Monrovia – The Central Bank of Liberia recently announced that it will soon infuse on the Liberian market new banknotes with the addition of a new denomination of $500.
Report by Henry Karmo – [email protected]
“If You read the communication, they did not ask to change features on the money or introduce $500 bank notes, so I don’t know where that authority came from”-Julius Berrian, Chairman Banking and Currency Committee, House of Representatives
“This new series includes, among others, the unifying nature of the existing Liberian Banknotes, and as such, has maintained all previous portraits.
The CBL has also reinforced the security features in the new series, which are both visible and invisible. In addition, the Bank has ensured that the new series is printed on a higher quality substrate to guarantee longevity and reduce porosity.
The new series also introduces a new denomination of L$500 (Five Hundred Dollars), in addition to the present denominations”, the bank stated.
Since the announcement, there has been a public concern that the CBL is overstepping its mandate by introducing new features and denomination which, some say, was not mandated by the Legislature.
The CBL has claimed that the action is part of its mandate and it also got legislative endorsement.
No legislative mandate
But Representative Julius Berrian, Chairman of the House of Representatives Committee on Banking and Currency told FrontPageAfrica that the Legislature did not give the bank any mandate to make changes in features such as color, size and denomination on the Liberian dollars.
Representative Berrian has raised concern over the CBL’s authority to change features in the new bank notes and print new five hundred Liberian dollars denomination.
In an interview with FrontPageAfrica, the district #10 Montserrado County lawmaker said the request from the CBL which was granted by the Legislature was to replace mutilated bank notes, not to change features or add new denomination.
Not stating what the Legislature would do, he said: “If you read the communication, they did not ask to change features on the money or print additional L$500 bank notes so I don’t know where that authority came from.”
The CBL is claiming that the decision is in keeping with its statutory mandate to at all times ensure that the integrity of the Liberian Dollar is uncompromisingly maintained.
Conflicting explanation
Recently, Finance Minister Boima Kamara who served as Deputy Governor for Economic Policy at the Central Bank of Liberia, told the Senate during confirmation hearing that the banknotes to be printed by the CBL will replace mutilated banknotes.
Kamara also said the new banknotes will not be infused in the economy but rather kept in the vault.
Said Kamara: “As Legislature, it is prudent. I say this because over the years, the bank has not printed money. It has collected mutilated notes so printing new notes will replace those that have been destroyed and not increase the amount of Liberian dollars on the market as people think.”
Contrary to former Deputy Governor Kamara’s comments before the Senate that newly printed banknotes will not be pumped on the market, the CBL announced that it will shortly introduce a new series of banknotes into the Liberian economy.
Total mutilated banknotes unknown
In the wake of the printing of new banknotes, the CBL is yet to give the total amount of damaged banknotes to be replaced through the printing of new banknotes.
One legislative source confided in FrontPageAfrica that the CBL earlier requested the go-ahead from the Legislature to print L$50 million.
The Legislature granted the CBL the mandate to print L$50 million but one lawmaker confided in FPA that the figure looks to have been increased with another lawmaker saying he heard a figure higher than the one the CBL requested.
The failure of the CBL to publicly announce the amount of new banknotes being printed is raising more concerns that the bank is operating the monetary policy of the country in secrecy.
The CBL has not also been able to explain how it intends to treat the issue of multiple colors for same denominations expected to be in circulation on the Liberian market. There is no indication that the new printed banknotes will replace all the existing ones on the market as this was not the request by the CBL to the National Legislature to have the existing currency replaced.
Political Loans deplete CBL Reserve?
FrontPageAfrica has gathered that the CBL loan scheme which led to millions of Liberian dollars being pumped in the economy led to the depletion of the bank’s reserve of Liberian dollars and the bank is using the issue of replacing mutilated banknotes to print huge amount of Liberian dollars to get the reserve intact.
Beginning 2013, the Central Bank under the governorship of Dr. J. Mills Jones pumped millions of Liberian dollars into the economy, giving loans to businesses; and up till date, the bank is yet to disclose the total amount of money given out in loans.
Repayment of these loans also remain unknown as former Governor Jones, who was considered “poverty Doctor” by some Liberians, is now a Presidential aspirant as he has accepted a petition to contest the Presidency in 2017.
One source indicated that the CBL is finding it difficult to recollect loans given to businesses because some of the loans were made without proper records.
Governor Jones, during his tenure, said he had no regret giving out loans to empower Liberians but the trend of his loan scheme which was characterized by printing of t-shirts with his picture and other elaborate programs in places he visited led to suspicion that he was using the loan program to push his political agenda.
Not long Jones tenure ended and he is now fully in politics and has accepted a petition from some Liberians to contest the presidency.
Many are watching to see what actions the legislature will take to ensure the CBL provides clearer information about the amount of damaged Liberian dollars to be replaced, how much new banknotes are being printed and why the change in features-color, size and how the newly printed banknotes will be used simultaneously along with the existing banknotes.
Article 34 (b) of the constitution gives the legislature the power to levy taxes, duties, imports, exercise and other revenues, to borrow money, issue currency, mint coins, and to make appropriations for the fiscal governance of the Republic, subject to the following qualifications: which includes; all revenue bills, whether subsidies, charges, imports, duties or taxes, and other financial bills, shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills.”
