Monrovia – Liberia faces difficult financial times in the months ahead, says President Ellen Johnson Sirleaf as she bided farewell to outgoing Minister of Finance and Development Planning, Amara Konneh.
Mr. Konneh takes up a position with the World Bank office in Kenya, after serving as Liberia’s Minister of Finance and subsequently Minister of Finance and Developing Planning in Sirleaf’s near ending second term.
“So to all of you, who are here to honor him, let me join him in thanking you and saying to you that your biggest test is coming,” she says.”
“Because in the next several months, we will have some difficult financial times and we will be looking to each and every one of you to give your best—to make sure that you steer the course to deliver—not only for him but for your country.”
Pres. Sirleaf’s monotonous declaration of difficult times ahead comes in the wake of a recent slump of prices of major commodities such as iron ore and rubber on the world market.
The decline in the prices of these commodities is seeing a boomerang effect in the nation which has just experienced another budget shortfall—the fourth since Minister Konneh came to the helm of the Ministry, earning him the moniker Amara “Budget Shortfall” Konneh—and still thrives on the plantation based economy.
In Grand Bassa, Grand Cape Mount, Nimba, Sinoe, and Grand Gedeh Counties, major concession companies are folding up to leave the country as many have experienced non-recoupable operational losses, thereby laying off several Liberians.
Adding to the mix of economic woes are threats from workers of concession companies threatening to resist the layoff.
In Grand Bassa County where 40 officers from the Plant Protection Department (PPD) of the Liberia Agricultural Company (LAC) are expected to be laid off due to the slump in price of rubber on the world market and the company’s repeated daily operational losses of US$200,000, the workers union of LAC has threatened to resist the pending layoff.
A cry too similar
Sirleaf’s trumpeting of difficult days ahead is a similar cry that has been echoed by her Party Chairman and Grand Cape Mount County Senator, Cllr. Varney Sherman.
In a commencement address at the convocation ceremony of the United Methodist University in December 2015, the erudite lawyer said he could not wish the graduates a Merry Christmas and a Happy New Year.
“I am sorry I cannot even tell you Merry Christmas neither can I wish you a Happy and prosperous New Year, because to the best of my knowledge and experience, you are graduating at a time which will be difficult for Liberia and all Liberians.”
According to the learned lawyer, the $16 billion dollars concession agreement promulgated and signed by the standard bearer of his party has left nothing of worth to be desired.
“I wish to tell you that of the US$16 billion investments which Her Excellency President Ellen Johnson Sirleaf talked about five years ago, not even one-half of a billion has been invested yet and I don’t expect that much investment will be made in the next few years”, says Cllr. Sherman.
Going further Cllr. Sherman said the failed promise of government to produce 20,000 jobs per annum was based on the growing economy at the time. But with the ongoing downturn of the global economy and the Ebola scourge, he said all of that has led to unfulfilled promises thereby creating disappointment amongst Liberians.
“It may therefore be said without any reservation that the next few years will be difficult for Liberia and its people. These will be years of difficult experience by all Liberians; and it means that those of you who have had the privilege of a college education would have to lower your expectations, yet strengthen your resolve and then go deep into your resilient mood while experiencing these difficulties.”
Not without a scandal
Like his predecessor Augustine Ngafuan, Konneh tenure at the Ministry has not been without a scandal. A 13 million dollars transfer from the European Union to curb the rising rate of Maternal Mortality nearly wobbled the Minister to his knees as he struggled to explain how the money was spent.
Then Health Minister, Walter Gwenigale, and Medical Director of the Jackson F. Doe Hospital in Tapitta, Dr. Francis Kateh told a senate committee hearing that they did not receive a dime of the EU’s largesse.
Challenges linger amid Sirleaf’s pride
But even as these challenges linger on as he takes a bow from the stage, a confident Sirleaf says she’s filled with pride to have been the boss of Minister Amara Konneh.
“Amara, it’s being a pleasure to work with you. It’s being a pleasure to be your boss. It’s so good he was your boss, I was his” said Pres. Sirleaf.
President Sirleaf in a recent FrontPageAfrica interview described Konneh as her favorite Minister.
Responding to a FPA question on whether as President she has favorite minister in government, she said “of course yes! I expressed that, I expressed that the other day when the Friends of Amara Konneh honored him, to say goodbye to him. President Sirleaf said she is happy with the work done by the outgoing Minister.
“I don’t think it is a fair criticism, any Minister of Finance is subject to criticism, because you hold the nation’s purse and everybody wants to get what they want. Everybody feels entitled to it. Sometimes you can but Amara has been very effective in mobilizing resources.”
“Sometimes in the most difficult circumstances for example, while we are here struggling with the fact that we are going to reduce the level of revenue next year, while we are trying to cut back, he is out there trying to convince the IMF and the World Bank to give more budgetary support and so it is beginning to work.”
” We have a lot of budgetary support, budgetary support to help us finance our budget. We could not finance our own budget because our domestic resource mobilization is so low, people do not want to pay taxes here”, she said.
The World Bank in a report released Monday disclosed that Economic activity in Sub-Saharan Africa slowed in 2015, with GDP growth averaging 3.0 percent, down from 4.5 percent in 2014. This means that the pace of expansion decelerated to the lows last seen in 2009.
These figures are outlined in the Bank report entitled Africa’s Pulse, the World Bank’s twice-yearly analysis of economic trends and latest data for the region.
The 2016 growth forecast remains subdued at 3.3 percent, way below the robust 6.8 percent growth in GDP that the region sustained in the 2003-2008 period. Overall, growth is projected to pick up in 2017-2018 to 4.5 percent.
The plunge in commodity prices – particularly oil, which fell 67 percent from June 2014 to December 2015 – and weak global growth, especially in emerging market economies, are behind the region’s lackluster performance.
In several instances, the adverse impact of lower commodity prices was compounded by domestic conditions such as electricity shortages, policy uncertainty, drought, and security threats, which stymied growth.
There were some bright spots where growth continued to be robust such as in Côte d’Ivoire, which saw a favorable policy environment and rising investment, as well as oil importers such as Kenya, Rwanda, and Tanzania.
The external environment confronting the region is expected to remain difficult. In a number of countries, policy buffers are weaker, constraining these countries’ policy response. Delays in implementing adjustments to the drop in revenues from commodity exports and worsening drought conditions present risks to Africa’s growth prospects.
”As countries adjust to a more challenging global environment, stronger efforts to increase domestic resource mobilization will be needed. With the trend of falling commodity prices, particularly oil and gas, it is time to accelerate all reforms that will unleash the growth potential of Africa and provide affordable electricity for the African people,” says Makhtar Diop, World Bank Vice President for Africa.
Several countries are expected to see moderate growth. Among frontier markets, growth is expected to edge up in Ghana, driven by improving investor sentiment, the launch of new oilfields, and the easing of the electricity crisis. In Kenya, growth is expected to remain robust, supported by private consumption and public infrastructure investment.
The projected pickup in activity in 2017-2018 reflects a gradual improvement in the region’s largest economies – Angola, Nigeria, and South Africa – as commodity prices stabilize and growth-enhancing reforms are implemented.
