Liberia: Rep. Gray Claims House Yet to Receive GAC Boss ‘Warning Against Printing Money’ Letter
Monrovia – Representative Moses Acarous Gray (CDC-District #8, Montserrado County) has told this newspaper that the leadership of the House of Representatives has received no communication from the General Auditing Commission (GAC) advising against authorization to print additional Liberian bank notes as been reported by the media.
In a text message, the ruling party’s lawmaker said he is yet to know whom received such letter on behalf of the House or Representatives. “Who the letter was given to is yet to be established. As Acting Chairman on Executive, I have spoken to the Speaker; he told me that no such letter has not reached his desk.”
The Office of House Speaker Bhofal Chambers is yet to speak on the leaked of the communication if such communication had reached his office.
Prior to his response to the GAC, the Montserrado County District #8 Representative said printing of the new banknotes will help the CDC government to put smiles on the faces of civil servants (many of them have not being paid for several months), a post he later deleted from Facebook.
In a sharp response to critics on social media, he posted: “Printing of money will also help pay our civil servants on time for the Christmas’ break, but you are kicking against it because you believe that if civil servants are not paid on time, they could join the so-called Weah must resign failed protest.”
Rep. Gray argued that the significance of the printing of new Liberian banknotes by the Weah administration cannot be overemphasized.
The GAC letter
A letter dated October 8, 2019 communication addressed separately to House Speaker Bhofal Chambers and the President Pro-Tempore Albert T. Chie, the General Auditing Commission (GAC) called on both Houses not to accept the request made by the Executive, “because it will accordingly have an adverse consequence on the economy and the people.”
“I am strongly of the opinion that giving your approval to print more currency is unfathomable, but will be very misplaced, granted we are yet to understand all what happened at the last currency printing, as evidently, the US$25 million mop-up exercise does not engender much confidence in the Central Bank of Liberia (CBL).”
The GAC continued: “In fulfillment of part of my constitutional mandate aimed at providing support to your oversight of financial management role, I firmly suggest that you do not waver on your resolve not to print additional Liberian currency/money at this time.”
President George Weah in September of this year sent a communication to both houses of the Legislature, calling for their approval to print new banknotes.
Acting upon the President’s request, the Senate Committee on Banking and Currency, chaired by Grand Gedeh County Senator Marshall Dennis, quickly recommended for Plenary’s affirmation. But the committee’s response to the President’s request drew vehement opposition from some senators.
One of those senators is Oscar Cooper of Margibi County. Senator Cooper in his opposition wondered why the CBL should request to print L$35 billion, when the money in circulation is L$21 billion that needs to be removed from the market. “What becomes of the difference of L$14 billion, which was not properly answered by the Governor?” he asked.
According to counts provided by the GAC, “most currencies are fiat in nature, which means they are not backed by any tangible commodity, and technically have no intrinsic value, but rather by the government’s authority and trust. Again, fiat money has value only because government maintains its value or because parties engaging in exchange agree on its worth.”
The AG continued: “A review of the daily exchange rate on the CBL website shows that the exchange rate has steadily risen on a daily basis during the period August 16, [to] October 2, 2019. Generally, a major problem of the fiat currency is inflation, and as government prints new money, the currency already in circulation devalues.”
The GAC said the most important rationale for the entity’s professional advice in addition to the above are that: a) “it has not been verified whether the CBL has implemented measures to address the lapses noted by the Kroll’s Scoping Report (3.2.8 non reconciliation of vault balances and 22.214.171.124 inconstancy in finance department); b) the Presidential Investigative Team (PIT) report 2.2.25 – raises alarms of no security in place for the protection of reserves; and c) the GAC’s Agreed-Upon Procedure on the US$25 million mop-up exercise highlighted (1.1.3 unsigned, and not dated minutes, 2.4.2 lack of procedure for posting, and 2.4.3 disbursement not processed through the bank).”
The GAC communication further raised several questions, including that, “the investigation into the whereabouts of the L$16 billion, which has not been finalized; the matter of how the mop-up exercise was handled has not been addressed, whether the CBL has put in measure to ensure most currency flows through the banking system as 90 percent of the currency [exists] outside the banks.”
Article 32 of the Liberian Constitution states: “The Legislature shall assemble in regular session once a year on the second working Monday in January.”
However, the ‘B’ part says: The President shall, on his own initiative or upon receipt of a certificate signed by at least one-fourth of the total membership of each House, and by proclamation, extend a regular session of the Legislature beyond the date for adjournment or call a special extraordinary session of that body to discuss or act upon matters of national emergency and concern. When the extension or call is at the request of the Legislature, the proclamation shall be issued not later than forty-eight hours after receipt of the certificate by the President.