MONROVIA – Finance and Development Planning Minister-Designate Boakai Kamara says the Unity Party (UP) led-government of President Joseph Nyuma Boakai has inherited Liberia at the time the fiscal balance of the country is in a bad state, with the past administration borrowing the amount of US$18m from the Consolidated Account of the government.
By Obediah Johnson
According to him, the past government action runs contrary to Section 34 of the amended Public Financial Management Act of 2009.
Mr. Kamara pointed out that on the government Consolidated Account balance; there can be no coding of balances of the old fiscal year 2023 and the new fiscal year 2024.
But on the contrary, he disclosed that records obtained during the period under review show that the Ministry of Finance and Development Planning, under the George Weah led-administration borrowed the number of US$18m from the Central Bank of Liberia (CBL) to fund payroll for the months of November and December of 2023.
He made these assertions when he appeared before the Liberian Senate Committee on Ways, Means, Finance and Budget for confirmation on Wednesday, January 31, 2024.
“The fiscal balance of the government that we are inheriting is in a very bad state. The report of US$40m as the Government of Liberia consolidated account balance as of January 19, 2024 is not supported by the facts. The balances reported by the CBL as of the same date was US$20.5m, Liberian dollars converted and add to the United States dollars.”
“In December (2023), the Central Bank of Liberia indicated to us that they were under pressure and the Ministry of Finance and government took US$18m from the reserves to pay salaries.”
He said during the transition period, it was also established that the past government was placing debts into the country’s revenue basket.
He claimed that monies were borrowed without the input of the National Legislature, raising Liberia’s debt to more than US$1.3billion following the departure of ex-President Weah.
He stated that the past regime action was also in total violation of Section 36 of the PFM Act, which among other things calls for the National Legislature to approve the borrowing of monies from international groups.
He disclosed that when confirmed, he will push for an audit of the entire process which led to the withdrawal of the US$18m from the Consolidated Account.
Taking over at challenging time
“We will be taking over the Ministry of Finance at an extraordinary and challenging time. The effects of COVID-19, the European emerging war on the global economy still linger with implication for global growth and demand for commodities export from Liberia.”
According to him, there have been issues of no economic growth in the last six years in Liberia, with an average of 1.3% and a pressured GDP which is on the blink of depreciation, and the recast of the national budget due to under-performance.
He pointed out that Liberia has also been sanctioned due to its failure to pay dues to the African Union (AU) and the African Development Bank (AfDB).
Mr. Kamara added that Liberia also defrauded in the payment of US$650,000 to the European Investment Bank-a situation preventing the disbursement of over US13m to the country.
He said the past government failed to pay interests, principles and commissions to several international audit organizations.
He stressed that a full fiscal review to determine the 2023 fiscal out turn will be done swiftly and outcome would be made to members of the Liberian Senate upon his confirmation.
“We will work with the Liberia Revenue Authority (LRA) to strengthen revenue collection and help improve tax administration. Resource mobilization must take center stage through innovation and at the same time closing loopholes and minimizing other influences affecting revenue collection.”
On expenditure in these challenging times, Mr. Kamara called for government to take appropriate austerity measures by shifting resources to priority sectors such as roads, agriculture, health, education and security.
He said public sector investment projects should increase to at least 50% in the 2024 national budget, adding that, “this is one of the areas that we can work together to improve the wellbeing of the Liberian people.”
Mr. Kamara said the old economy module of relying mainly on the exportation of raw materials, especially iron ore, rubber and other minerals with limited emphasis on economic diversification remains a contributing factor for Liberia’s economic backwardness.
According to him, economic diversification paves the way for industrialization of an economy.
“We must be intentional about innovation and thinking outside the box. An outside the box thinking for example should consider the Liberia’s programs with the IMF should be one that should go side by side with a robust coordinated and integrated that mops up where resources are to be spent for optimal results.”
New economy module
Mr. Kamara maintained that the new economy module that should resonate with all Liberians, especially policy makers can be coined in the slogan “MADE IN LIBERIA”- a commitment, giving the private sector center stage in policy decision making as the engine for growth and development.
He said it is now time for Liberia to move away from government being the largest employer as compare to the private sector.
He added that shifting from this old-aged situation will serve as an outcome for sustainable job creation.
Mr. Kamara emphasized that government policies must support domestic-value addition, with Liberian entrepreneurs leading the charge.
In this regard, he recommended that government works with its development partners to ensure that foreign development assistance is aligned with the country’s national development plan.
He said tangible investment largely in agriculture value chain where small farm holders are supported would be a good start for the government and its partners.
Structural transformation
Mr. Kamara said the structural transformation of the post-conflict nation can only be guaranteed when most of the monies being borrowed go towards addressing genuine constraints, including high cost of electricity, and strengthening the financial system to lure more support to development projects.
He said the absence of a capital market in Liberia is another problem. This, he said, requires more attention from the government.
Mr. Kamara added: “We must know what we want; agree on what we want and just do it.”
“When confirm as Minister, we will work hard with your collaboration and support to reposition our economy on a sustainable path of growth in form by the pending new national development plan that places more emphasis on agriculture, roads and education.”
He pointed out that attaining this new development agenda of the Joseph Boakai led-administration would require working towards securing and sustaining financing for critical investments and the optimization of public resources in the interest of the Liberian people.
Mr. Kamara noted that it is now time that all Liberians put the interest of Liberia first as government seeks to build a vibrant economy that is inclusive and sustainable for all.
He vowed to enhance prudent fiscal management by promoting the spirit of team work.