Liberia: Ex-Auditor General Has Reservations About Weah Govt Entering IMF Facility Program


Monrovia – When the International Monetary Fund (IMF) announced that it had reached a staff-level agreement on a new program with an opening to its Extended Credit Facility this week, it was made clear that its realization is subject to the Liberian government fulfilling significant prior actions in the fiscal and monetary areas.

Report by Rodney D. Sieh, [email protected]

Said the IMF Executives: “The staff-level agreement is subject to fulfillment of significant prior actions in the fiscal and monetary areas that will need to be undertaken by the Liberian authorities. Assuming these are satisfied in a timely manner, it is anticipated that the IMF Executive Board could consider approval of Liberia’s formal request for financial support under the Extended Credit Facility as early as the first half of December 2019.”

Morlu Rattling Cages

In the aftermath of the IMF’s announcement, former Auditor General John S. Morlu rattled a few cages in the last 24 hours, with the revelation that the IMF’s “Prior Actions” includes a demand for the Weah-led government to dismiss some 400 people at CBL and to implement further cuts in expenditure to bring the budget into balance. 

FrontPageAfrica has learned that those employees are recent hires brought on by former Governor Nathaniel Patray, and include sympathizers and patrons of the ruling regime, recommended by the party.

The IMF, in an earlier report had cautioned the administration against its massive wage bill it blamed for the economic downturn.

In a series of messages shared on the social medium Whazzap and making the rounds on Facebook, the controversial former AG who at one point in time was reportedly being considered for the position of a corruption czar in the Weah-led government, took the government to task and wondering whether it would agree to layoff that many Liberians plus more in the midst of massive poverty and unbearable high unemployment.

Mr. Morlu, who has expressed misgivings about Liberia entering the IMF program cautions: “Liberia’s is marching toward “Receivership,” a form of Chapter 11 Bankruptcy. More sufferings even before a final deal is struck with the IMF: More salary cuts, more expenses cut, more layoffs in Liberia.”

“So, Liberia is not yet in the program until IMF can see more cuts in expenses, beginning with 400 layoffs at CBL. It’s a shame that Liberia is again going into receivership under the IMF, causing more hardships. If I were advising President Weah, I would have refused any more IMF programs. It has never worked in Liberia.”

 – Mr. John S. Morlu, Former Auditor General, Republic of Liberia

IMF Demanding More Cuts, Morlu Says 

Chapter 11 “is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets. Named after the U.S. bankruptcy code 11, corporations generally file Chapter 11 if they require time to restructure their debts. This version of bankruptcy gives the debtor a fresh start. However, the terms are subject to the debtor’s fulfillment of his obligations under the plan of reorganization. Chapter 11 bankruptcy is the most complex of all bankruptcy cases. It is also usually the most expensive form of a bankruptcy proceeding. For these reasons, a company must consider Chapter 11 reorganization only after careful analysis and exploration of all other possible alternatives.”

According to Mr. Morlu, the IMF is demanding more cuts in expenses as the salary cuts previously done after the government was given weren’t enough. “This means more suffering. So, Liberia is not yet in the program until IMF can see more cuts in expenses, beginning 400 layoffs at CBL. It’s a shame that Liberia is again going into receivership under IMF, causing more hardships. If I were advising President Weah, I would have refused any more IMF programs. It has never worked in Liberia. The Liberian government must grow its revenue base and take care of its own problems, not always depending on some outsiders to come and save the day.”

Instead, Mr. Morlu suggests that the administration should focus on maximizing economic output by using all available means to get more out of our natural resources. “The current problem in Liberia is revenues and inflation. Instead of trying to get more revenue, the government has given up, so it’s allowing the country to enter into receivership for a few million dollars.”

Mr. Morlu explained that the IMF is unlikely to spend even $200 million in Liberia, thus, it will not make a dent in the fundamental poor governance problems facing that nation. “Liberia is back to Pre-HIPC with IMF coming, as it has done since 1945. Weah must lead on fiscal discipline and good governance matters. As I said once to the New York Times, “only the Liberian president can solve Liberia’s fundamental poor governance problems and get that country moving in the right direction. Liberia is over 172 years old and it is in chronic poverty.”

Mr. Morlu lamented that some of the ministers and people appointed are usually engaged in “self-promotion” with nothing to show. The Nation has fallen, yet again. I feel so bad for Liberia.”

Dip in Revenues

Mr. Morlu feared that another round of budget cuts may be forthcoming due to the lack of sufficient revenues to support Liberia’s budget. “Some government employees have been informed of additional 8.4% cut but such meager cuts might not be enough to satisfy IMF. The $42 million shortfall the Pro Tempore is reported to have disclosed to avert another demonstration by staff of the legislature is a drop in the buckets and IMF can’t save Liberia. Never has, never will. The Liberian President must save Liberia.”

FrontPage Africa has learned that the current monthly expenditure/obligations is about $42 million dollars but the government is generating around $25 million in revenue, thus leaving a large gap to be filled. 

In response to Morlu, the minister of finance indicated in a chat room post that the employees at CBL will not be dismissed but reassigned as contractors, because  contractors are cheaper than employees. He blamed CBL for having “a larger than normal budget,” and  therefore any support from the IMF will not be used to finance the overstaffed CBL. 

Liberia is entering the IMF program at a time when the nation is witnessing near daily protests and demonstrations and threats of protests from various government institutions demanding to be paid, as employees of some agencies complained they have not been paid for two to three months. Some employees are even demanding that the current cuts in salaries is not put into place, as they do not want their salaries cut.