Liberia: Government Bargaining with Lawmakers for Major Salary Cut
MONROVIA – Lawmakers in Liberia are expected to make an ultimate sacrifice by agreeing to a massive salary slash from a whopping US$15,000 to a maximum of US$6,000 as part of recommendations from the International Monetary Fund (IMF) to reduce the country’s wage bill amid a crippled economy. However, the question remains, is this an undertaking they are willing to take?
The wage bill accounted for 65 percent (US$330 million) of FY 2018/2019 which stood at US$570 million.
For IMF, which was invited by President George Weah to help resuscitate the economy, reducing the wage bill is crucial as the Government embarks on a process of adopting a credible and executable budget for Fiscal Year 2019/2020 and beyond.
The 2019/20 budget amounts to a total of US$532,906,966, which is a 7 percent or US$37.2 million reduction over the FY2018/19 budget. This is the first time the MFDP submitted a proposed budget with a total less than the total of the previous year’s budget. The new wage bill for 2019/2020 will now be 297 million.
Why the Wage Bill Harmonization
The wage bill harmonization exercise undertaken by the Weah-led administration to some financial experts is the most significant public financial management reform he has seen in Liberia over the past 14 years.
“This provides confidence and assurance that budget support and external existence are not going to be used to pay lucrative salaries as was the case under the previous Government,” a financial expert told FrontPageAfrica on the basis of anonymity.
He added, “It is real steps like these that can attract more resources to the country, but we like to see this harmonization exercise extended to the national legislature, where we believe wage creep has been rampant”.
The wage harmonization program entailed fitting all Government workers into a pay grade with seven steps. The grade covers all skillsets in Government as developed by the Civil Service Authority. The harmonization program abolished the Basic and General Allowance salary structures of the previous years, giving all government workers one pay. Where workers were previously paid with wide discrepancies, all workers under the harmonized bill will now be paid more equitably, with people of the same qualification and experience making about the same amount or in the same range.
Sources say some 14,000 Government workers, among them police, army and immigration folks, are getting a pay increase under the harmonization scheme. Some 27,000 workers will see no change in their compensation.
A Bill for Slash to Surface
Recently, Representative Moses Acarous Gray of the ruling Coalition for Democratic Change (CDC) told reporters in a press conference that he would be submitting a bill seeking a reduction of lawmakers’ salaries.
He said the proposed reduction would help government generate more revenue for projects that would directly impact ordinary Liberians.
Pundits believe that Rep. Gray, as a staunch member of the ruling establishment, would be fronting for the Executing by sponsoring the passage of the bill when presented to Plenary.
Draft Budget Hostage at House
The House Committee on Ways, Means, Finance & Development Planning is yet to call a meeting on the draft budget which was submitted almost fortnight ago.
As per tradition, the Legislature begins hearings immediately the next working day after the budget had been submitted to it by the executive and the hearings begin into the revenue component.
FrontPageAfrica has learned that there are unresolved issues between the Executive and Legislature which is stalling the process.
The lawmakers, FrontPageAfrica, has gathered that lawmakers are concerned about the proposed cuts to their salaries and benefits. They are also demanding that arrears and benefits owed them for the past four months be paid before they can begin the process of conducting hearings into a new draft budget.
“The lawmakers do not want salary cuts. They are prepared to give up benefits including scholarships, medical, and other allowances. Many lawmakers have loans pegged to their salaries,” a lawmaker told FrontPageAfrica.
A Fair Bargain?
The Executive is reportedly engaged with the leadership of the Legislature for a bargain that might lead to the acceptance of the slash of their salaries. FrontPageAfrica has reliably learned that the Executive is offering to assume responsibility for the car loans owed by the lawmakers as a bargain for the acceptance of the pay cut.
In 2016, FrontPageAfrica obtained a letter that indicated that all 30 members of the Senate at the time acknowledged breaching the Public Procurement & Concessions Commission regulations regarding the purchase of some 30 vehicles. They were asking President Ellen Johnson Sirleaf at the time to intervene on their behalf to pay the vendors.
FrontPageAfrica learned that the Senators individually took it upon themselves to take the vehicles on credit from a local vehicle importer, GBK Motors on the condition that they would pay when the budget was passed at the time. However, when the Senators reneged on their pledge to pay and the vendors came knocking on their doors, the Senators reportedly appealed to the President to join them in breaking the law by breaching the PPCC regulations.