Remain Open’ to IMF Recommendations, US Ambassador to Liberia Urges Weah Government
Monrovia – Ambassador Christine Elder, the United States Ambassador accredited to Liberia is urging President George Manneh Weah and his government to remain open to recommendations of the International Monetary Fund (IMF) in order to pave the way for economic productivity and prosperity for Liberia.
Report by Rodney D. Sieh, [email protected]
Speaking at ceremonies marking the 243rd Anniversary of the Independence of the United States of America Wednesday, the US envoy while applauding President Weah for opening discussions with the international monetary body regarding measures that could restore confidence in the economy and set the stage for growth ahead, said heeding the recommendations to Liberia is key. “I hope that you, the Liberian government, and the Liberian people remain open to what the IMF recommends so that Liberia can lay the groundwork for future economic productivity and prosperity.”
IMF: Productive Spending Crowded Out by Wage Bill
An IMF team led by Mika Saito, visited Monrovia from February 25-March 8 to conduct discussions for the 2019 Article IV Consultation with Liberia and held discussions with President Weah, Speaker of the House of Representatives Bhofal Chambers, Minister of Finance and Development Planning Samuel Tweah, Governor of the Central Bank of Liberia Nathaniel Patray, Minister of Commerce and Industry Professor Wilson Tarpeh, other senior government officials, private sector representatives, and development partners.
The team reported that Macroeconomic stability has proven elusive despite improved revenue collection in the first half of FY2019, while the fiscal stance has loosened significantly.
The team noted that productive spending is being crowded out by a wage bill, including discretionary allowances, that totals about two-thirds of government-funded expenditure. “This is not a new issue—it has been a characteristic of the Liberian economy for a number of years. However, as grants and other external assistance decline, this is no longer a tenable situation. Freeing up resources in an equitable manner for pro-poor development will likely require effective actions to reduce the share of government resources devoted to this budget item.”
The IMF team said improving the efficiency of government spending will be key and stressed that policies should aim at improving the monitoring, accountability, and transparency of spending. “Intensifying actions to improve governance and fight corruption, including through rigorous adherence to existing procurement rules, would also be effective.”
The mission also recommended that the authorities pursue the envisaged reforms, including excise tax, tax exemptions, and compliance. “Increased uncertainty and volatility in the external environment argue for further measures to safeguarding the foreign exchange reserves of the central bank. The mission noted that creation of a well-functioning monetary policy framework would reduce the need for foreign exchange intervention. Acceptance of greater exchange rate flexibility would help preserve reserve stocks and help absorb external shocks. In addition, reducing the central bank’s operational deficit would be vital.”
On Wednesday, Ambassador Elder suggested that Liberia develop a private sector capable of sustaining the livelihoods of the Liberian people. “Increased investment—including foreign investment—is essential for growth, but in order to make Liberia a competitive location for investment, the executive and legislative branches of government must work together to stabilize the economy and lower the barriers to doing business here.”
Ambassador Elders noted that over the course of her stay in Liberia, the Liberian people have repeatedly impressed her with their courage, dedication, and resilience. “I arrived in Monrovia weeks after Liberia was declared “Ebola-free” in 2016 and was inspired by the resolve of Liberians determined to emerge stronger after the epidemic.”
Today, however she added the challenges are more profound. “There is no question, that today, Liberia faces profound challenges, but in 2017, the Liberian people overwhelmingly placed their trust in you to lead them. Throughout your life and through the present day, you have extended a hand to those who disagreed with you, and you have protected their right to do so.”
‘Time is Now’
The envoy added: “As Liberia continues to strengthen the economic, judicial, and political institutions essential for a brighter future, the determination and perseverance Liberia summoned to end war, defeat Ebola, and bring about a peaceful transition of power are now the foundation of this nation. With those complex challenges successfully overcome, Liberia must seize this day to achieve long-term political and economic stability. The time is now to reverse corruption and its corrosive and contagious effects. The time is now to strengthen an economy that provides opportunities in more sectors and where open and transparent competition rules the day. The time is now to give women and girls a life free of abuse and an equal chance to apply their talents and bring solutions to their community’s and the nation’s challenges. The time is now to offer ideas on how to improve Liberia’s economic situation, not solely criticize or exacerbate the problems.”
The envoy said as Liberia charts its journey to self-reliance, it is imperative that we recognize the extraordinary importance of civil society in helping the country to achieve a lasting peace. “Liberia’s vibrant media, experienced NGOs, and dedicated faith-based organizations have played—and continue to play—a central role in promoting accountability, supporting conflict resolution, and fostering Liberia’s democracy.”
The ambassador’s comments come as the donor community appear to be frustrated with irregular withdrawals of their funding under a so-called borrowed initiative.
The letter, which is purportedly signed by eight diplomats representing the European Delegation to Liberia, the governments of the United States of America, France, Germany, Ireland, Japan, Norway, Sweden and United Kingdom of Great Britain and Northern Ireland, told the Liberian Leader that they are “apprehensive about the potential negative impact that such conduct may have on assistance level to Liberia overall.” They want the monies that have illegally been removed from the Central Bank of Liberia and used on projects not agreed on be “restored without delay and such unacceptable practices cease immediately.”
On Tuesday, the Economy Community of West African States (ECOWAS), through its Special Representative to Liberia Ambassador Babatunde Olaarwaju Ajisoo also raised alarm and cautioned Liberia to be careful as to how the country manages funding from the International Community.
Addressing a workshop at the TM Mall in Monrovia, Ambassador Ajisoo while not specifically suggesting that donor funds have been mismanaged, said the international community has invested a lot in Liberia and other countries that are benefiting funding. He said ECOWAS is watching as to how funding sent to Liberia is managed by the Liberian government. “We are watching you. No one will spend their money and expect them not to monitored it, every funding ECOWAS and the International Community put in Liberia is being monitored, we are watching,” he warned.
July 4th – 57 Days Early
This year’s US Independence Day anniversary is being celebrated 57 days earlier in Liberia. Ambassador explained that it is not unusual for US embassies to celebrate earlier than the Fourth of July.
“As most of you know, observation of America’s Independence Day normally occurs on the fourth of July, so today we are 57 days ahead of schedule. There have been many colorful theories as to why this is happening. Actually, many U.S. Embassies around the world host these annual celebrations outside of July for a variety of reasons including to accommodate extreme weather, out of respect for elections or religious or local holidays, or the coincidence of hosting important visitors. This year in Saudi Arabia, our Embassy hosted July 4th in February, in Egypt it was in March, and in Pakistan it was in April, so in Monrovia today, at least we are closer to the mark than some of our colleagues in other places. For me, this scheduling decision was based on the realization that many members of my senior leadership team – your friends and partners – will conclude their tours in Liberia in the coming weeks, some before July 4, and I wanted to thank them for representing the American people with such distinction.”
Speculations and conspiracy theories have in the air for weeks since the embassy began sending out invitations, with some suggesting that the July 4th was being brought forward due to the upcoming June 7 Save the State Protest.