Monrovia — In the wake the current worsening economic crisis in the country due to the drastic depreciation of the Liberian dollars against the United States dollar which is leading to the increase in the prices of basic commodities at the detriment of ordinary Liberians, there have been ensuing debates about adopting a single currency.
Dr. Somah Paygai, former head of the National Investment Commission (NIC), has joined the debate after making recommendations on Wednesday, July 11, 2018 at an event in Monrovia.
Dr. Paygai was one of four panelists at the one-day policy dialogue organized by the Governance Reform Commission (GC) under the theme "Factors Impacting Liberia's Exchange Rate Regime."
The event was held at the Lutheran Church Conference Hall on 13th Street in Sinkor and was organized by the graduate schools of the University of Liberia and the Cuttington University.
Governance Commission (GC) Acting Chairman Dr. Othello Gongar in remark to declare the forum officially opened stated that prior to the holding of the 2017 Presidential and Legislative Elections in the country the GC released an annual report that reflected on the economic atmosphere during the election period so that competing candidates can look at the economic situation in which the election is to be held.
"The political transition in the country has taken place and what the country is facing now is economic transition and today we have invited Liberian financial experts to come together and look at factors impacting our economy," said Dr. Gongar,.
Mute on recognizing either of the two currencies, Dr. Paygai who spoke on the topic: The dual currency regime& the global financial outlook the implications on the exchange rate regime, stated that Liberia is in trouble with the dual currency system as the current exchange rate between the Liberia Dollar and that of the United States Dollar stands LD$160 to 1 $USD.
Dr. Paygai continued that Liberians find themselves grappling with trouble of a dual currency system.
"The trouble with any dual currency system whether bi-metallic or bi-paper or mixed is that either the rate of exchange between the two currencies is determined by the market, depending on what can be done with either currency and how," said Dr. Paygai.
Commenting on the risks of too much money is in circulation, the former NIC boss indicated that when the supply of money is greater than the demand then the money loses its value.
"If the government simply printed more money when they needed it, that money would be worthless in the global market, this would make your economy less competitive," said Paygai, who also added that if each dollar has less value, then the business owner has to change more to make any real profit.
According to Paygai, the structure and system of managing the economy must be overhauled to improve accountability, transparency and efficiency and make fiscal policies relevant and supportive of national economic and social development.
He added that there's need for government to consider recommendations by the Governance Commission on rationalizing and continued restructuring of the economy.
Paygai, who is now the Vice President for Administration at the African Methodist Episcopal University (AMEU) on Camp Johnson Road, stressed that the entire World has become one big village where access to markets of different countries are enabled and expedited by improved technology in banking and financial services.
He warned that countries cannot achieve any appreciable level of economic progress with an outdated financial system.
"There is an urgent need to accelerate the pace of the monetary sector reform to liberalize and integrate our financial services into the international financial systems and capital market, to that end, the restructuring of the central monetary authority and using one currency," Dr. Paygai added.