Liberia: House of Reps. Amends Central Bank Act, Expands Legislative Oversight on Bank’s Activities
Capitol Hill, Monrovia – At long last, the House of Representatives has voted to amend the Act establishing the Central Bank of Liberia (CBL).
Report by Gerald C. Koinyeneh, [email protected]
The Plenary took the decision on Tuesday, June 2, in its 32nd day sitting based on the advice of the House’s joint Committee on Banking and Currency and Judiciary.
The CBL was established on October 18, 1999 by an Act of the Legislature and it became functional in 2000, replacing the National Bank of Liberia (NBL).
The Mission and Objectives of the CBL is to maintain price stability and to ensure a sound banking and financial system, thereby contributing to sustainable economic development of the nation.
Portion of the act was amended in 2014. However, in the wake of controversies surrounding the L$16 billion newly printed banknotes and the US$25 million mop up scheme, the need for a holistic reform became more pressing.
The House of Representatives has squarely blamed the CBL authorities under the governorship of Milton Weeks for unilaterally printing additionally L$10.5 billion without seeking Legislative approval, something that may have prompted the decision to expand its legislative oversight on the activities of the bank.
Several changes made by the joint committee and approved by plenary includes the “Autonomy of the central Bank.”
Under this portion, the House called for CBL to be accountable to the Legislature through its [Legislature] oversight function.
The previous version read, “In pursuit of the objectives and the performance of its functions, the Central Bank shall be autonomous and accountable as provided for in this act.”
The amended version states that “In pursuit of the objectives and the performance of its functions, the Central Bank shall be autonomous and accountable as provided for in this Act. It shall, however, be accountable to the Legislature through its oversight function.”
Another area under the Act that was amended is the portion that gives the CBL the exclusive authority to issue Liberian dollars and bank notes.
The current Act authorizes the CBL to “have functional independence, operational autonomy, power and exclusive authority to issue Liberian dollars bank notes and coins” while the amended version gives the CBL the authority to have functional independence, operational autonomy, power and exclusive authority to issue Liberian dollars bank notes and coins, but is subject to constitutional requirement as exercised once every two years.
On the issuance of Liberian banknotes and coins, the House amended Act gives the CBL the sole authority to issue all Liberian Dollar banknotes and coins but subject to Article 34-d of the Constitution.
Article 34-d of the Constitution states that the Legislature shall have the sole authority “To levy taxes, duties, impost, excise and other revenues, to borrow money, issue currency, mint coins, and to make appropriations for the fiscal governance of the Republic…”
Meanwhile, the amended Act will now be forwarded to the Liberian Senate where that body will concur, reject or make amendments before approval.