EDITORIAL: A Case of Too Little; Too Late at Liberia’s Central Bank
THE CENTRAL BANK of Liberia, in a statement this week sought to remove itself and Finance and Development Planning Minister, Mr. Samuel Tweah from responsibilities surrounding questions raised by both the Presidential Task Force and the Kroll Associates Inc., the firm hired by the United States embassy in Monrovia through the United States Aid for International Development(USAID); regarding the US$25 million, the bank, under the instruction of President George Manneh Weah, was told to use to mop-up excess Liberian Dollar liquidity to stabilize the exchange rate between the Liberian and United States Dollars.
A STATEMENT SIGNED by Governor Nathaniel Patray declared: “It is important to note that neither the Minister of Finance and Development Planning, as Chairman of the TEMT, Hon. Samuel D. Tweah, Jr. nor any member of the TEMT was ever involved with the direct mopping operations.”
THE BANK’S CLARIFICATION comes less than a week after the report from Kroll concluded the following:” Certain information provided by the CBL in respect of the movements of new banknotes into and out of the CBL vaults was not immediately available, contained inaccuracies and was incomplete.”
KROLL ALSO REPORTED THAT the CBL failed to provide the Legislature with details of the quantity and denominations of the new banknotes prior to the printing and shipping of new banknotes. “Notwithstanding the lack of Legislature approval, the CBL proceeded to enter into a contract with Crane AB on June 12, 2017 to print new banknotes totaling LRD 10.0 billion: four weeks prior to the letter dated July 19, 2017 from the Legislature.”
ADDITIONALLY, Kroll reported that it was not provided with adequate supporting documentation to demonstrate that the CBL adhered to its internal tendering policies in the procurement of the external banknote manufacturer Crane AB. “Despite CBL Management stating in Board of Governors meeting minutes that two other vendors also submitted proposals to print and supply new banknotes, Kroll has only been provided with limited email correspondence that does not demonstrate that either company had an opportunity to submit a formal proposal for services, and it appears that a competitive procurement process did not take place.”
EVEN IT ITS OWN explanation to Kroll, CBL, according to the investigators, explained that due to the urgency for new banknotes, it did not follow its own internal tendering policies for the procurement of Crane AB. “The explanation of urgency for new banknotes provided by CBL Management was inconsistent with letters sent several months prior to the initial procurement of Crane AB. A letter dated December 2015, sent by the then Executive Governor Joseph Mills Jones, and a letter dated February 2016, sent by the then Acting Executive Governor Charles Sirleaf, to the then President of Liberia, Ellen Johnson Sirleaf, set out that new banknotes were urgently required. Therefore, it is possible that the CBL could have commenced preparations to complete a competitive procurement process several months before Crane AB was Private and Confidential 10 contracted to print new banknotes in May 2016.”
KROLL REPORTED: “Under the direction of the Minister of Finance, the President’s Economic Management Team conducted a separate USD 25.0 million exercise to “mop-up” excess LRD banknotes with USD banknotes. At the time of Kroll’s review, this resulted in LRD 2.3 billion (USD 15.0 million)3 being purchased by the CBL from local businesses and foreign exchange bureaus, in an attempt to address the depreciation of the Liberian Dollar. This action was undertaken by the CBL without a clearly documented strategy. n Kroll’s independent counts of the physical cash balances in each of the CBL’s three operational vaults could not be reconciled with the CBL’s corresponding financial accounting records.”
THE KROLL FINDING was clear that the discrepancies uncovered warranted further understanding which is why we find it seriously troubling that the CBL would be going all out trying to vindicate itself and Minister Tweah when key figures from the same report have been arrested, charged and languishing in prison without been giving the opportunity to explain their side through press releases and news conferences as Minister Tweah and the CBL have been doing over the past few days.
THE CBL’S STATEMENT which offered little in terms of an actual breakdown, contradicts Minister Tweah’s own assertions made last November when he revealed in an interview with ELBC/LNTV that passing the US$25 million through the commercial banks would have made no impact and therefore took it upon himself to distribute the money through money changers. “The goal at that point of the President’s mandate was to mop up Liberian dollars directly from the market, not to take Liberian dollars that are in the banks… so if we want to take one billion [Liberian] dollars from Logan Town, New Kru Town or Mamba Point, you don’t go to the bank account and take it from there, it’s on paper; so, you go to someone in New Kru Town who has the money and can sell his Liberian dollars to you. This was the direct mopping that happened, this was why the rate moved from 163 and it came down to 152,” the minister said.
AT THE TIME, the minister failed to disclose the criteria used for the disbursement.
IN ITS STATEMENT THIS WEEK, the CBL now says, that the TEMT mandated the CBL to use the direct mopping strategy based on the following reasons: “That over ninety percent of currency in the economy is outside the banking system. Therefore, using the banking system would not yield the desired results.
ACCORDING TO THE CBL, the mopping up exercise targeted three groups: major importers, small businesses and licensed foreign exchange bureaus. All information on the operations – including detailed information regarding the names of the buyers, the types of businesses, their addresses, the transaction volumes and transaction rates were meticulously recorded, and the information was provided in full to the TEMT. Also, a detailed report was submitted to the Leadership of the National Legislature.
THE CBL ALSO notes that the intervention which began on July 17, 2018 and ended October 30, 2018, saw a total of US$17 million used for intervention, broken down as follows: US$15 million was sold to a major petroleum importer in exchange for L$313,141, 800.00 million through a steady supply of fuel to the Liberian market and prevented economic disruption that a fuel shortage would have caused.
THE BANK ADDED that due to complaints from commercial banks and customers during the Christmas seasons that they could not withdraw Liberian dollar from the banks, the TEMT authorized the CBL to give L$1.3 billion of the sterilized L$2,303,363,898 billion to the commercial banks to meet the Liberian dollar demand for the Christmas season. The CBL gave this money to the commercial banks, and records of these transactions are available.
WE FIND IT A BIT DISTURBING that in all of its explanation, the CBL failed to address the burning question on every Liberian and international stakeholders’ mind: Why didn’t the bank provide all this information when Kroll requested?
SECONDLY, why did the CBL fail to explain all along why has there been a shortage of newly-minted Liberian banknotes on the market since the Weah-led administration came to office?
MORE IMPORTANTLY, why has the CBL repeatedly failed to exercise transparency and accountability in all this, choosing repeatedly to explain itself after the fact of this crucial matter that has been dogging Liberia for more than a year?
WE CONTINUE TO SAY repeatedly here that Liberia has been through so much in its 171 years of independence. Too many people have been killed, thousands have been forced into exile and countless others maimed and forgotten.
WE OWE IT TO those who have struggled and lost their lives so that those alive today can live; we owe it to ourselves as a nation to continue to ask questions from our leaders.
THIS IS THE ONLY WAY we can stop our leaders from perennially falling prey to the trappings of power and allow Liberia to end the corruption impunity that has been dogging Africa’s oldest republic for such a long time.
MINISTER TWEAH and the CBL must do right by Liberia by filling the loopholes and unanswered questions left by Kroll and the Presidential Task Force in their conclusions.
IN ORDER FOR PRESIDENT Weah to succeed, those around him must encourage him to be non-selective in the process of bringing all those responsible and cited by both reports to book. LIBERIA IS AT A CROSSROAD and no one person must be allowed to turn the clock on an ugly chapter that continues to haunt the country and keep it from progressing and realizing its full potential.