Liberia: Finance Minister Wants Authority to Print New Banknotes Taken from the Legislature
MONROVIA – Finance and Development Planning Minister, Samuel Tweah, says politicizing of monetary issues in Liberia is leading to the “erosion of confidence in the banking system”.
Report by Lennart Dodoo, [email protected]
Speaking to the BBC Focus on Africa on Monday, Minister Tweah said Liberia struggled with improvements on its monetary policy under the International Monetary Fund benchmarks because in December 2019, the government needed to provide the commercial banks to pay salaries and there was no way the government could have done so while at the same time meeting the net international reserve targets.
“On that score, it made the monetary situation look weaker but not because they’re not doing something great – they’re doing great but the circumstance and the politics of it makes it difficult to abide by the IMF targets – so going forward you’re going to see a serious improvement, particularly with the printing of new currency,” Min. Tweah said.
“The authority to print money rests with the national legislature, it doesn’t rest with the President. This is strange, Liberia I’m told by experts in this area, we are the only country that requires approval from the national legislature and that’s the problem and this is contributing to some of the confidence issues. The politicization of monetary issues would lead to the erosion of confidence in the banking system.”– Samuel Tweah, Minister of Finance and Development Planning
He added, “Most of the confidence [crisis] in the banking is because people are not bringing their money to the bank. They’re not bringing their money to the bank not because their money is missing somewhere, it’s because they don’t have the confidence that they’re going to receive the amount they request for.”
Min. Tweah dodged taking the responsibility for the shortage of Liberian dollar banknotes, stating that the authority to print new banknotes rests with the Legislature and not the President. “The authority to print money rests with the national legislature, it doesn’t rest with the President. This is strange, Liberia I’m told by experts in this area, we are the only country that requires approval from the national legislature and that’s the problem and this is contributing to some of the confidence issues. The politicization of monetary issues would lead to the erosion of confidence in the banking system.”
The Finance Minister said due to the politics over the last two years, no serious amount of money has been printed, citing a hold on to printing of new banknotes when Kroll was investigation the alleged L$16 billion.
He said he looks forward to the Legislature, upon their return from their annual break in January, acting to end the politicization of monetary policy. This means, he expects the legislature to strip itself of the sole authority of granting the Central Bank of Liberia permission to print new banknotes before it is printed.
The new Central Bank Act gives the CBL more independence and the autonomy to decide the country’s monetary policy. This, he said, would mitigate some of the confidence crisis being experienced in the banking sector.
He bragged that the IMF’s US$48.86 million concessional loan to Liberia suggests that “microeconomics fundamentals for Liberia is overwhelmingly positive.” He added, “Those fundamentals are strong, outlook on growth looks positive for next year and all these results are happening because of strong fiscal policy, monetary policy measures and governance improvements the government has made so far.”
IMF Extended Credit Facility Arrangement aims at restoring macroeconomic stability, providing a foundation for sustainable inclusive growth, and addressing weaknesses in governance.