12 May 2009

Liberia: Capital Flight - Millions Out, Less in

Monrovia — Central Bank of Liberia statistics released  show that millions of United States Dollars are leaving the country than are coming, in contrary to the believe that remittances from abroad form a sizable part of the nation’s Gross Domestic Product (GDP).
The CBL’s Financial and Economic Bulletin covering the period October to December 2008 revealed that an amount of US$37.0 million more left the country during this period compared with inflow of remittances here.

The Bank said during the three months period under review it recorded a total inflows (that is money send from abroad by relatives) of US210.7 million, while the outflows (money that left the country) during the same period totaled US$247.7 million-suggesting that if one were to do the math, at least an amount of US$37 million was transfered out of the country in just three months.

According to the Central Bank, if one were to compare the period under review with that of the preceding quarter that is July to September 2008, which recorded US$255.3m, it means that the money coming in the country was reduced by US$44.6 m, while money leaving the country increased by US8m.
“Compared with the preceding quarter, inflows for the quarter reduced by 44.6 million, from 255.3 million at end September, 2008; while outflows increased by US$8.0 million, at the end of the same period.

Inward worker’s remittances accounted for US$55.4 million (26 percent) of total inflows while outward remittances represented US$32.6 million (13.2 percent) of total outflows for the quarter.

In ward workers’ transfers rose by US$7.9 million to US$55.4 million at the end of the review quarter, from US$47.5 million at the end of the third quarter of the year, while outward workers’ transfers declined by US$12.0 million from 44.6 million for the same period. During 2008, inward workers remittances showed consistent declines largely on account of the ongoing global financial and economic meltdown in the USA, UK and other developed and emerging market economies,” the CBL reported.

This trend continued in January and February 2009. In January, 2009, inflow of remittances from abroad amounted to US$69.3 million, while money that was sent out of this country during the same period amounted to US$79.2 million, meaning that compared with the amount received and the amount sent out, US$9.9 million left the country in January 2009 alone.
In February 2009, according to the CBL fact sheet, an amount of US$61.9 million was received here, while US$68.2 million was sent out of this country, again recording the difference of 6.5 million.

The Bank’s head of Research, Policy & Planning Department, Mr. Richard Dorley told this paper that via telephone that the statistics show the rippling effect of the global meltdown here. He said the outflow of capital here was not limited to individuals but businesses as well, especially banks and private firm. He said the reduction in the inflow of remittances here shows the difficulties relatives abroad are finding to send money back home, either due to lack of jobs or other factors associated with the global economic crisis.

He said in the case of workers remittances the inflow is higher on the aggregate even though he maintained there have been a decline since August.
The figures do not include unrecorded capital flight, such cash taken out of the country directly since this is a dual currency economy with the US dollar used side by side with the Liberian dollar.

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