the Human Resource Director of the Ministry of National Defense, Cydda Wolo Gballakollie and in the possession of FrontPageAfrica, the ministry informed civilian employees of an 8.5% deduction in their salaries.
According to the memo, the additional deduction in salaries forms part of government scheme and goals of achieving a wage bill of US$297million.
“The Department of Human Resource writes to inform all employees that there will be a further reduction in salaries of civil servants conducted by the Ministry of Finance and Development Planning wage Reform Management Team,” the memo stated.
Ministry of Public Works
The Ministry of Public Works is the arm of government responsible for infrastructural developments in the country.
Employees at the Ministry, particularly engineers remain committed and steadfast in carrying on their assigned tasks and responsibilities.
But the latest pronouncement made by the Ministry to slash the salaries of civil servants for the second time running appears to be a ‘slap in the face’ to them.
In a memorandum issued on November 20 under the signature of the Human Resource Director at the Ministry of Public Works, Sarah Toe McKinney, the ministry released processes and procedures through which government’s mandate of 8.4% salary cut will be effectuated.
The memorandum disclosed that 6% will be deducted from civil servants gross salaries for the month of September, while the remaining 2.4% will be deducted from the gross salaries of October.
It revealed that 80% of civil servants’ salaries will be paid in United States Dollars (USD), while 20% will be paid in Liberian Dollars (LRD), using the exchange rate of 209.98.
The latest cuts in the salaries of civil servants brings to two (2) the number of times their salaries have been cut by government to help reduce its wage bill.
GOL Harmonization Process
The Government of Liberia (GOL), through the Ministry of Finance and Development Planning and the Civil Service Agency (CSA), initiated the wage harmonization process shortly before the passage of the National Budget for Fiscal Year 2019/2020.
The overall goal of the exercise is to maintain and implement a sustainable Public-Sector Personnel and Wage Bill Management System.
The objectives include: achieving reasonable reduction in the overall GoL Wage Bill from around 60% to 40% of total revenue, elimination of waste and abuse in the personnel and pay system of all spending entities, improved pay and standardized management of human resources across government.
But the wage harmonization process initiated by government appears to put more tears in the eyes of civil servants, instead of smiles on their faces.
Already, civil servants are catching ‘hell’ to withdraw their salaries and other monies saved from their accounts at various commercial banks in the country.
Commercial banks lack monies
Commercial banks operating in Liberia have been severely hit with the lack of money to disburse to their clients or customers.
Money sent by diaspora Liberians and others to friends and relatives in Liberia are difficult to be disbursed at these commercial banks as a result of the ‘no cash syndrome’ that has taken over the nation.
Civil servants most often stand in long queues for hours to withdraw their monies from these commercial banks.
In another instance, tellers assigned at these commercial banks are constrained to pay mutilated bank notes to clients or customers, due to the lack of monies in those banks.
New measures issued by the Central Bank of Liberia (CBL) appear to be making the situations worse, than better.
Portions of monies deposited are disbursed at the will and pleasure of Tellers, while mobile money service at local money exchanging bureaus is another option for which you can receive your funds deposited at these commercial banks.
Clients and customers doing transactions through Moneygram or Western Union are compelled to open their respective accounts before their monies sent are withdrawn from the banks.
The need for a national emergency
The present situation continues to impose more hardship on the already impoverished Liberian people.
Businesses are shutting down due to the decline in the purchasing power of civil servants who are the highest number of employees in the country.
Many persons believe that government should sincerely inform its citizens about the latest happenings, what the contributing factors are, and how it can be addressed.
One of such persons is Grand Bassa County Senator, Jonathan Kaipay.
The Liberty Party lawmaker believes that the Executive branch of the Liberian government should inform citizens about the status of the country’s economy.
“It’s about time that the government gets on the drawing board so that we can identify a national situation. I think the government of the day has to tell us exactly what’s going on, especially the executive. Are we having an economic emergency? Are we having cashflow problem? Are we moving towards dollarization for the fact that you can see move USD than Liberian dollars? Are we having capital flight, what are the issues? “Let’s get on the table and look at them and from that perspective, we can now explain to our people how to move forward,” he said.
Senator Kaipay further called for recommendations contained in the Kroll and Presidential Investigative Team (PIT) reports to be fully exhausted before the printing of new Liberian banknotes.
He condemned recent justification made by Representative Acarous Moses Gray, that government should print new money to pay civil servants.
“Some of our colleagues from the Legislature like Hon. Gray from the CDC insinuating that said part of the people for printing new money is to pay salaries, are you kidding me? Are you saying that every time we have a salary problem, when we have a liability we’ll print money? So, when I talk about establishing the facts, if we have an economic problem, if we declare it as an emergency, if we attach importance to it, those things should be listed,” he noted.
Loss of appetite for government’s job
The persistent cut in the salaries of civil servants, bulk of whom are underpaid, continues to slow down effective and efficiency at various government ministries and agencies.
In some public places, civil servants show up for job at noon, as a result of the situation.
Generators at ministries, agencies, and corporations are switched off during most of the hours, making those areas to be non-functional.
Most civil servants busy themselves by either selling mini-goods at those ministries and agencies, or busy themselves by engaging into meaningless discussions at their respective job sites.
Anger and reluctance as a result of continuous pay cut continue to slow down civil servants’ anxiety and zeal to carry on their duties and responsibilities in Liberia.