The Economic Case for and against President George Weah
Liberia has a crippling economic and currency problem with no end in sight. Nearly a decade ago I began examining and writing a series of articles on Liberia’s Economic Recovery. The country had, at the time, emerged from a 14-year civil war and elected its first female president, Ellen Johnson Sirleaf, a Harvard-trained economist. Everything seemed well. Liberians, Europeans, Americans and the International donor community were all very optimistic. Foreign investors flocked to Monrovia, Buchanan, Gbarnga and other Liberian landward cities in search of Iron Ore (Liberia’s mean export commodity), Rubber, Gold and other minerals. In exchange for Liberia liberalizing its banking, mineral and financial markets to foreign companies, the country was awarded bilateral and IMF debt waiver. In June 2010, the Boards of Directors of the IMF and the World Bank approved irrevocable debt relief assistance to Liberia under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Liberia became the 23rd regional member country (RMC) of the African Development Bank Group to reach the completion point under the Heavily Indebted Poor Countries Initiative (HIPC) and to qualify for debt relief of US$ 2.7 Billion. While this development marked a high Point in Liberia’s economic recovery, it was, however, not its turning point. The road ahead would be more treacherous, and the Liberia’s naïve government officials and inept banking community had either the wherewithal nor foresight to understand what was going on. Hence, I became writing a series of financial and economic warning articles, some of which were published on FrontPage Africa and other Liberian news outlets.
Liberia was headed toward greater economic challenges, I noted in one article. This would not be as a result of the protected civil war (many countries including Ivory Coast, Rwanda, Republic of Congo, etc.) had emerge from more deadly civil wars and thrive or Ebola but something still more menacing: economic and financial holocaust. Moreover, there are very few Liberians with proven economic expertise in high-finance, and those with such knowledge, including Antoinette Sayeh and President Sirleaf, amongst other, are approaching retirement or in fact should have been in retirement stemming from their unfamiliarity with global economy dispensation and the ever-increasing complexities in modern banking and finance: leverage, Fintech, private equity, derivatives and currency exchange. Today, these are the medium and means by which all economies (both large and small, in and out of Africa) function.
In July of 2013 I published a research paper titled Liberia’s Desperate Cry for Growth and Employment and How to Fix the Problem. Two months later I published another article titled Trouble at LBDI, Liberia’s Second Largest Bank Falters, which drew the attention of the Liberian Minister of State of Economic Affairs, Samuel Jackson. He immediately sent me an email upon reading my article and I spoke with me few days later. He asked me some probing economic questions and preceded to contact LBDI’s President, John B. S. Davies, for a meeting with me. For me, this was my patriotic duty to call official and our lackadaisical Liberia bankers and economic managers to task, and I did. I expressed my concern over Liberia’s lack of control and regulations of its banking and financial institutions. I also argued that this callousness would lead to the country’s currency and financial collapse. I also noted Liberia banks was essentially managed by a gang of shadow foreign investors with little interest in the country’s development.
Fest Forward to June 7, 2019, the day Liberians took to the streets in mass protest. Liberia’s economy was, by now, in economic paralysis. With Its GDP beyond reproach and its currency (the Liberian dollar) precipitously falling more than 85% by the time the new leadership of Liberia’s most populist President, George Weah, took office, the people were rightfully outraged at their government.
The Case for President Weah
Most of the world’s presidents are not economists or financial experts, and in fact when they are, history shows that they do a very bad job managing their nation’s economy. Formal British Prime Minister, Gordon Brown, was one of the most financially savvied and experienced British Member of Parliament when he became UK’s Prime Minister in 2007. He had previously headed the British Exchequer, the equivalent of the US Treasury or a Finance Ministry. His economic policies, to say the least, was a disaster. He was forced to resign after only three years of taking office. George W. Bush, a businessman who earned an MBA from Harvard suffered similar economic fate as Brown. His tax-cut and neoliberal economic orthodoxy policies led to the 2008 financial recession, one of the worse in US history.
France current President, Emmanuel Macron, headed Frenches’ Inspection générale des finances or The Inspectorate General of Finance before becoming president. Earlier on in his career, he was also an investment banker and a managing director at Rothschild & Cie Banque. As it stands, France’s Yellow Vest Protest under his presidency has caused some 400 injuries and the French economy has taken a hit after months of protests in Paris and other cities. After only two year in office, Macron recently faced a vote of no confidence in the French National Assembly. He offered concessions to quell the protests to no avail. French is now tittering on abridging EU’s budget deficit ceiling as a result and risk further credit downgrades sooner rather than later. His predecessor, Nicolas Sarkozy, was also a finance minister before becoming president of France. Sarkozy, for his part, presided over a binge of corruption and banking fraud allegation for which he is now facing jail time if convicted. The Daily News of London on June 9th run this caption: “Former French President Nicolas Sarkozy faces jail time after being charged with fraud and running a corrupt election campaign.” Sarkozy is also facing several other allegations including false accounting and breach of trust and is also under investigation for numerous other scandals and claims that he received £42 million from the late Colonel Gaddafi of Libya.
Be it Silvio Berlusconi of Italy, Lucas Demetrios Papademos of Greece or Ellen Johnson Sirleaf of Liberia, the Harvard trained economist whose government presided over one of the most corrupt eras in Liberia’s history suggest a stark contract between financial knowledge and personal integrity. Perhaps, it would have been better for these individuals to have remained in their financial planning and managerial jobs rather than be promoted to the presidency.
Conversely, there have been many great presidents without extensive levels of financial and economic acumen. Nelson Mandela of South Africa, Paul Kagame, Lee Kuan Yew of Singapore, Thomas Sankara of Burkina Faso, Julius Nyerere of Tanzanian and Jerry Rawlings of Ghana and a handful of other leaders who have made great thrives and undertook enormous social, political and economic reforms. Angela Merkel; who is not a financial expert, has turned Germany into Europe’s most prosperous nation.
George Weah’s lock of economic or financial experience has little to do with his success or failure as President of Liberia; his integrity is the only thing that really counts. Despite numerous missteps on his part: he not declaring his assets as required by Liberian Law, the recruitment of unseasoned Liberia financial planner and economic advisors and widespread corruption and mismanagement within his government, Liberians still attribute some degree of integrity in his leadership and still see some potential in his aspiration to develop Liberia. For starter, he is relatively young, ambitious and well-liked by many, especially the ordinary Liberians- and for good reasons. During Liberian 14-year civil war, George Weah lifted the spirit of Liberians by committing himself to the poor and downtrodden, many who lived in horrible condition on refugees’ camps and shantytowns in Liberia, Ghana, Ivory Coast and elsewhere. He personally supported many Liberians within and outside of the country and helped Liberian soccer players start promising careers in Europe. Moreover, while Liberian educated elites moved abroad and abandoned their country during its perilous years, Weah stood as the Father, Brother and the faithful Son of the Nation and its people. There is no greater patriotism for one’s country than what George Weah has shown to Liberia.
What Must Weah Do?
President Weah has undoubtingly overlooked the enormity of Liberia’s economic challenges and the level on incompetency among his officials is troubling. He has also underestimated the will of the Liberian people to want to do better economically by doing away with corruption in government and society. Clearly, his administration is swimming against the tide. But all is not lost, and with the right economic plan and a heart as big as his, he can stop the economic bludgeoning and weather the financial storm that’s brewing of the country.
Liberia does not really need a financial or economic president to turn things around; it simply needs a president willing to take unprecedented economic and financial measures to provide for the people, which President Weah may be inclined to do. He has the power to institute an Independent Emergency Economic Management Team (IEEM) comprising of about 50 Liberians with proven financial and economic expertise to study, review and present a sound economic roadmap within 90 days. I do not believe the IMF, the US or the World Bank is capable of helping Liberia at this point. In my opinion they have helped caused the problem which spends back decades beginning with the Washington Consensus Plan. I sincerely believe that only Liberians can save Liberia, and the IEEM is one the only ways out of this sorry economic mess for which Liberia has found itself in, again!
The IEEM team should comprise of Liberian financial experts selected from a cross-section of economic and development disciplines (Accountants, Analysts, Journalist, Engineers, Bankers, Nurses, Economists, etc.) selected from within or outside of Liberia. The IEEM team will be charged with designing and submitting a detailed national emergency economic plan for the country. This team should not include any current or previous government official. Placing government officials on such an ad hoc economic team at this point could undermine its legitimacy and compromise its endeavors. The IEEM team should work around the clock at designated locations within Liberia, with a few members in the US and Europe. They should to granted access to all government financial and economic data and enjoy the full cooperation from all private and public agencies and ministries. Membership on this team should be based strictly on academic and practical financial knowledge, experience and expertise in relevant areas of studies such as economic modeling, banking, currency management, business development, employment, financial analysis and investments.
Since George Weah is the current president of Liberia, he should be given the courtesy to appoint at least most of the members of IEEM Team and should use his executive and emergency powers to institute this team as soon as possible- in accordance with Liberia Laws. I believe this is the only way to stop this economic situation from escalating, while his government economic team develop a better long-term economic and development plan for the country.
The Case Against George Weah
There is a popular legal phase that states that ignorance of the law is not an excuse. The same can be said that ignorance of managing a country’s economy is not a defense. Mr. Weah had sought the Liberia presidency for over a decade. Hence, he should have hit the ground running. Had he understood the job for which he was seeking, the Presidency, he would have known the real extent of Liberia’s economic maladies and would have put into place measures to manage the economy accordingly- but, he did not.
When President Obama and Bill Clinton inherited a failing US economy in 1990 and 2008, respectively, they had a good idea of what to do. They had studied the US Economy and were well knowledgeable of the many challenges that lay ahead. Precisely, they both hit the ground running. They designed and instituted economic programs within their first 90 days, which brought about financial stability in the US Economy. They both also recruited experts outside of their political cycles, including Larry Summers and others to help manage the economy. Lastly, they did not embark on roads and infrastructure projects without first attacking unemployment and growth; neither, did they wait until the American people started to demonstrate in the streets before acting.
The presidency is a serious business for serious people. The lives of millions depend on the decisions, policies and economic management of the president. Many elected leaders have been prematurely removed from office, and rightfully so, for failure to manage and provide for their people after winning elections. Britain, for example, kicked-out several prime ministers over the last few years due to economic and political mismanagement: David Cameron in 2016 and now Theresa May.
Replacing Weah’s finance minister or central bank governor is not an economic plan, as the protest leadership (CoP) are demanding. Also, traveling to dozens of countries is also not a financial framework, even if those trips result in bringing a little money back to Liberia. If President George Weah must continue in his role as president of Liberia then tangible and measurable economic results must be shown for all Liberians to see.
Moreover, incremental and real economic progress must be made. As the above data suggest, Liberia’s economy is in shambles and real economic actions are needed as soon as possible:
Liberia’s exchange rate is currently $1LD to $200 USD, it should be around $1LD to $100
GDP is currently at 2.4% (IMF recent assessment forecast .04% GDP for 2019), this should be at least 5% (Libya is now growing at 55% and Ivory Coast at 7.7% following their recent civil wars)
Inflation is currently at 23.3% and should be below 15%
Last but not lease, Liberia’s interest rate is at 12.5%, which should be below 8%
We cannot even begin to talk about employment or development with interest rate as high as 12% and inflation at 23.3%. Liberia experienced a higher GDP rate during the Charles Taylor’s regime, when the country was emerging from war than it is experiencing today. This is unacceptable by any economic measure.
I am not an economist and Liberia doesn’t need one to fix the problem. We can recall that it was during much of the Harvard-train economist’s Presidency of Ellen Johnson-Sirleaf that billions of dollars in foreign aid, concession and the budget was squandered, leaving Liberia broke by the time George Weah took office. Notwithstanding, Liberia needs people with an in-depth knowledge and understanding of finance and economic supervision, especial in the areas of currency and banking management, business development and job creation. More importantly, Liberia needs people with integrity. There are many outstanding Liberians financial analysts and practitioners who have written about and studied Liberia’s economy- me included, and our combined knowledge and expertise must be brought to bear at this critical point.
George Weah must now work with the leaders of the protesters, also known as the Counsel of Patriots, to recruit these individuals and set up this Emergency Economic Management Team. The time for politics is over and as Bill Clinton, who presided over the greatest economy growth in the 21st century, put it: It’s the economy Stupid!
About the Author
Chu-Chu Alex Jones was born in Liberia to a Senegalese father and a Liberian mother. At the tender age of 13, he experienced the horrors of war, displacement, hunger and fear during the Liberian civil war which claimed the lives of over 200 thousand people, including his father. As a result, he moved around West Africa and eventually immigrated to the United States in 1996. After studying engineering, business and finance and earning a dual bachelors from Franklin University in Columbus, Ohio, he moved to New York City to work on Wall Street, where he became involved in global trading, international planning and global development. Alex writes and speaks extensively on financial and business issues including investment, banking, urban and global development and the economics of poor countries and communities. He is the founder and CEO of The Black Education Foundation and The Black Education Television, and the author and editor of all five of the Development Manifestos: formula to dismantle inequality and promote urban and global development, to be published in the Fall of 2019. Alex can be reached at [email protected]