19 March 2014

Liberia: 'CBL Not Dishing Out Money'

The Governor of the Central Bank of Liberia (CBL) has reacted to criticisms that the bank is dishing out huge sums of money to institutions and individuals.

There are reports that Governor Jones is distributing money to marketers and institutions to boost his presidential ambition ahead of the 2017 elections.

However, Governor Jones said the bank is not giving out money as claimed by those he called 'detractors.'

He said whatever the bank is doing is in line with its functions and mandate required by law.

Addressing a news conference Tuesday, Governor Jones said the bank has not been giving loans directly to business entities as being speculated in some quarters.

He said commercial banks are involved in all of the bank's initiatives, "and they were consulted on many occasions before these initiatives were launched; to clarify, the CBL has not been making loans to individual businesses."

"Let me refer to a paragraph in the agreement on the placement/deposit with the banks on due diligence; the name of bank commits itself and undertakes to exercise due diligence in assessing the creditworthiness of all potential borrowers consistent with its lending practices; shall ensure that loans from the placement shall be made to only credit worthy Liberian-owned small and medium enterprise," Governor Jones said.

The CBL Governor said not only were these "agreements notarized, they were also duly probated and registered at the Probate Court of Montserrado County.

"Does this look like an operation of the Executive Governor dividing public fund?" he asked.

He said the agreements state clearly that the CBL will make automatic debits to the accounts of commercial banks with the CBL covering interest and principal.

Governor Jones said the first US$5 million deposited for three years to help promote lending to Liberian-owned businesses in December 2010 was received with interest by the CBL on December 31, 2013.

He said many of those who are raising concerns about the CBL's loan scheme have already been told about what the bank is doing.

"We should all be worried when people, some in strategic positions, see economic empowerment of the Liberian private sector as politics," he noted.

Commenting on the country reserve, Governor Jones said there is no evidence that points to the misuse of Liberia's reserve.

Governor Jones said under the Reserve Management Guide which was developed by the Board of Governors, neither the Executive Governor nor any Deputy Governor can just go dipping into the reserves of the CBL.

He pointed out that the country's foreign reserves are not the government revenues deposited at the CBL, noting that "the CBL does not touch government revenue except upon instructions from the Ministry of Finance to make payments on behalf of the government; so those who talked about the CBL using taxpayers' money for its purposes are just simply wrong.

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