LIBERIA: Central Bank Must Prioritize Transparency, Accountability Before Printing Any New Banknotes
THE CENTRAL BANK OF LIBERIA appears to be obsessed with printing money without providing an explanation as to why.
COMING OFF the heels of two major scandals, the US$25 million infusion and the LD16 billion missing money saga, the CBL is embarking on yet another attempt to print more local currency.
ON TUESDAY, the Executive Governor of the Central Bank of Liberia (CBL), Hon. J. Aloysius Tarlue, Jr., has said that unless additional Liberian dollar banknotes are printed, the country will continue to experience a rapid increase in the mutilation of existing banknotes. The lifespan of the enhanced and legacy banknotes, the CBL Executive Governor noted is three years, hence the need to print additional banknotes.
GOVERNOR TARLUE’S assertions come as Liberians are yet to see any of the LD4 billion which came into the country recently in circulation.
IN JULY, the CBL announced the secure arrival of additional L$4 billion banknotes to ease the liquidity pressures that the Liberian economy had been faced with recently.
IN A RELEASE issued by the CBL on Tuesday, July 7, the bank said the additional banknotes were safely secured in the vaults of the CBL Headquarters on July 7, 2020.
THE RELEASE further stated that the CBL in collaboration with Kroll, will work over the coming days to undertake a full technical validation process of the new banknotes to ensure they comply with the contractual specifications.
NOW, MONTHS LATER, the bank is putting out feelers to print more money, even though the bills brought in July in LD500 denominations, is rarely seen in the public, in the banks, in the markets or in businesses centers across the country.
YET, GOVERNOR TARLUE, speaking recently during an Executive Session at the House of Representatives, declared that the “central banks in many countries have their own currency in surplus to timely replace mutilated banknotes, but Liberia doesn’t. The CBL would therefore work with other relevant authorities of the Government to sustainably handle this problem.”
ACCORDING TO THE CBL Governor, the L$4-billion banknotes recently secured by the CBL in July was only intended to ease the liquidity pressure for the Independence festive season, henceforth, inadequate to address future liquidity needs of the country. The Governor said about 37-percent have been infused into the economy, mainly through commercial banks, with value amounting to L$1.5 billion dollars.
WHILE NO ONE WANTS to see the business climate deteriorate any further, it is important for the CBL to approach any issue of printing new money with some degree of transparency and accountability.
THE CBL should first explain to the public why is that the LD 500 banknotes cannot be found anywhere on the streets, except on the campaign trails when ruling party candidates in the December 8, 2020 Senatorial Midterm elections are trying to woo voters?
WHY IS IT that Liberians continue to be enslaved into using old, dilapidated banknotes which should have been withdrawn from circulation and replaced with new banknotes?
WHY IS IT that the CBL is not being transparent when it comes to the issue of how much of the LD4 billion is in circulation and why are commercial banks still giving consumers old banknotes?
ACCORDING TO GOVERNOR Tarlue the CBL met with commercial banks recently to inquire about complaints as to why customers are not being served the L$500.00 denomination even though the CBL had made available the banknotes. “The CBL will continue to gradually make available the remaining banknotes consistent with cash demands largely by commercial banks,” Executive Governor Tarlue assured the lawmakers.
THE GOVERNOR’S EXPLANATION as to why only series of banknotes was printed, is that the L$500.00 denomination was selected and printed due to budgetary constraints. According to Governor Tarlue, the cost for printing the L$500.00 banknotes is lower than the printing of smaller denominations.
GOVERNOR TARLUE EXPLAINED to members of the House that the Bank, through its Board of Governors, is exerting all efforts to sustainably address the liquidity situation and implored the House to work with the CBL in expediting the procurement process that would lead to the printing of additional denomination of banknotes.
WHERE WE HAVE A PROBLEM is the issue of availability of the printed local currency.
WHEN WILL THE CBL remove the dilapidated local banknotes from circulation? When will Liberians be proud to hold their currency in their hands?
THE UNITED STATES AID FOR INTERNAITONAL DEVELOPMENT(USAID) must also tread carefully here in putting its name behind a process that appears to be flawed, especially when monies are printed, and Liberians cannot see them.
MORE IMPORTANTLY, THE IMF AND THE WORLD BANK as well as the national legislature, must ensure that the CBL and the government prioritize accountability and transparency before being given a greenlight to print more new local currency.