I believe the attention to the Central Bank of Liberia (CBL) began when Kroll confirmed in their audit of the CBL (last paragraph of section 3.2.6.2 of Kroll’s report on page 14 – https://www.usaid.gov/sites/default/files/documents/1860/Kroll_Missing_Currency_Report_2019_508.pdf?fbclid=IwAR3JcTGc5em88e2tR1NtlPx1GADynOmgESJ7iJWVHbGkZy0vLsKCjSlmHgY)
that significant funds of the LRD 16b (LRD 15.506 bn rounded up) had gone missing at the CBL, because the CBL could not say what had happened to the banknotes, after saying it (CBL) had received not just all of the LRD 16bn, but more banknotes than were printed (the printers, Crane, insist they had printed LRD 15.506bn; CBL insists it had received LRD 17.450bn). Kroll in their report also painted a very troubling picture of an absence of controls and system of accountability at the CBL, causing many to wonder if this current CBL was the same CBL that had passed with flying colors during the stringent HIPC and many other reviews and conditionalities that boosted Liberia’s good governance reputation during the just ended EJS era.
Following the LRD 16bn was the infamous USD 25m mop up exercise, of which Kroll recommended a forensic audit. It was actually not surprising when official reports by the Presidential Investigation Team (PIT) and the General Auditing Commission (GAC) about the USD 25m confirmed a total breakdown (or absence) of a reliable system of control and accountability at the CBL.
Then came the current liquidity crisis- no cash available in the banking system, even though CBL kept reporting that there was now more cash in the sector than was available for several decades in the immediate past. CBL through its (then) Executive Governor reported that LRD liquidity in the sector had increased from 6% to 14% (liquidity out of the sector had reduced from 94% to 86%), and total currency in circulation (CIC) had increased from LRD 19bn (CBL 2018 annual report) to LRD 21bn CBL 2019 3rd Qtr bulletin). To its credit though, the CBL was not really assuring about the CIC as it also kept saying it could not properly account for the actual CIC.
So now CBL, the “goal keeper” of our economy has had to be taken over by the IMF to prevent a total breakdown and collapse of the economy, which is now at the brink. But USAID has also stepped in, to introduce Kroll into the “fray”, for the sole purpose of overseeing the management of banknotes and correcting the deficiencies it has highlighted in its report of the missing LRD 16bn. We know the Ministry of Finance and Development Planning is also receiving “technical assistance” from the IMF that is geared towards monitoring closely the public finance management activities of Government.
This could be “creeping GEMAP”, a donor supported program with USAID at the lead, whereby key GoL entities were embedded with international experts who had signing rights to all financial transactions of Liberia (between 2006 and 2009 or thereabouts). As resident head of the Comptroller’s shop and Supervisory Financial Analyst of USAID Liberia, I was privy to these conversations, and saw the initial trusteeship talks evolve from what was supposed to be LEGAP into what became GEMAP. Subsequently, a follow-on program by USAID- the GEMS program was implemented.
The Liberian Economic Governance Assistance Program (LEGAP) was more like a trusteeship program that was watered down to GEMAP, the Governance and Economic Management Assistance Program. Key among the objectives of GEMAP was to “block leakages and ring-fence revenues”. Following GEMAP that the partners tooted as being “successful” (even though our Auditor General then- John Morlu, said Liberia during GEMAP was “three times more corrupt” than during the free for all interim period under Chairman Gyude Bryant), USAID again introduced GEMS, the Governance and Economic Management Support program. The key objective of GEMS was to build capacity and develop systems and controls at key GoL entities, something that the partners agreed was not achieved under GEMAP.
During the GEMAP era I was hired at the CBL to develop the internal audit department. During that assignment CBL received numerous technical support to the extent that it (CBL) met all the requirements of the IMF conditionalities for debt waiver under HIPC, grew our international reserves from USD 5m to USD 350 m, received unqualified audit opinions for every year audited by PwC, and had excellent results from all the safe-guard assessments carried out by IMF approved independent assessors. CBL was strong!
During the GEMS program, I was also in the “fries”, as Deputy Chief of Party, supervising the international experts brought into the country to help develop capacity and international best practice in systems and controls. The Liberian Institute of Certified Public Accountants (LICPA) was one of the direct beneficiaries, as it received local training of accountants for the CPA (chartered accountancy) exams administered by the Institute of Chartered Accountants of Ghana. To date more than 20 accountants have qualified locally (unprecedented) through this route as Chartered Accountants (Certified Public Accountants).
Thanks to many other capacity development support, Liberia developed its human resources to an appreciable level and built systems, institutions, and business processes that set it apart from many other countries on the African continent. On the economy front, for instance, Liberia was the only country in the ECOWAS region that passed all the benchmarks for adoption of the Eco currency in 2016 (https://www.bbc.com/news/world-africa-48882030?fbclid=IwAR2-dlLf8gFdV3LS_MDUGxQlYCfAP3QkAMJoG_fNPxQeVJ7_FaekaJxDO_0);
Liberia also passed the MCC compact; etc. etc. etc. Our internal audit model was also tooted by both the international partners and our regional colleagues around the continent as exemplary and a catalyst for change and good governance in the public sector (again, I was blessed to have been accorded the opportunity to lead internal audit reforms and served as the first head of internal audit in Liberia’s public sector).
But here we are today, only two years within the new administration, with everything falling apart, and Liberia once more on her knees before the international partners, begging for a replay of the LEGAP or GEMAP conditions. Is it a good thing? Yes, it is a good thing because we are at the brink of total collapse. Our banking sector is collapsing very fast and might not survive the next 5 weeks without life support like that being offered by the IMF, USAID, World Bank, AfDB, etc. Socio-economic conditions have worsen so much so that national security is a trending concern. Without the immediate intervention of our partners, we can only imagine the unimaginable.
But is it a bad thing? Yes, it is a bad thing, because we cannot be taking one step forward every time, and five steps backwards immediately after we make some progress. We have decimated our institutions of good governance and productive human resources, all in the name of politics (demontrics really) and self-aggrandizement for a limited few. We wrongly demonize and seek to destroy our best assets, while we exalt our worst liabilities.
Interestingly, the resources we need to turn things around are still within reach, right among us, some in the very institutions that are collapsing; and yet, because of our “demontrics”, we are in this position nearing self-annihilation. Do we really need our partners to do for us all the time, over and over, what we can very easily do for ourselves? When are we going to make real progress rather than simply going around in circles? Puahhhh