Liberia, Citibank At Crossroads Amid Economic Uncertainty
Monrovia — In October 2003, Citibank in New York sent a communication to Liberia notifying the post-war nation of its decision to terminate its correspondent agreement with the Liberian Bank for Development & Investment (LBDI) and other banking institutions in the Country.
Report by Rodney D. Sieh, [email protected]
The notification which came into effect on January 2004 dealt a major blow to Liberians at home and abroad relying on making financial transactions and wiring monies to friends, families and loved ones.
It also came in the aftermath of the departure of former President Charles Ghankay Taylor, who was forced into exile.
The international community unsure about how much wealth Mr. Taylor had amassed sought to put the brakes on monies leaving and entering Liberia.
The Citibank’s decision was spurred by mounting concerns of money laundering and uncertainty in the governance structure of the country at the time.
The decision marked a turning point for Liberia and Citibank, which once served as the clearing house for Liberia before the establishment of the National Bank of Liberia which is now Central Bank of Liberia. It was one of the oldest banks in Liberia started as Bank of Monrovia.
In fact, Citibank was the only and last western bank to operate in Liberia.
Today, the bank does not have a presence in Liberia but several efforts have been made in recent years to fix the problem.
During his stint as Governor, Mr. J. Milton Weeks, held series of meetings with officials of Citibank, aimed at exploring areas of cooperation between the two institutions, particularly the establishment of corresponding relationships for the CBL and commercial banks in Liberia.
In one of those meetings, the Governor informed Citibank representatives that CBL needed the corresponding relationship to handle its transactions and manage its reserves. Citi’s representatives welcomed the meeting and informed the Executive Governor that such collaboration is worth pursuing. The Citi Bank officials offered to provide guidance that would help to attract corresponding relationship from international banks.
The on-and-off again relationship between Liberia and Citibank has presented numerous problems for Liberia.
This was evident exactly one year ago, when during the missing LD16 billion saga, the US Federal Reserve System reportedly put a freeze on transaction with the Central Bank of Liberia owing to the high-level of uncertainty surrounding the ongoing investigation into the missing billions controversy.
At issue at the time was the fact that several senior Central Bank of Liberia officials were under investigation in connection with the missing billions currency and have been barred from leaving the country. Many still are.
Key among those ordered not to travel are Mr. Milton A. Weeks, Former Executive Governor Office of the Executive Governor, who previously oversaw the overall Management of the Bank and Mr. Charles E. Sirleaf Deputy Governor, responsible for Finance, Banking and General Services Departments.
Sirleaf, the son of former President Ellen Johnson-Sirleaf, was the lead signature on the CBL’s account with the Feds thus, the Feds were said to be uncomfortable dealing with Liberia without a legitimate signatory.
FrontPageAfrica reported last October that several of Liberia’s stakeholders including the International Monetary Fund(IMF) raised red flags and concerns that those under investigation should not be involved in the day-to-day operations of the CBL, particularly regarding the US Federal Reserves.
President George Manneh Weah had established a Special Presidential Committee to probe the mysterious disappearance of L$16 billion from the vault of the Central Bank of Liberia (CBL) and the Monrovia City Court last week restricted the movement of 35 employees of the bank pending the outcome of the investigation.
Today, despite multiple reports on the missing money, the ongoing court saga involving Sirleaf, Weeks and others is said to be taking a toll on Liberia’s relationship with Citibank with multiple reports suggesting this week that the bank is pondering blocking transactions with Liberia as it did in October 2004 when former President Taylor went into exile.
The absence of a serious western bank, particular one from the US, regarded as Liberia’s stepfather, puts finances of many local consumers at risk.
When the civil war started in December 1989, many Liberians and expatriates lost the savings as bank vaults were looted and monies taken away.
Today, that lull remains a visible threat to Liberia.
A clarification prepared by the U.S. Embassies abroad for the U.S. Department of Commerce’s International Trade Administration makes it clear that only One of Liberia’s nine commercial banks, the International Bank (IB), is partially U.S-owned.
The clarification states: “The bank partners with Pan African Capital Group, Databank Group, and Trust Bank of the Gambia, and its correspondent banks are Ghana International Bank Plc, Bank of Beirut, MEAB, and BMCE Bank International. There is a limited number of correspondent banking relationships in Liberia. The U.S. Embassy in Monrovia is not aware of any specific country programs currently offered by ExIm Bank in Liberia. The Nigerian-owned United Bank for Africa (UBA) has branches in about 20 African countries, with subsidiaries in New York and London, while Ecobank operates in several African countries. Its headquarters, Ecobank Transnational, is located in Togo with subsidiaries in United Kingdom and France. Guaranty Trust Bank has subsidiaries in a few African countries and the United Kingdom. First International Bank (FIB) Liberia, with branches in four African countries, operates five MoneyGram and Western Union retail outlets in the country.”
Politically, Liberia’s ties with Citibank has had some complication. During the era of Samuel Kanyon Doe in the 1980’s, Sirleaf, who was an executive of Citibank, then a fiery force against President Doe, as a major opposition figure, went on trial on sedition charges.
The trial by military tribunal of Sirleaf, came two months before scheduled elections, which are to mark a return to civilian rule in Liberia. Doe charged that a speech given by Mrs. Johnson-Sirleaf in Philadelphia was ”detrimental to the peace and stability of the country.”
Sirleaf, 46 at the time, was Minister of Finance in Liberia at the time of the 1980 military coup. She later worked at the World Bank before becoming Citibank’s African representative.
Today, the tie binding Liberia and Citibank appears to have come full circle. In the middle of an economic uncertainty, the bank’s reported concerns could have serious implications for Liberia’s immediate political future and economic survival.