Liberia: Pres. Weah Requests Legislature to Approve Printing of L$35bn New Local Banknotes
Monrovia – President George Weah has written the Legislature requesting the lawmakers to approve the printing of new Liberian banknotes in the tone of L$35 billion. The money, according to the President, will be infused into the economy when printed.
Should the Legislature approve the President’s request, the government of Liberia will need US$34 million to underwrite the cost of the printing the L$35 billion.
The President’s communication was sent to the Senate’s Committee on Banking and Currency.
Article 34 ‘D’ of the Liberian Constitution gives power to the Legislature 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.
There are clear indications that the government currently does not have an exact figure on the amount of money in circulation on the Liberian Economy.
A highly-placed source in the government told this newspaper on condition of anonymity that the government does not know the quantity of money in the hands of most individuals and business institutions, including GSM mobile money operators, forex bureau, as well as business people.
“People are hoarding money for speculative and precautionary reason,” he added.
According to this source, when the new money is printed, the government will then be able to know the nature of businesses with huge sums of Liberian dollars and those involved in money laundering.
“All of the money printed will not enter the market at once. When money is printed, it is placed in two vaults — reserve and operational. The one in operational is call money and the in reserve is not until it enters operational,” our source further disclosed.
Further supporting the prining of the new currency, another source in the government told FrontPageAfrica that the new currency will help reduce the rate of inflation as well as appreciate it against its US Dollar counterpart.
“The exercise will restore confidence in the monetary system and will be transparent and closely monitored by international experts. Once printed individual, business people will have to exchange the old notes at the CBL,” this source assured.
Design of New Money
It is not clear what the design of the new banknote will be. However, sometime early this year, a multi-colored new banknote bearing the face of President Weah, appeared on social media. Speculation began to abound that the Weah-led administration was in the offing of printing new banknotes.
When this banknote appeared online, it drew a lot of mixed reactions most of which were negative against the President and his administration.
In addition to the President’s face is very visible on this purported banknote, the ‘money’ that showed up online, had the series number “AA 0553444” and it is a 100$ banknote.
L$16.5 Million Missing
In 2016, the House of Representatives passed a resolution approving the printing of L$5 billion.
However, a Liberian government’s investigative report found that banknotes worth L$16.5 billion remained unaccounted for. The report blamed the Central Bank’s management for “deviating from conventional best practices.”
The Bank requested an additional L$10 billion printing but the request was denied by the Senate. However, the Bank still went ahead and engaged a company to print the additional banknotes.
“This raised the risk of unintended negative economic effect, including high inflation and the rapid depreciation of the Liberian dollar,” the report had said.
Kroll Associates Inc., (Kroll) a division of Duff & Phelps, LLC, chosen to conduct the audit of the Central Bank, said its investigation found no evidence of a large shipment of cash going missing as had been reported by local media. Instead, the new banknotes all arrived from a Swedish company, Crane Currency, but the central bank than failed to properly track what was done with them, the report said.
The independent report commissioned by the US Embassy in Monrovia provided a damning assessment of procedures within the country’s Central Bank as well as action taken by the Liberian government.
The 68-page report produced by business intelligence firm Kroll Associates Inc. goes into considerable detail to uncover the fate of the Liberian banknotes.
Reports about the disappearance of 138 million US dollars had sparked demonstrations in Liberia last year with hundreds of protesters taking to the streets and an online campaign using the hashtag #BringBackOurMoney.
It also risked marring the start of George Weah’s presidency – the scandal stretched from the end of former President Ellen Johnson Sirleaf’s final term in office to Weah’s installation in the Executive Mansion.
Kroll’s report, entitled “Project Fabre”, provides a forensic analysis of the approval for printing additional banknotes, the awarding of the contract to a Swedish firm called Crane AB, the shipping of the banknotes and the movement of the funds to and from the country’s central bank vaults.
Under former President Sirleaf, the banknotes were requested in two separate orders by the central bank, according to Kroll’s report. And although the first order was approved by the country’s parliament, the actual order had been placed by the central bank 11 days before it received the green light from the legislature.
Parliamentary approval was not sought for the second order of 10 billion Liberian dollars (89 million US dollars) by the Central Bank, and it placed the order with the Swedish banknote printers four weeks before a letter from a parliamentary clerk and secretary of the senate requesting that old banknotes be replaced with new ones.
Tendering for the banknotes was also circumvented by the Central Bank with Kroll’s report noting that “it appears that a competitive procurement process did not take place”.
Ministry of Information
Meanwhile the Minister of Information, Cultural Affairs and Tourism (MICAT), Lenn Eugene Nagbe, told the nation that to control and regulate the influx of the local currency in the Liberian economy, the Government of Liberia has resolved to printing new Liberian dollar banknotes.
Min. Nagbe made the statement Thursday, September 12 at the MICAT regular press briefing.
“Right now, we as a government don’t know how much Liberian dollars we have in the country and at the same time we do not know where it is kept; so we will change the money,” Nabge disclosed.
He said that it is not good for any government to run an economy without knowing the total liquidity of its currency on the market.
“So we will fix that, that’s monetary policy. The President has approved that and it be implemented. So, If you want to keep your money anywhere that’s your business, keep it but you will be affected.”
According to him, the government will follow the law in printing the new banknotes by going through the National legislature.
He, however, mentioned that the real reason behind Liberia’s present economic condition, is because of what he referred to as “historical economic antecedents.”