Economist Jeremiah Sokan Dissects Liberia’s Economic Challenges, Proffers Recommendations for Growth
Monrovia – Economist Jeremiah Sokan has laid out several recommendations for the Weah-led government aimed at resuscitating Liberia’s rapidly dwindling economy.
According to Mr. Sokan, to revitalize the economy, President Weah should consider setting up three taskforces, including the taskforce on economic revitalization, taskforce on foreign engagements and international corporation and a taskforce on peace, security and reform.
The primary role of the team on economic revitalization, he said is to engage IMF and World Bank on support to revive the economy through a possible bail out.
The taskforce on Foreign Engagements and International Corporation’s key responsibilities will aim at strengthening the president’s network with key regional counterparts and major economies through states visits and other bilateral engagements; while the primary role of the Peace, Security and Reform taskforce is to engage matters relating to internal peace.
On the monetary policy front, Sokan welcomed the President’s statements on the constitution of the Board of Directors and revamping of Central Bank’s administration. “Professionalizing the institution is a right step in the right direction to the credible image of this all-important entity,” he said.
In addition, he called on the President to beef up the capacity of the Technical Economic Management Team by adding professionals and experts in Economics, Finance and Accounting to diagnose the real triggers of the current inflation.
The team, according to him, should begin robust engagements with the IMF and Work Bank on the scope of work at hand and establish within one week, the volume or quantity of actual monies in circulation (M2): cash, checks, savings accounts, money markets mutual funds, loans, credit cards bonds.
In addition, he called for the establishment of the volume of money that is really needed to stay in circulation to run the economy, finding out the difference between the current money in circulation and the amount the economy needs to run normally; and stating why citizens do not trust the banking system enough to save but use the black market.
Mr. Sokan made the comments when he issued a paper covering wide range of economic issues as well as other national issues of concern.
He stated that the health of the national economy drives development, however, the Liberian economy, has over the years been plagued by unaddressed systematic and structural challenges, he said.
He alleged that past governments simply left key problems un-tackled and engaged in peripheral fixes to macroeconomic issues.
“Past administrations simply ‘kicked the can down the road’ on monetary policy,” he stated.
According to him, Liberia faces a contractionary monetary issue leading to high inflation rate which is causing high merchandise prices on the market and rapid depreciation of the Liberian dollars against the United States dollars.
Further outlining the economic woes, Mr. Sokan stated, “Local currency perceived value is in a free fall, purchasing power of ordinary citizen is reduced, dwindling economy with no new Foreign Direct Investment and a Shrinking tax base as a result of mass layoffs of employees. Rumors of protest with propensity of sending a message of unsafe, unstable Country, which could exacerbate economic situation from bad to worse.”
He further noted that Liberia’s economy faces complex systematic and structural challenges that will require time to address major problems.
According to him, the Weah-led Government is very young – 15 months old – and inherited bad economy from the 2014 Ebola Crisis.
In his analysis, he the banking Sector in Liberia is vastly undeveloped and faces numerous challenges that need to be addressed and called on the Central Bank of Liberia to put in place measures that will make it creditable and attractive to customers.
“The key issues are most of the monies in circulation are not in the banking system. Two currencies, Liberian and US dollar floating in the hands of ordinary people on a daily basis, creating unnecessary exchange rate debate daily.”
June 7 Protest
Touching on the June 7 planned protest, Mr. Sokan called on the organizers and all Liberians to be tolerant, non-provocative assemble peacefully.
He noted that although he is not supporting the protest, citizens are entitled to assemble peacefully to petition their leaders as enshrined in Article 17 of the Constitution.