Liberia: House Votes to Include L$1,000 Bill in Proposed New Family Banknotes
Capitol Hill, Monrovia – The House of Representatives has approved the inclusion of L$1000 bill in the proposed new family of banknotes, backpedaling its previous decision in nullifying the Central Bank of Liberia’s request.
The House also reversed its decision earlier to allow the printing of new money in 2023, the year in which the presidential and legislative elections will be held.
These amendments were contained in a Joint Resolution adopted by the House of Representatives authorizing the printing of L$48,734,000,000.
The joint resolution was crafted by a conference committee of the National Legislature, which comprised members of both Houses of Representatives and Senate.
The Committed was set up to harmonize the joint resolution authorizing the Central Bank of Liberia (CBL) to print the new family of banknotes.
What’s In the Joint Resolution?
The resolution called for the denomination of banknotes to be printed in L$20, L$50, L$100, L$500 and L$1,000, while the denominations to be minted in coins shall be L$5 and L$10.
It mandated the CBL to print the banknotes and mint the coins in 2021, 2022 and 2024, thus omitting 2023 because it is an election year.
Standards for Printing
In the Joint Resolution, the Legislature called on the CBL to put in place adequate logistics and governance arrangements, including appropriate procedures, internal controls, compliance functions, to ensure the integrity and transparency of the currency reform process.
The CBL is also requested to draw up a detailed implementation plan that is commensurate with its implementation capacities, and that the CBL shall ensure effective internal and external financial and system audit as well as risk mitigating measures to safeguard the reform process and ensure full accountability.
The Legislature in the Joint Resolution also mandated the CBL to expedite the currency reform process while respecting capacity limits to implement it safely and while ensuring the economy is supplied with adequate liquidity throughout the operation.
It further wants the CBL to arrange with the printers an appropriate payment plan; considering the budget of the bank and financing gap of such plan shall be discussed and concluded through a formalized arrangement with the MFDP.
The resolution also called for the Legislature to ensure that the financing gap for the full replacement in excess of the amount allocated in the CBL’s budget for printing of banknotes and minting of coins is made through budgetary appropriation. To execute this clause, the lawmakers called on the CBL and the Ministry of Finance and Development Planning (MFDP) to execute appropriate memorandum of understanding, and given the national emergency of the need for Liberian dollar currency, the CBL shall use the appropriate procurement procedures in keeping with its procurement policy.
The CBL, in its request to print new family of banknotes, said that due to the International Monetary Fund (IMF) Extended Credit Facility (ECF) program benchmarks, it can only provide US$21 million cumulatively in three years as part of printing cost and requested the Government of Liberia to fund the financing gap of US$24, 522, 000 plus additional US$5 million to cover the cost of logistics, making the total financing gap of US$29,522,000.
In the joint resolution, the Legislature also said “The CBL shall make publicly available on a monthly basis pertinent information of the currency reform implementation, including data on the actual volume and value of currency imported, put into circulation, withdrawn from circulation and destroyed.”
It furthered that “The replacement shall only be done through CBL, the commercial banks and designated financial institutions regulated with strict supervision and monitoring by the CBL.”
The CBL shall implement in conjunction with the printer plans that will mitigate counterfeiting of new family of banknotes.
Meanwhile, the House’s decision edges the Legislature a step closer to completing the process to authorize the CBL to print the new family of banknotes.
The House now awaits the Liberian Senate, whose approval will complete the authorization process.