MONROVIA — The Central Bank of Liberia (CBL) and the Afriland First Bank Liberia Limited (AFBLL) on Thursday, March 14, signed a memorandum of understanding (MOU) for rural currency changeover through the Rural Community Finance Institutions (RCFIs) in 8 of our 15 counties. Namely: Nimba, Gbarpolu, Grand Kru, River Gee, Rivercess, Sinoe, Lofa, and Bong Counties.
By Francis G. Boayue
The partnership is part of an effort to facilitate the currency changeover project and bring essential banking services to rural communities across Liberia and as well in alignment with the legislative mandate which emphasized the exclusive role of commercial banks and regulated financial institutions in conducting currency exchange.
The Governor of the Central Bank of Liberia, J. Aloysius Tarlue, Jr, welcoming the Managing Director and staff of Afriland First Bank Liberia Limited (AFBLL) to the event, said the occasion underscores the commitment of both institutions towards fostering financial accessibility and promoting economic stability.
Reflecting on the journey that led to this momentous collaboration, the Governor of the Central Bank of Liberia recalled the initial Memorandum of Understanding signed two years ago with all commercial banks, setting the stage for the currency exchange initiative.
“Today, we are here witnessing another event that is not only important but special. Special in the sense that the CBL is signing another MoU with Afriland Bank for the exchange exercise through the Rural Community Finance Institutions (RCFIs), which are the main and only formal financial institutions operating in the capital or strategic cities in 8 of our 15 counties (namely, Nimba, Gbarpolu, Grand Kru, River Gee, Rivercess, Sinoe, Lofa, and Bong Counties),” said Governor Tarlue.
He said, in keeping with the MoU, the CBL will deal with Afriland First Bank, and the AFBLL, in return, will deal with the RCFI. According to him, the CBL has been mindful of not only complying with this mandate but all other mandates as enshrined in the Joint Resolution.
“This means that Afriland will play the normal role of the commercial banks in the exchange exercise, taking responsibility for the exchange of all old banknotes with new banknotes received from the RCFIs to ensure full accountability and transparency,” the CBL Executive Governor said.
“As we move closer to the March 31, 2024 deadline for the termination of the legal tender status of the legacy banknotes (LS1 and LS2), the role of Afriland in facilitating the exchange exercise in the 8 counties has become more crucial and critical.”
The CBL boss used the occasion to commend the management team of Afriland for this support and partnership, thereby informing Liberians about the status of the currency exchange exercise.
Governor Tarlue maintained, “As of March 11, 2024, the total old banknotes withdrawn from circulation and destroyed by the CBL were LS$21.07 billion of the LS$25.258 billion estimated to have been in circulation.”
This, he said, represents about 84 percent of the legacy banknotes reported at the end of December 2020. This is a significant achievement, and the bank extends its appreciation to all stakeholders for their support and cooperation.
According to him, in July last year, the CBL, under Section 25 of the Amended and Restated CBL Act (2020), issued an official gazette, announcing March 31, 2024, as the deadline for the termination of the legal tender status of the legacy banknotes.
He emphasized that while the CBL assumed that this timeframe was feasible and realistic, there have been several challenges beyond the control of the Bank, including the general road condition in some parts of the country during last year’s rainy season, the general and presidential elections, the round-off presidential elections and the transition process.
Governor Tarlue said, notwithstanding these challenges, the CBL is determined to meet its target of withdrawing over 90 percent of the old banknotes by March 31, 2024.
“To achieve this, we need the continuous support of everyone, especially the businesspeople who handle most of the cash in our economy,” he continued. “We have received complaints that some businesses are rejecting the legacy banknotes already. This action is not endorsed by the CBL.”
He said that the CBL wants to assure everyone that all banknotes deposited at the commercial banks up to March 31, 2024, will be exchanged for their full value. Therefore, there is no need for panic or fear.
“No one should reject the old banknotes for no reason. We should not impose additional suffering on our people! The CBL remains committed to ensuring a smooth exchange exercise. This is why we have taken sufficient time for the exercise because we are sensitive to the condition of our people,” Governor Tarlue cautioned Liberians.
He informs the public that the CBL has embarked on a nationwide exchange exercise over the next two weeks from March 16–30, 2024, in targeted areas of the country.
The CBL Executive Governor added that the bank has set up four teams that will implement this plan, including one team that will be stationed at its newly refurbished facility in Voinjama, Lofa County.
The other counties are Gbarpolu, Rivercess, Sinoe, Bong, Nimba, Grand Gedeh, Rivergee, Grand Kru, and Maryland Counties. The exercise will continue in other counties through the commercial banks, as has been the case.
In his remarks, Robert Nkous, CEO and Managing Director of Afriland First Bank Liberia, expressed gratitude for the opportunity to contribute to this landmark initiative.
“We specifically want to thank the Central Bank of Liberia, under the astute leadership of the Executive Governor, Hon. J. Aloysius Tarlue, for the confidence reposed in Afriland First Bank Liberia to serve as a strategic partner in this crucial exercise, which we consider a call to duty for the country,” he said.
Nkous highlighted Afriland’s longstanding commitment to supporting economic growth and financial inclusion, citing the bank’s track record in empowering small and medium enterprises (SMEs) and driving agricultural financing.
“Today, we are proud that many SMEs have a go-to alternative in Afriland First Bank Liberia for higher range loan amounts, the best market rates, and reasonable collateral requirements as compared to our competitors,” he said.
Additionally, Nkous recalled that following their entry into the Liberian market, “total loans to agriculture immediately began to soar from less than 500 million LRD to about 6 billion LRD in 6 years and remained in the billions throughout our 13 years in the market, only declining slightly due to challenges of attracting long-term funding for such initiatives at some points.
On the issue for financial inclusion, which is the crux of this signing exercise, the network of rural community financial institutions, established through the collaboration of the Central Bank of Liberia and Afriland First Bank Liberia Limited about 10 years ago, Afriland Bank MD said, provided a crucial platform for reaching out to tens of thousands of government and other salary workers, community dwellers, and businesses in hard-to-reach areas like the South East, Lofa, parts of Nimba, and Barpolu.
He also disclosed that, in total, there are 12 RCFIs across 8 counties in locations where there are either no banks or very low operations by banks that are present in those areas.
“These RCFIs, located in Barpolu, Lofa, Bong, Nimba, River Gee, Grand Kru, Sinoe, and Rivercess, have been specifically designated to conduct the exchange exercise at their various locations, and Afriland First Bank is pleased to assume the role of the mediating bank, which shall lend technical support in the process of this exercise,” he said.
He emphasized Afriland’s dedication to bridging the gap between rural and urban communities, citing the network of RCFIs as a cornerstone of the bank’s efforts toward expanding financial access.
Nkous reaffirmed Afriland’s unwavering commitment to supporting the government’s development agenda, underscoring the partnership with the CBL as a testament to collective responsibility and national progress.
