Monrovia – The Liberian dollar currency has significantly depreciated in terms of value on the exchange market, trading as low as L$95 to US$1, one of the worst in the recent history of the country.
Report by: Henry Karmo (0886522495) [email protected]
The House of Representatives earlier this year endorsed President Ellen Johnson-Sirleaf’s request to print additional bank notes.
The House voted in favour of the President’s request after the Committee on Banking and Currency, chaired by Representative Julius Berrian (CDC-District #10, Montserrado County), and submitted a report to plenary.
The 2016 index of Economic freedom on Liberia shows that the country reform-minded government has managed to place the country on a path of growth despite the challenging economic environment.
Reforms have dismantled some of the barriers to trade, simplified business licensing, and eased credit restrictions, contributing to an average growth rate of over 6 percent over the past five years.
Liberia’s average tariff rate is 6.1 percent
Considerable effort has been made to modernize the regulatory framework. The business start-up process is more straightforward, with no minimum capital required.
The labor market is underdeveloped, and about 80 percent of the workforce is engaged in informal activity. Following the Ebola crisis, the government increased subsidies for education and health care and received higher levels of subsidized food aid from international donors.
In the wake of these challenges currently, the Liberian Dollar is trading LD$95 to US$1, LD$98 to US$1 buying rate. Because of these circumstances, Senator Nyounblee Karnga-Lawrence (Grand Bassa, Liberty party) wrote plenary informing it of the prevailing circumstances and the need to investigate. The committee on banking and currency was given the task.
In line with its mandate, the committee, chaired by Senator Marshall Dennis of Grand Gedeh County, has recommended to the body that the bill calling for the introduction of a single currency regime be reviewed and passed into law as a mitigating factor for depreciation of the Liberian dollar.
“Liberia is the only country presently in the sub-region, if not the entire continent of Africa, that has a dual currency regime and with the worst economic status on this globe,” the committee report stated.
The committee recommended that the Central Bank of Liberia be continuously mindful of the necessity to solve the liquidity problem as the festive season approaches.
It is also recommended that the CBL do a comprehensive briefing to plenary on the amount of Liberian dollars in the hands of users outside the Banking system and devise a means by which hoarders will be compelled to return that amount into the banking system for proper accountability.
“That the CBL present a comprehensive audited financial statement with all notes attached to prepare plenary through its committee on banking and currency to help take steps necessary to improve the economic situation especially the increase in the exchange rate between the Liberian Dollar and the United States dollar.”
The committee’s report observed that during hearing with the CBL and the Ministry of Finance and Development Planning, the increase in the exchange rate in Liberia is both monetary and fiscal and that the collaboration between the Ministry and the CBL be further strengthened, especially now that the current Minister was once a high ranking official of the CBL.
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