5 May 2005
editorial
Your Excellency:
It seems you have been too busy with national problems to follow some happenings of the day in the country. Probably this is why you are yet to react to allegations that the government you lead has interfered with the statutory functions of the Central Bank of Liberia. Your protracted silence has cast enormous doubts in the minds of the pensive public over whether or not the NTGL actually coerced the Central Bank into lifting its seizure upon the International Bank that it said was gravitating into insolvency; and if it did, why?
For your information, Mr. Chairman, the Central Bank announced on Friday, 29 April, that it had seized and entered into the International Bank (Liberia) Limited and its operating license suspended. It said at the time that its action was based upon the authority vested in it by the New Financial Institutions Act of 1999 and in furtherance of the Bank Restructuring and Resolution Policy recently adopted by the Board of Governors to promote confidence in the banking system by ensuring that all operating banks are adequately capitalized and prudently managed. The CBL said IB was critically undercapitalized and has consistently failed, for the past three years, to meet either the minimum net worth requirement of L$180 M or the minimum Capital Adequacy Ratio (CAR) of 8%, one factor contributing to the bank's capital impairment, according to the CBL, being the high percentage of its assets that is non-performing, and therefore not earning.
Despite those revelations, the CBL in less than three days announced a reversal action that re-instated IB's operating license to conduct normal banking business. The public panicked and wondered whether, in fact, the earlier pronouncements by the Central Bank that its seizure action was intended to protect the deposits of customers were not sacrificed on the alter of expediency and gimmick. To crown the public suspicion, a senior manager of CBL resigned his post on grounds that your government twisted arms to restore IB's license.
Gradually, Mr. Chairman, the dust is settling and probably very soon, as the custom is in Liberia, the saga would exit into oblivion as if the contentious issues that were at stake did not matter and have had no effect on the nation now and in the future.
Your Excellency, we strongly feel the issues matter, and that the recent CBL-IB hullabaloo is critical to the overall national recovery efforts in this country, particularly this transition which is regarded as the pacesetter for post-conflict socioeconomic revival.
Already, you are quite aware that your government is suffering confidence crisis and has acquired a lewd local and international image. Public outcry is commonplace relative to what seems to be pervasive corruption or the lack of the moral will by the NTGL to address even the least concerns of the people.
Notwithstanding the gloom of things, the international community still considers certain state parastratals esteemed and critical domain for the revamping of Liberia's social, economic and political fabrics. The Central Bank of Liberia is one. That is why, in spite of widespread condemnation of the NTGL, the International Money Fund, World Bank and other reputable international institutions continue to keep their contacts and find workable solutions to Liberia's debacle.
It is not fair, therefore, for anyone, including you, to dent and dampen the integrity of the few credible public institutions that are remnants of our national pride through which the international community will find faith and trust to hold on with us.
It is our candid opinion, Your Excellency, that the commando-style reversion of the decision of the CBL to suspend the license of the International Bank not only politicizes and demeans the esteem of the Central Bank, but creates credible problem in our financial system capable to triggering international loath and apathy to our ailing condition.
If, for any reasons, the transitional government found the CBL culpable in the saga, the logical way to proceed should have been reprimands for the culprits, specifically the Bank leadership, rather than coercively pushing it to twist its statutory mandate.
You will note that the CBL leadership is subject to removal for proven imprudence and financial impropriety. Unfortunately, Sir, arm twisting is not one of the tactics that can be applied here. It will be appropriate therefore, were you to reconsider the action that led to the reversal of CBL's decision since any indication of the CBL's subjection to political manipulation will further drive the banking system into chaos and distrust.
Thank you very you very much for your kind attention and prompt action.
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