Liberia: Finance Minister Samuel Tweah Wants Adequate Supply of Banknotes that Can Circulate Outside the Commercial Banks
Monrovia – While the Central Bank of Liberia (CBL) says the current liquidity crisis the country is faced with is as a result of inadequate supply of Liberian dollars banknotes, hence the need to print more banknotes, the Minister of Finance and Development Planning says printing of additional banknotes would not resolve the crisis.
The Finance Minister who appeared on the 50-50 talk-show on Wednesday said the shortage of the Liberian dollars is due to the lack of confidence in the commercial banks has caused Liberians to keep their money in their homes instead.
Minister Tweah said printing new banknotes would not solve the problem until confidence is regained in the bank.
“Printing money is not the solution. So even when we print new money the problem cannot be solved. And the reason why it cannot be solved is the quantity of money that is not coming back is staying out of the banks,” Minister Tweah said.
Minister Tweah to mitigate the situation, it would be appropriate to print an amount that can circulate adequately, despite people keeping their money in their houses, in order to restore confidence in the banking system.
“The new estimation is that we have to print a quantum that will allow for certain people to keep their money outside until confidence is restored in the banks,” Minister Tweah said.
According to him, there are three things the government needs to take into consideration before they can go ahead and print additional bank notes:
“Settle people will have to keep their money outside until confidence is restored then they will start bring it in –no matter what. So, you have to account for those people. Then you have to print a quantum that says these are the people who like to keep their money in the banks so that when they go for it they can get it. Then you have to print money for the reserve.”
According to the Minister, the Banking Committee of the Legislature working with the Central Bank is trying to get the calculation of the growth in the economy for the last two years.
“The quantity of money that can support Liberia today with all the expectations is that quantum that is going to be printed. It does not mean that when you print it you are going to put all outside. No, you do not do so. You put the amount that the economy needs outside and you regulate it,” Minister said.
He added, “U.S. alert on cash shortage was a serious impact on the government.”
Also addressing the U.S. Embassy alert on the shortage of cash Minister Tweah said the alert had a serious impact on the CDC-led government.
In December of last year, the United States Embassy in Monrovia warned its citizens and permanent residents visiting Liberia of the difficulties in getting cash from commercial banks.
The Embassy, in an alert to would-be travelers, noted that the banking sector in the country has been experiencing cash shortage over the last several months. It also noted that ATM machines often do not dispense money.
“As a consequence, it is difficult to obtain adequate cash supplies from ATMs and banks. There are no ATM facilities for public use at the U.S. Embassy,” the Embassy stated.
Addressing the issue of the US Embassy alert, the Minister of Finance said “It had a serious impact on the government. It is a difficult thing for the government and what they were saying bring your U.S. dollar because you may run out of cash.”
Also, there have been several public outcries about the last money that was printed by the Weah-led government. Four billion Liberian dollars was printed and there are questions about the whereabouts of the money in the amid of cash shortage.
When asked about the four billion dollars, Minister Tweah said all of the four billion Liberian dollars can be accounted for, adding the Central Bank is supervised by international experts.
“The four billion that was printed is accounted for and it was given to commercial banks and it pays government salary. Call LBDI, call ECO-Bank, call all of the commercial banks and ask how many dollars of this four billion the government gives you they will give you the answer,” Minister Tweah said.