Liberia: House of Rep. Reappropriated NRF Allotment from US$29m to US$12m; Donor Partners Admits Discussing Same with Govt
MONROVIA – Investigative report submitted to Plenary on Tuesday by the Public Accounts Committee of the House of Representatives shows that the Liberian National Legislature Re-appropriated the National Road Fund allocation from US$29 million to US$12 million.
The report cited National Budget fiscal outturns that confirmed budgetary recasts that took road appropriation from US$29 million to USD 12 million.
The fiscal outturns referenced in the report are in the possession of the FPA and these show that show Road Fund resources were reallocated by the national legislature to fund the COVID-19 recast.
The Report also confirms that the Government and the Road Fund Steering committee engaged development partners such as the International Monetary Fund, the World Bank, the United Kingdom and the German Government on the use of $7.0 million of Road Fund resources for COVID-19, which was part of the reappropriation done by the National Legislature.
The PAC report observed that the absence of the Ministry of Finance and Development Planning and the Liberia Revenue Authority during the existing conference conducted between the Road Fund and the General Auditing Commission may have contributed to a lack of clarity on the information presented to the GAC. They recommend that going forward, the MFDP and LRA must be present at all such exit conferences.
The fund was established to defray the cost of road maintenance across the country. But the controversy over its use hovered as some development and bilateral partner, most of whom have come out to confirm having a discussion with the government of Liberia on the one-time use of the fund for the fight against coronavirus.
“Thus by the provision of the aide-memoire, the committee recognized that the arrangement between the government and the development partners, the aide-memoire serves as sufficient consideration for the re-allocation of funding to affect other priority budget lines,” the report stated.
Minister Tweah, during an appearance on Spoon TV on April [May] 24, according to the Daily Observer, noted that he received a nod of approval from some of Liberia’s development partners to divert US$25m of US$50m collected to pay salaries of civil servants.
“When you are faced with a crisis of that nature, you begin to look for ways to solve the crisis. We had a conversation with legislative leaders and development partners. The German Ambassador [then] said it was not bad to use US$6-7 million, but it should be a one-off thing,” The Daily Observer quoted the Minister as saying.
The GAC, in its report to the Legislature, which covered two fiscal periods (2018/2019 and 2019/2020) revealed that the Liberia Revenue Authority collected US$53,018,871.54 and deposited the money in the Consolidated Fund Account instead of the National Road Fund Account as required by the Road Fund Act. The Consolidated Fund Account is the Government general revenue account that is controlled by the Ministry of Finance and Development Planning (MFDP). Of this amount, according to the report, the MFDP remitted US$28,152,231 to the National Road Fund thereby leaving a difference of US$24,866,637.54 which was not remitted.
The GAC audit report stated that in its response to the audit report, the NRF complained t that the decision of Minister Tweah caused the agency to miss out on the US$15m from the Millennium Challenge Corporation compact.
“The NRF brought to the attention of the Minister of Finance and the IMSC the issue of all fuel levies be remitted to the NRF accounts not through the consolidated account to avoid interference with the fund flow and to avoid delay in payments to contractors and suppliers for road-related maintenance works,” according to the NRF in its response to the GAC.
Donors Were Aware
The International Monetary Fund, European Union and the World Bank, major bilateral partners of the country, when contacted acknowledged that they were and formed part of the discussion as claimed by Minister Tweah.
In a carefully worded joint statement, the EU and the World Bank indicated that their involvement in the matter was in the context of Liberia South-Eastern Corridor Road Asset Management Project (SECRAMP).
“In response to your inquiry on the Government of the Republic of Liberia’s use of its funds from the National Road Fund (NRF) to finance critical expenditures in the national budget, please be advised that the Government discussed the issue with the World Bank and three other donors (Germany, the UK, and the EU),” a joint statement from the EU and World Bank revealed.
“It was done in the context of the Liberia South-Eastern Corridor Road Asset Management Project (SECRAMP), co-financed by the Government of Liberia using the NRF, the World Bank’s resources, the Liberia Reconstruction Trust Fund (LRTF) to which the three donors contribute, and the private sector. The Government assured the World Bank and the other donors that the NRF would accumulate adequate resources to be set aside as counterpart funding for the planned road project.”
The Southeastern Corridor Road Asset Management Project for Liberia aims to support the recipient’s efforts to enhance road connectivity for residents living along selected sections of the Ganta‐to‐Zwedru Road Corridor and to improve institutional capacity to manage the road sector, according to the World Bank
Though the statement did not indicate how much was agreed upon to be used by the government, the World Bank and the EU stated that they advised the relevant authorities must be consulted in the framework of legality.
“As a general rule, in its work with all member countries, the World Bank/EU defers to the country authorities on decisions of national interest and their legality.”
The IMF, however, in a statement that differed slightly from its counterparts also acknowledged that it, too, was in the know and gave its acquiescence to the deal.
“The government discussed the transfer of the US$7m from the Road Fund to the FY2019/2020 budget with development partners, including the IMF,” Aidar Abdychev, IMF’s Resident Representative said in a statement.
“We note that the transfer was included in the 2019/2020 budget Act approved by the Legislature, and we defer to the authorities and Legislature to follow the pertinent requirements under domestic laws for effecting such transfers.”
U.S. Embassy Distances Itself
On the heels of the Minister’s remarks, the United States Government, the country’s main bilateral and development partner, has come outdistancing itself from being a participant in the Minister’s thinly veiled declaration of violating the law.
“The United States Government has never supported or approved alternative uses of revenue meant for the National Roads Fund,” an Embassy Spokesperson said in a statement to FrontPage Africa. “The U.S. Embassy, representing multiple U.S. agencies, including the United States Agency for International Development, continues to be a strong partner of Liberia in its development and journey to self-reliance.”