2 May 2013

Liberia: U.S.$553 Million Draft Budget Presented to Legislature

The Executive Branch of government through the Ministry of Finance has officially presented the draft national budget for the fiscal year 2013/2014 to the 53rd Legislature, with no funding provided for the construction of new roads in the country. The presentation of the budget is in consistent with Section 11.1 of the Public Financial Management Act of 2009.

The draft budget presented is in the tone of US$553M as compared to US$672M for the fiscal period of 2012/2013. Key areas of investment in the draft budget of 2013/2014 include: Salaries and Wages US$206M, Goods and Services US$124.5M, Energy US$15.3M, Roads and Bridges US$23.7M, ICT US$3.5M and Youth Development US$5M.

Other areas are: Capacity Building US$3M, Health US$11M, Education US$15M, Security US10M, WASH US$3.2M and Reconciliation US$2M. Speaking during the presentation of the draft budget at the Capitol Building in Monrovia on Tuesday, April 30, 2013, Deputy Finance Minister for Revenue, Dr. John Kollie said the draft budget was submitted following months of consultations and hearings with spending entities in the country.

Based upon these hearings and consultations, Dr. Kollie pointed out that the Executive Branch drafted an "expenditure plan" of the country. He said the draft budget does not include borrowing and Contingent Revenue for the fiscal period of 2013/2014.

He pointed out that the submission of the draft budget to the legislature amongst other things includes financial and fiscal risks.

Dr. Kollie admonished against the act of borrowing by the Government of Liberia (GOL) adding that, "we have to be aggressive on borrowing."

Dr. Kollie said capital must be generated by government in order to invest in key economic expansion programs to ensure job creation for Liberians. He disclosed that there is no funding in the draft 2013/2014 fiscal budget for the construction of new roads in the country. According to him, feasibility studies would be conducted on bad and damaged roads in order to seek and attract donors.

"Contingent revenue is estimated at US$40M and estimate on borrowing is about US$150M. Envelopes were included in the overall envelopes that we carried revenue projection to US$743M dollars that would be an increase of 11% increase over FY 2012/2013. Based upon our experiences, we decided that it would be good to plan public expenditure on our core revenue risk that will be grant but, for the purpose of planning accurately public expenditure we limit it to the core revenue risk," he stated.

"Our infrastructure was destroyed during the war. If we were to furbish the severe infrastructure deficit we have, we have to be aggressive on borrowing and it will require partnership of both the legislature and executive to be able to raise the capital we need to run key economic expansion programs to be able to bring job creation to our people. The MOF will be very aggressive in going out there in making sure that we pursue bilateral and multilateral donors and vendors who are prepared to undertake investments in our country. We will be looking up to the legislature to support our economic expansion," the Finance Ministry official amongst other things added.

For his part, House Speaker J. Alex Tyler commended the Executive Branch of government for the "timely" presentation of the draft national budget.

He said "other instruments" relating to the draft budget would be requested by the legislature in order to "facilitate the passage of the budget." However, he promised to inform his colleagues about draft the budget's presentation very shortly so as to commence deliberation for its timely passage.

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