Liberia: Finance Minister Samuel Tweah Explains Why Liberia’s Entry Into The International Monetary Fund Program Was A No-Brainer
Monrovia – in the midst of a challenging time for the Liberian economy, coupled with rising prices of commodities and inflation, Finance and Economic Planning Minister Samuel Tweah has defended the Liberian government’s quest to enter the Extended Credit Facility of the International Monetary Fund (IMF), insisting in a national simulcast interview Monday that the government simply has no choice.
“The Timing question is we don’t have a choice because we’re at a point where we do not have a margin now. This program is going to get us out of the woods. But it requires the sacrifice of all Liberians. As an economist, my instincts tell me that this is the best thing we need to do. So, forget about the IMF – no country should spend money that it does not have, no human being should spend money that they do not have. So, what this says is – that – live within your means, don’t borrow unless necessary. So, that’s what the program is.”
Former Auditor General of Liberia Mr. John Morlu recently expressed his opposition to the IMF program, describing it as a receivership and form of chapter 11 bankruptcy. “The government of Liberia is entering into a program to be told what to do and be monitored for performance so that it can meet its obligations to debtors and its shareholders (Liberians),” the AG said.
Addressing the issue of the wage bill, the IMF has been pressing the government to curb, Minister Tweah, said Monday that
The state of the Liberian economy can be described as challenging. The numbers are showing that it is challenging and I think what we are trying to do with the program is to address the macro situation. Because the macro situation has to be stable – even when we talk about investment and what have you, macro stability sends a good signal. Macro stability means that the government or the fiscal side is not contributing to inflation. So, when a government borrows or a government spends beyond its means that adds to inflation pressure.
The inflation pressure we face today starts with large influx of Liberian dollars – beginning 27th April at the time when US dollar was leaving the country
What the harmonization did was bring some equity and so technically, it provided more income for some 15,000 workers – and think about the immigration person standing at the border, think about a supplementary school teacher, harmonization puts money in the pockets of those people. How? Because Liberians who are making higher, any Liberian who makes 10,000 or above
“The Timing question is we don’t have a choice because we’re at a point where we do not have a margin now. This program is going to get us out of the woods. But it requires the sacrifice of all Liberians. As an economist, my instincts tell me that that this is the best thing we need to do. So, forget about the IMF – no country should spend money that it does not have, no human being should spend money that they do not have. So, what this says is – that – live within your means, don’t borrow unless necessary. So, that’s what the program is.”– Mr. Samuel D. Tweah, Minister of Finance & Development Planning
A guy who gives his money liberally is always broke. We have been running a government liberally. We need to move to the stingy guy. This stingy guy will generate more resources; take the money generated to invest in things that will grow the economy. We began by saying, look this program is going on the back of 74,000 Liberians who are civil servants. Four million Liberians are not affected by the salary payments.
So, this program, the 74,000 Liberians, let’s bring them back in the net through roads, through agriculture, through better schools, the number of girl children that are not in school, we need to make sure they are not in school because of school feeding issues, they are not in school because of all kinds of issues. We need to address them and get them in school, so the country looks like it’s doing well. So, to do these things, we have to give the ministry of education money.
That’s why the people say they are tracking how much money we’re giving education. How can you give Ministry of Education money when all the money is going on something that is not necessary, so we are cutting on all these things? So, the program is saying slow down, fix your things.
And let me tell you the benefits, the benefit is that in year by June, everybody will be rushing to see Liberia’s numbers. Let me tell you, as soon as June closes to July, the entire globe is going to be looking at Liberia’s fiscal numbers and when they come up, then everyone will say, Liberia’s heading somewhere – it looks like I can give Liberia a second chance – if the fundamentals are right. And what happens, this reform we are doing will make investors more open to come to Liberia..”