Liberia: Legislature Reportedly Planning to Recast FY2019/2020 Budget, As Govt ‘Foresees Shortfall’

Monrovia – High-placed legislative sources have informed FrontPageAfrica that the Legislature will shortly begin the process of recasting the final phase of the 2019/2020 national budget. According to our sources, the government of Liberia is unable to raise over US$22 million in revenue.

Speaking to this newspaper on anonymity, our Legislative sources hinted that the recast process will be effected in the form of corresponding reduction that will mainly affect goods and services but will not affect salary.

“The recast will include a corresponding reduction that will affect goods and services and not salary. It is expected that government will not achieve in collecting US$22 million in this fiscal 2019/2020 budget,” one of our sources said.

Though our sources said the recast is not going to affect salary, the news is going to come as a “bad news” to many, including civil servants as the government is struggling to regularize salary and raise money for the pending 2020 Midterm Senatorial Election slated for October.

2019/2020 Fiscal Budget

Last 2019, President George Manneh Weah signed into law the national budget for the fiscal period, beginning July 1, 2019 and ending June 30, 2020. The national budget, which was signed on October 28, 2019 totals L$110,460,000,000 or US$526,000,000, provides for the expenditure or operational cost of the Government of Liberia.

The Legislature, following months of intensive deliberations, forwarded the budget to the Office of the President for signing into law. Earlier, the Executive, through the Ministry of Finance and Development Planning, submitted the budget to the Legislature.

The 2019/20 National Budget accounts for three separate revenue envelopes, including Tax Revenue at US$378,000,000, Non-tax Revenue at US$87,200,000 as well as External Resources at US$60,800,000.

It subsequently became law once printed into hand bills by the Ministry of Foreign Affairs.

CSA Survey Shows:

A survey conducted by Center for Policy Action and Research (CePAR) in 2019, showed a whopping allotments in salaries and operational costs to the Legislature, Executive and Judiciary branches of government.

The 2019/2020 draft budget is US$532,906,966, which US$489,956,966 or 91.9% goes to recurrent expenditure, is yet to be officially made public.

CePAR’s research result indicates that US$34,599,815 or 6.4% of the total budget is allotted to the Legislature to defray expense attached to salaries, attend to basic operations including committee hearings among others. Of the amount allotted the Legislature, compensation accounts for 77.74 percent.

For the Executive, the draft budget allots US$700,000 for the President to meet humanitarian efforts that are not defined, followed by the Judiciary that is expected to receive US$15,467,612.00 in salary for the fiscal year. Consultancy cost in the budget will take US$3,177,716.

Among the 11 governing sectors, including Public Administration, Municipal Government, Transparency and Accountability, Security and Rule, of Law, Health, Social Development Services, Education, Energy and Environment, Agriculture, Infrastructure and Basic Services and Commerce and Industry Sectors that are expected to receive, budgetary allotments in the national budget for fiscal year 2019/2020, the agriculture sector has the second lowest budget allocation with an anticipated spending of US$6,208,754 or 1.16%. The least with a pocket change amount is the Tourism Sector of US$4,000.

All other spending institutions under the Agriculture Sector took huge cuts with proposed spending on supplies and inputs put at US$165,000 for the fiscal year.

Taking each sector categorically, allocation for the overall healthcare system is US$75,478,910 or 14.1%, US$6 million decrease from the last appropriation.

This allotment brings drastic decreases to spending entities across the health sector, except for the Ministry of Health itself whose budget was augmented as a result of USAID’s support of US$6.2 million and the Liberia Pharmacy Board with a budget increase of US$1,600.

Spending entities affected by budget cuts, include, but not limited to the John F. Kennedy Medical Center, Jackson Fiah Doe Hospital, Phebe Hospital, National Public Health Institute, Liberia Medical and Dental Council, Liberia Board of Nursing, National AIDS Commission, etc.

“The recast will include a corresponding reduction that will affect goods and services and not salary. It is expected that government will not achieve in collecting US$22 million in this fiscal 2019/2020 budget.”

Legislative Source

Past Budget Shortfall

If the rumors of the budget shortfall become a reality, the shortfall won’t be a new thing to the Liberian government. Back in 2017, during the regime of former President Ellen Johnson Sirleaf, FrontPageAfrica was hinted that Madam Sirleaf’s government would have experienced a deficit of US$41.81 million – the biggest in the 12-year leadership of the former President.

It surely came to pass and the Finance and Development Minister Amara Konneh had to work with the 53rd Legislature to do a recast of the budget.

When this newspaper had inquired from the Ministry of Finance and Development Planning (MFDP), if refused to comment on the issue.

Some financial experts, who had spoken to FrontPageAfrica, had linked the huge deficit to poor fiscal stewardship of the economy at the time.

Again, way back in 2014, the Liberian government experienced another budget shortfall. The International Monetary Fund (IMF) had said then that budget implementation through December 2013 for Liberia was constrained by revenue shortfalls. It stated further that the overall fiscal deficit was projected to reach 3.8 percent of GDP in 2014 (fiscal year), as envisaged at the time of the last review, as the authorities were able to reduce current spending.

However, they said the Liberian authority was strongly committed to preserving expenditure savings and implementing decisive measures to raise revenue collection in the reminder of the fiscal year.