Salutation: Distinguished Colleagues, the Senate Secretary and Chamber Staff, Staff and Employees of the Senate, Members of the Press, Visitors, Other Distinguished Ladies and Gentlemen:
The 5th Session has been a busy Legislative year, but we have not been out of office for a protracted period of time as it was before. Thanks to the new law which set a new schedule for recess for the Legislature. We have been able to achieve a lot and at the same time keep an active eye in respect of legislative oversight.
This Sitting will be devoted mainly to discussion of the National Budget for 2023 and economic issues which impact the budget. Since the 2022 Budget is the highest since the birth of our Republic, we will be keen on its performance (especially for the first three quarters). This will determine whether an increment or decrease in the total budget figure for 2023 will be justifiable.
Due to the huge amount of work that has to be done on the draft 2023 budget when proposed and the procedures involved after is presentation, we don’t envisage its passage before adjourning for the Third and final Constituency Break on December 8; we however hope that legislative work on the budget can be concluded before the President’s Annual Message in January.
So let me take a few minutes, Distinguished Colleagues, to lay the basis for our agenda for the Final Sitting: issues which will help achieve macroeconomic stability and create the enabling environment for public sector spending.
Domestic revenue mobilization is a key component of the Revenue Envelope. We thank the Liberia Revenue Authority for its collection efforts. We however urge the LRA to pay key attention to the extractive industry which holds significant potential for revenue generation. This includes mining, logging, commercial farming in palm, rubber, coffee, and fishery .
Transparency and accountability in the extractive industry is key to raising revenue for the Government while at the same time stimulating economic activities in the host communities and help to lift the local communities out of poverty.
The small and medium scale mining sectors (ie, Class C and B licenses) have excellent potential as a source of revenue for the Government and to help improve the lives of the mining communities. But this sector is in dire need of reform. Presently there is no order in the sector. Foreigners have invaded the sector, aidedsometimes by some of the local authorities in the mining areas. Some private sector actors with means also participate in the sector without paying their correct dues to the Government. There is also allegation of the participation of some Government functionaries and operatives.
Besides gold and diamond, the traditional minerals that have been mined for decades, the artisanal or small to medium scale mining sector in the last few years have seen the upspring of the mining of heavy mineral beach sands which contain sources minerals for titanium, thorium and other rare earths. There have also been reports of small scale mining of the mineral columbite-tantalite (commonly called COLTAN) in some parts of the country.
What revenue from royalty on these minerals is available for budgetary appropriation ?
The Ministry of Mines and Energy is struggling to control the widespread illicit mining and the associated smuggling of mineral commodities. Only an inter-agency effort involving the security architecture and other relevant agencies, such as the Liberia Revenue Authority, with appropriate financial support, will bring the needed results; in addition to the revamping of the Ministry’s Department of Mines and the Inspectorate Division which are responsible for licensing, regulation and monitoring of the artisanal mining sector.
There is some order in the large scale mining sector, as production and exports are easily monitored; but the host communities and workers often complain of unfair treatment.
We mandate the Senate Committee on Lands, Mines, Energy and Environment, the Public Accounts Committee and the Committee on Internal Affairs to look vigorously at the small to medium scale mining sector.
For the petroleum industry, not much is being heard from upstream petroleum activities managed by NOCAL and the LPRA. No news of bid rounds, no news of direct negotiation for petroleum acreages, etc. And subsequently, nothing for the National Budget;
The downstream petroleum sub-sector managedessentially by the LPRC has had its own regulatory and institutional reform and other technical issues for which its contribution to the national budget has not been impressive.
There have been reports of widespread mis-use of duty free on gasoline and diesel fuel for Government agencies and institutions. The actual beneficiaries are not the Government functionaries. There is a need to totally scrap this privilege for all three branches of Government. The Government will save millions of dollars for the budget. The Senate Judiciary Committee need to look into this matter and if appropriate prepare the relevant legislation or amendments to that effect.
The logging sector is also in need of reform. This high potential revenue earner has performed dismally over the last 17 years. Logging companies in yester years used to maintain feeder roads. These days, logging companies depend on the Government to maintain the roads they ply.
There is also huge potential in private palm plantations, but land tenure and host communities-Concessionaires conflicts are some of the issues underpinning the productivity of that sector.
The Government, through its own resources and funds from bilateral and multilateral sources continue to support investment in cash crops such as rubber, cocoa and coffee. Increased investment, appropriate regulation and monitoring are necessary to stimulate real growth in the sector and generate revenue for the budget.
There is extraction of fish and other marine resources daily from our waters. There is regulatory and institutional reforms going on in the sector and some level of assistance from our international and other partners. We also note some level of assistance to our artisanal fishermen. However, over the last few years, contribution to the national budget from the fishery sector has been very very minimal. We hope the reforms and the investment will generate revenue for the Government in the near future.
In its 13th Report, the Liberian Extractive Industry Transparency Initiative (LEITI) listed many mining and logging companies that are not in compliance with the terms of their various agreements or licenses. We urge LEITI and other stakeholders to ensure, through their established procedures, that these companies are brought into compliance.
During the break, we had a meeting of the Secretariat of the LEITI to discuss their work program and understand their challenges in ensuring transparency in the mining, logging and other extractive sectors. We urged them to include the artisanal extractive sectors into their work programs. We also assured the Secretariat of the commitment of the Senate to support their work. We affirm and confirm this commitment today.
Distinguished Colleagues, we take this opportunity to reiterate once more, that there is a need for the Executive Branch to review the various mining, forest and other concession agreements to bring them in line with profound changes in circumstances which have since occurred.
For the 2023 National Budget, the Senate will support increment in the budgets for education, health, security and elections; and also for revenue-generating agencies to booster their efforts for increased revenue.
On the sideline of budget discussion, the Senate will finalize debate and passage of the Drugs Law and other key legislation in committee rooms.
Ladies and gentlemen, fellow citizens, I have tried above to set the premise for key agenda items for this Legislative Sitting which will essentially consist of legislative oversight to bring various economic issues to the fore. But rest assured that, my colleagues who possess diverse backgrounds in finance, auditing, accounting, economics, government, public policy, management, administration, trade, law and other disciplines, will deal with those issues and propose other economic matters over which I don’t have enough expertise to have introduced.
Let me close, Distinguished Colleagues, by thanking you for the cooperation I continue to receive despite our various political orientations and for putting in extra time to do the work of the Liberian people.
May God continue to shower his bountiful blessings on the State.