Liberia: Controversy Looms over Recommendation to Print New Money
Monrovia – Debates surrounding the discussions on President George Manneh Weah’s request to the Legislature to grant him the power to print new banknotes are taking several twists from folks, who participated in the recently held National Economic Dialogue (NED), out of which allegedly came the suggestion that the President should do this.
Barely three days following the presentation of recommendations by Dr. Toga Gayewea McIntosh, who called the forum, the President sent a letter to the Senate request it to grant him the power to print new banknote and remove the old, two different banknotes that are presently in circulation. The government had said that its request for printing of new currency had derived from the “experts’” recommendations from NED.
On Wednesday, September 18, FrontPageAfrica had reported that a foreign, senior UN employee had confided in this newspaper that the UN and other development partners were concerned.
He stated that the Liberian government is saying that their request to the Senate for the printing of new banknotes emanated from the NED. That is, it was one of the propositions or items that the “experts” had elaborated on taking into accounts all the merits and demerits and suggested that it is prudent for the government to print a new banknote now.
“We sat throughout and took active parts in all the group discussions that were held in the recently held National Economic Dialogue. I didn’t hear nor did any of my other colleagues ever discuss the printing of new banknotes as one of the main economic issues brought before the body to be discussed. We are concerned; from where did it originate?” a senior United Nations’ foreign employee, who spoke with FrontPageAfrica on condition of anonymity, had expressed to this newspaper.
“At no time, I can say unequivocally, at no time was there any discussion about printing new currency. There was a lot of discussions both on the fiscal side and on the monetary side about our macro-economic environment challenges.”– Nathaniel Barnes, Moderator, Public Finance Mobilization and Management, National Economic Dialogue
He had disclosed that all of them – international partners, who were part of the NED, might issue a position statement mainly to debunk the assertion that they all sat in the NED and agreed that there is the need to now print new currency.
Following the publication, the World Bank offices in Monrovia and the United Nations Development Program (UNDP) dissociated themselves from the FrontPageAfrica report.
Nevertheless, one of the major players during the NED, former Finance Minister Milton Nathaniel Barnes, who firstly served as one of three “high level panelists,” along with a former finance minister of Ghana and a former senior government official of Sierra Leone, has categorically told this newspaper in an exclusive interview on Thursday, September 19, that he was going on the record to unequivocally say that at no time did the discussion of printing new currency ever come up in the group he moderated.
Before he had served as a moderator, Mr. Barnes and the two foreign guests had made expert presentations on three separate subjects on day one of the three-day NED forum, which was held at the Ministerial Complex in Congotown.
Barnes, who once served as a Finance Minister during former President Charles Taylor, had presented on Public Finance Mobilization and Management and it was the same group of experts in this area that he moderated on the rest of the days of the NED.
According to Mr. Barnes, on the panel on Public Finance Mobilization and Management, which he had served as mediator, were “experts”, including former Foreign Minister and former Finance Minister and former Budget Director Augustine Kpehe Ngafuan, the current Deputy Commissioner of the Liberian Revenue Authority (LRA), Madam Decontee King-Sackie, former Assistant Minister of Finance and Development Planning Mr. Alieu Nyei and a former Chairman of the Economic Department of the University of Liberia
“Within my group that I moderated, that I led and I chaired, there was no discussion on printing new money. How that got on the final manifesto or the final consensus document, I don’t understand.”– – Nathaniel Barnes, Moderator, Public Finance Mobilization and Management, National Economic Dialogue
“They all made presentations, very high level and expert presentations. Once those presentations were done, we then opened them up for discussion,” he said.
According to him, the way he moderated the discussions was he didn’t entertain questions but urged all the stakeholders, who wanted to say something that it should be statements or opinions, suggestions and or recommendations. “And for the remaining time, which was a full day and half, that was what happened,” he disclosed.
Mr. Barnes, who is a professor of Corporate Finance and Diplomacy and International Relations at the African Methodist Episcopal University (AMEU) Graduate School, further stated that after the stakeholders had made their comments, he and a small group of “experts” sat and crafted together the group’s presentation that was made to the plenary.
“At no time, I can say unequivocally, at no time was there any discussion about printing new currency. There was a lot of discussions both on the fiscal side and on the monetary side about our macro-economic environment challenges,” he stated.
According to him on the monetary side, a Deputy Central Bank Governor was there and he made representation. “We talked at length about some of the challenges. As a matter of fact as a part of our presentation to plenary, we had a separate chart that talks about what the market women were concerned about on foreign exchange and the exchange rates.
Mr. Barnes said the biggest one that was identified, in his opinion, was the existence of a parallel market in the monetary side.
“That means, according to what the experts that were there told us, the formal banking system, the Central Bank and commercial banks, control only under 30 percent of the money supply; more than 70 percent is controlled in a paralleled market that is run by groups.”
He named these groups to include the Fulas and Lebanese.
He further stated that the stakeholders pondered on why this is the case and two reasons came up.
“The fundamental issues that were addressed or problems that were pointed out were 1, no trust in the bank. People didn’t trust the banking system to deposit their monies and that they would get it upon demand.”
He added that the Central Bank was identified as one of the “weak links in the chains of macro-economic challenges.” He also stated that “de-dollarization” was one of the things pointed out, too.
“Nowhere did we talk about the possibility of introducing new currency,” he added.
He said that he is pretty sure that within this group he had moderated, “everyone realized the negative aspects or negative fallouts of printing additional new currency.”
Mr. Barnes, who also once served as Liberia’s Ambassador to the US, emphasized: “Within my group that I moderated, that I led and I chaired, there was no discussion on printing new money. How that got on the final manifesto or the final consensus document, I don’t understand.”
However, he stated: “I am told that it was brought up in plenary. But the way I look at it is that if such an important issue even if it were brought up in plenary, you would refer back to the experts to deliberate some more to come forth with some discussions on what they think should be done.”
Mr. Barnes clarified that he was going on the records because he has to “protect his own reputation and credibility. I was brought in to this scenario as an ‘expert.’ I have my credibility to protect. To say that the decision by the government to print new currency came out of that particular aspect of the forum is not accurate.”
While he was protecting his “own reputation”, he stated, however, that he was also protecting the reputations, too, of the other experts who were there but might not have the opportunity to do what he was doing.
“I can say unequivocally that there was absolutely no discussions or recommendations from the panel on Public Finance Mobilization and Management to print new currency.”
On what he suspects and not “believing in coincidences,” with what is now in place as it relates to the saga surrounding the new money printing, Mr. Barnes stated: “I don’t believe in coincidences; but for the government to say this and have in place a process for legislating and going forward to print the new currency, it leaves one to question.”
He wonders that just two or three days after the NED, the determination is made and the government is saying its request is based on a recommendation from the forum; adding: “They are suspects; what their motives are, I don’t know.”
However, this is how he said he looks at it: “Our three branches of government have the authority and power to do whatever they think is in the best interest of ‘we the people’.”
Responding to a scenario in which if the government were to call him to get his opinion about whether it was reap to print new money at this time, Mr. Barnes: “I will tell them absolutely not.”
His reasons for saying that now is not the right time to print new currency are psychological and monetary reasons.
“We are already having tremendous difficulties with our monetary challenges—there is the issue of fraud and missing money and mop up money, all of that.” According to him, one could perceive that this attempt to print new currency maybe an attempt to put a rug over all the past challenges that Liberians have and this is the psychological part of it.
“But from an economic prospective, our foreign exchange reserve is at an all-time low, investment is at an all-time low; investors are pulling out or are considering pulling out. The strength of any currency is determined by the strength of the economy. So to print new currency in this macro-economic environment, to me, is not wise. We don’t have a strong enough economy, our export earnings are down, investment is down, tax base is very, very narrow, how are we going to support, what kind of economic activities are we going to use to support the strength of this new currency we are going to print. I don’t think it’s a good idea.”
He thinks the government needs to focus on addressing the challenges it has. “For example, the issue of paralleled market. There are things that we recommended that the Central Bank can do that would address some of those issues,” he stated among other things.
For former Finance Minister Barnes, printing the new currency without taking into accounts some of these key issues, the government could incur the risk of walking down “a slippery and dangerous path of what Zimbabwe is ‘runaway inflation of 1000 percent’. We can’t afford that.”