Liberia: Pres. Weah Warns COVID-19 ‘Severe Impact’; Says Poor Public Service Could Undermine Economy Despite

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Capitol Hill, Monrovia – Liberia’s President George Weah has warned the 54th Legislature that emerging and existing challenges including poor public sector delivery and the severe impact of COVID-19 could undermine successful implementation of the Government’s Pro-poor Agenda for Prosperity and Development (PAPD).

The PAPD is the CDC-led Government’s premier development plan modelled after the erstwhile Poverty Reduction Strategy (PRS) of the Ellen Johnson Sirleaf’s administration.

President Weah sounded the caveat during the submission of Fiscal Year 2020/2021 national budget in the tone of US$535.4 million to the Legislature.

“The Liberian economy faces emerging and existing challenges that could undermine the formidable tasks of delivering on the PAPD, ensuring effective macroeconomic management, debt stability and smooth recovery from shocks that undermined the country’s growth prospects over the years. Other challenges include severe macroeconomic imbalances, low economic development, poor private sector development and poor public service delivery and the severe impact of COVID-19,” the President said in a communication accompanying the resource envelope.

With these inhibiting challenges, the President revealed that Liberia’s pre-COVID-19 real GDP growth rate for 2020 was projected at 0.5 percent. However, this projection has been revised to contract to 2.5 percent.

The medium term growth prospect, he said, will be driven mainly by the “mining and panning sector”, which is projected at 9.7 percent recorded in 2019, while the projected decline in the mining sector is on account of the anticipated decline in the price of iron ore, one of the country’s major export commodities.

However, he added the agriculture and fishery sector is expected to grow at 2.3 percent in 2020, which represents a 0.3 percent growth compare to the growth in 2019. Also, the manufacturing sector is projected to record a modest growth of 1.6 percent, up from 7.6 decline realized in 2019.

Although the service sector is expected to record a contraction of 1.7 in 2020, he adds that it represents a stark improvement on the contraction of 5.2 percent realized in 2019.

On the overall, the medium growth prospect of Liberia is promising as the economy is projected to grow at 4 percent and 4.2 percent respectively in 2021 and 2022.

“The agriculture and fishery, and the mining and panning sectors are the only positive growth sectors probably in the medium term. All other sectors are shrinking,” the Presented informed the lawmakers.

“The Liberian economy faces emerging and existing challenges that could undermine the formidable tasks of delivering on the PAPD, ensuring effective macroeconomic management, debt stability, and smooth recovery from shocks that undermined the country’s growth prospects over the years. Other challenges include severe macroeconomic imbalances, low economic development, poor private sector development, and poor public service delivery, and the severe impact of COVID-19.”

– Pres. George Manneh Weah

Meanwhile, the Plenary of the House of Representatives has mandated its joint Committee on Ways, Means and Finance, Budget, and Public Expenditure to review FY 2020/2021 national budget.

Plenary’s action was predicated on a motion by Representative Clarence Massaquoi (District#3, Lofa County) entreating the august body to forward the resource envelope to the Budget Committee for review and subsequent preliminary report within two weeks.  

President Weah, following a two-and-a-half-month delay, submitted the budget in the tone of US$535.4 million – three percent more than the 2019/2020 final recast budget of US$518 million.

Presenting the financial envelope to House Speaker Bhofal Chambers on Wednesday, July 15, on behalf of the President, the Minister of Finance and Development Planning, Samuel Tweah said one of the major reasons behind the increase in the budget was the “meticulous” work carried on by the government, in collaboration with its partners, especially the  International Monetary Fund (IMF).

What’s in the Budget?

According to the President, the estimated expenditure of US$535.4 million, domestic revenue accounts for US$407.5 million or 76 percent, while external resource constitutes US$118 million.

Recurrent expenditure, he adds, amounts to US$482.2 million, constituting 90 percent of the budget, while the Public Sector Investment Projects (PSIP) accounts for US$53.2 million or 10 percent of the total projected expenditure.

Composition of Recurrent Expenditure

Giving the breakdown of the recurrent expenditure, President Weah outlined that debt service constitutes US$75.9 million and of this, US$47.1 million goes to domestic debt principal and interest, while external debt-principal and interest covers US$28.7 percent.

The biggest share of the proposed budget obviously covers the compensation of employee in the tone of US$291.8 million, reducing from US$297 million due to the savings accrued from the salary harmonization exercise conducted across government.

Goods and services including educational and essential health supplies cover US$65.5 million, grants to entities delivering social services, US$45.6 million and US$0.8 million subsidy to nongovernmental organizations complementing government’s effort in strategic service delivery.

Also, US$2.19 million as Social benefits for former elected officials and US$0.5 million in non-financial assets.

Composition of Public Sector Investment Projects (PSIP)

Commenting on the PISP, President Weah revealed that US$29.5 million has been budgeted for infrastructure and basic services with focus on road construction, maintenance of bridges and lightening of streets.

The amount of US$3.5million goes to Social Development with emphasis on legislative projects, health gets an allotted amount of US$1.5 million with focus addressing the effects of COVID-19, agriculture US$1.6 million, focusing on rice development and support to smallholder farmers.

The amount of US$5.9 million has been projected for Public Administration, covering the renovation of the Executive Mansion and support to small businesses.

Additionally, the President revealed that under the PSIP, US$8 million was allocated to conduct the December 8, 2020 mid-term senatorial elections, US$1.5 million falls under the renovation of courts for the judiciary and 0.5 million goes to the electrification of military barracks.

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