Monrovia – Bad road network is one of Liberia’s main development problems. So, when the government squandered an opportunity to remedy the problem, concerns obviously heighten about its ability to transform the country’s road problems – which experts deem a major binding economic constraint.
Report by Alpha Daffae Senkpeni, [email protected]
When President George Weah assumed the presidency in early 2018, he was pushing for one key thing: fixing roads. President Weah drew local and international media attention when he said in a popular BBC interview that he was committed to “building the road from Liberia to Ghana”. Regardless the comical nature of his comment, the Liberian leader showed that road was priority.
In fact, his administration was desperate to initiate a coastal highway to connect counties in the Southeast of the country to Monrovia. It was a wild goose chase evidence by a failed move to secure two loan deals.
But before Weah took the helm, his predecessor had already cemented a deal with the Americans. The compact was intended to solve two of the country’s major economic glitches: bad roads and lack of electricity. These still remain insurmountable to Liberia’s economic recovery.
Ellen Johnson-Sirleaf was successfully in sealing the Millennium Challenge Compact – a US$257 million agreement meant to fix Liberia’s power quagmire and ease the bad roads condition.
As part of the MCC agreement, the Americans were to provide US$15 million for road maintenance. But that would have happened only if the Liberian government made available the same amount as a matching fund.
States the MCC on its website: “National Road Maintenance Activity provides for matching Government of Liberia contributions up to $15 million dollars into a Matching Road Maintenance Fund to conduct periodic maintenance on primary paved and unpaved roads in fair condition. Conducting periodic maintenance on these roads should improve their condition and extend their useful life. The Roads Sector Reform Activity includes training and technical assistance in data collection, maintenance planning and institutional systems at the national level, including the Ministry of Public Works and The Office of National Road Fund. This activity aims to improve the prioritization of maintenance projects and institutional management of the National Road Maintenance Activity.”
Unfortunately, the MCC has canceled the road fund agreement which means Liberia has lost US$15 million intended to repair or maintain major roads. There were several warnings to the Liberian government about the cancellation of the agreement but none were appeared to have been heeded.
In April 2019, the MCC warned the government, in a communication, about lackadaisically approaching its part of the bargain but the government apparently played deaf.
In another letter written on June 19, 2019 and signed by Kyeh Kim, Millennium Challenge Corporation’s Principal Deputy Vice President, the Liberian government through the Ministry of Finance and Development Planning was reminded about its failure to meet up with the agreement. The MCC was concerned that the government was diverting road funds and not conforming to the Compact agreement.
Wrote the MCC to the Ministry of Finance: “Since Issuing the April 2019 Roads Implementation letter, MCC has been monitoring progress on the necessary government actions regarding the National Road Fund. Specifically, the April 2019 Roads Implementation Letter stated that unless the government transferred all outstanding road levy revenue to the NRF by May 30, 2019, and made subsequent monthly transfer in accordance with the National road Fund Act, MCC would not be able to disburse MCC Funding for the Compact’s Matching Road Maintenance Fund Sub-Activity . Of particular concern was approximately US$8,000,000 collected by the Liberia Revenue Authority but not transferred to NRF accounts since the end of 2018.”
The MCC was worried that the government was not doing “regular transfer of collected levies and adherence to the National Road Fund Act are the primary indicators of the success”.
“Although the MCC is pleased to see funds transferred to the NRF, this amount does not represent full amount required pursuant to the April 2019 Roads Implementation Letters nor the National Road Fund Act. In addition, MCC notes that those transferred amounts also do not meet the milestones described in the payment schedule proposed by the government in its letter dated May 7. In light of this, MCC is unable to consider disbursement going forward for the Compact’s matching Road Maintenance Fund Sub-Activity.”
– Excertp, MCC Letter to the Government of Liberia
In the letter, the MCC was also emphasized that the government was transferring far less than what it was supposed to remit in an escrow account set up for the road fund.
“As of May 30, 2019, based on the latest information provided by MCA-Liberia, the government has transferred only 200,000,000 Liberian dollars and US$369,041 – equaling approximately US$1, 5000,000 of the outstanding US$8,000,000 – into the NRF. In additional, MCC understands that fuel levy collections for the month of April totaling 413, 128,099 Liberian dollar and US$49,718 – approximately US$2,200,000 – have been transferred to NRF,” the MCC letter continued.
“Although the MCC is pleased to see funds transferred to the NRF, this amount does not represent full amount required pursuant to the April 2019 Roads Implementation Letters nor the National Road Fund Act. In addition, MCC notes that those transferred amounts also do not meet the milestones described in the payment schedule proposed by the government in its letter dated May 7. In light of this, MCC is unable to consider disbursement going forward for the Compact’s matching Road Maintenance Fund Sub-Activity.”
The cancellation of the MCC Road fund comes as potholes on major roads in Monrovia and its environs worsen. Several stretches of roads are becoming deplorable causing traffic for motorists and at the same time imposing hardship of vehicles owners who have to spend on repairs and spare parts.
Liberia already faces a massive challenge with its roads. A World Bank survey shows that out of 9,182 roads in the country, just 734 are paved. The survey shows that Liberia needs US$2.230 billion to rehabilitate and or upgrade paved primary roads, while US$1.203 billion is needed to rehabilitate existing rural roads and or construct new ones.
The Ministry of Public Works remains tight-lipped on the issue while the Ministry of Finance and Development Planning is struggling to convince to MCC to rescind its decision.
Boniface Satu, head of the Road Fund office, says the government has been working to make amends by ensuring that US$3.5 million is reserved in an escrow account at the United Bank of Africa. He admitted that the government delayed in making the payments to the account but has made some corrections.
“We currently have US$3.5 million in the account – the government started making her contribution. The Government has some difficulties and that’s why the government didn’t put all there at the time but we are on course,” said Satu, who added that “the government has not touched the road fund money for this fiscal year beginning July”.
He said the government has been engaging the MCC about the level of progress they have made in gathering and saving the road funs.
“The Minister of Finance made a visitation to the United States to tell them that we are committed to doing what they want – moving forward; the government is making sure that all the fund flow in the account. We are doing all the right things to ensure that all the right things are done,” Satu said.
However, it’s uncertain whether the MCC will withdraw its decision despite the optimism from Mr. Satu and the Liberian government. In its letter, the MCC pointed out that the progress the government had made but it was also concern about the mishaps in making the matching fund available.
“We recognize the government’s success in passing the National Road Fund Act and subsequently establishing the National Road Fund Office. Those achievements are essential building blocks necessary for strengthening Liberia’s road network, and consequently elevating economic opportunities and the living standard of Liberians.