Liberia: Did Central Bank Collect Taxpayers' $7m Based On Fake Loan?

Specimen of the new LD 500 banknote.

What is Liberia's total debt? Or what makes up Liberia's total debt? President George Weah Administration is providing limited information on Liberia's debt. For instance, the government has not published any data on debt to show why and how it reduced its total debt to Gross Domestic Product (GDP) ratio from 35% in 2017 to 26% in 2018. (See an article called "A Rejoinder to Sam Jackson 11/06/18 Article" by J. Yanqui Zaza). This is important because Liberia might find it difficult to borrow money if it reaches the benchmark of 38% (Total Debt/GDP).

Even if Liberia were to begin using more than the 38% of GDP to pay its debt, the money missing stories will continue to overshadow Liberia's debt burden. And so yes, news reports have focused on different money missing stories; the US $104M, allegedly missing, the US$25M to be accounted for, the US$3M donor funds misallocated. Other stories focus on the lack of money to pay teachers, limited funds to provide fuel oil for Offices of the Liberian Lawmakers, etc. Also, social media is flooded with information about government officials accumulating wealth at the expense of society.

Well, government officials are adding their versions of the money missing story, therefore, leaving limited space for news reports on debts. For, example, President George Weah, on two different days, spoke about the money missing issues. On one of those days, June 23, 2019, according to FrontpageAfrica, the writer stated that "... President distanced his government from the 'missing' L$16 billion saga, saying 'it all happened in the past regime... our government is only correcting the wrongs."

Predictably, multinational corporations are pleased that the public is not focusing on why the country with enormous resources continues to borrow more money even after money-lenders cancelled Liberia's $4.7B debt in 2010. Had Liberians studied their country's debt they would have understood how to increase revenue, how to deter and prevent bribes offering, and why Liberia accrued interest expense portion of the $4.7B was higher than the principal?

A review of our debt would also help Liberians to understand that Liberia's current amount of the so-called rainy-day money reserved to pay debt, stabilize the economy, etc., is not real money, but Special Drawing Rights (i.e., credit card or a privilege to borrow money) controlled by the World Bank. Although Mrs. Sirleaf inherited $6M cash in 2006, Liberia held a negative cash balance of $136M (L$17B at an exchange rate of 125) at 2017. President Weah increased the negative cash position of $336M (L$43B at an exchange rate at 158). (See page # 50 of 2018 CBL Financial Statement).

Yet, former President Ellen Johnson Sirleaf and President George Weah had, boastfully and deceptively, announced that Liberia had US $155M and US $162M as rainy-day-money in 2017 and 2018 respectively. The practice to use "a privilege to borrow money" as a rainy-day-money began in 2009, as per CBL's statement. "As at end-December 2009, the CBL's net foreign reserves position rose to US$269.0 million, from US$49.4 million at end-December 2008, due mainly to an increase in holdings of Special Drawing Rights." Arguably, officials would not have negotiated new loans if Liberia had implemented since 2014 some of the recommendations outlined within the two reports. The first US $100M debt was given by the International Monetary, the CBL $200M loan was reported within the Central Bank 2018 Audited Financial Statements, and the third $200M debt was approved by the World Bank.

Let us review the CBL $200M debt. This is because the $200M debts is an increase of CBL's Accounts Receivables, but no cash and/or cash-equivalent was given to the government of Liberia in 2018. The increase is the difference between L$34B (2017) and L$71B (2018). Accounts Receivables, as per Note # 16 on page # 11of the balance sheet of the 2018 Audited Financial Statements.

CBL reported item # C and item # E as notes explaining the $200M increase mentioned in Note # 16 on page 65 of the 2018 Audited Financial Statements.

1) Due to IMF -C- L$8.8B, which is US equivalent of US $60 million.

2) Other Receivables -E- L$26.6B, which is US equivalent of US $196 million.

However, there is a shortfall of US $85M (US $164M minus US $79M) in the amount mentioned under item # E.

a) The amount for E-(1) was US $17M: CBL wrote, "The bank was required to use its foreign reserves for the exercise and the Government agreed to refund the foreign currency used for the exercise. The bank has recognized the US$17 million it used as a receivable from the Government and it is include in Other receivables."

b) The amount for E- (2) was US $62M. CBL wrote, "Following the reconciliation of the bank's Clearing Settlement and Clearing Suspense accounts, an amount of US$ 62 million was debited to Government of Liberia to reflect unrecorded amounts in the Government account. This is also included under Other receivables.

Did a professional certify the increase in Accounts Receivables if the increase was an-in-house created assets? Or, which CBL's Account was credited to match the $200M debit to CBL's Accounts Receivables? Most importantly, what are the benefits to CBL and Liberia for increasing CBL's Accounts Receivables and increasing Liberia's debt?


CBL, in 2018, collected $7M more in interest income based on government's debt such as Accounts Receivables. (See Page # 63 of the 2018 CBL Financial Statements).

CBL has improved its liquidity Gap because the increase in CBL accounts receivables did not have a corresponding liability. (See page # 46 of the 2018 Audited Financial Statements).

Liberian Government

Liberia can increase its non-cash/non-cash-equivalent rainy-day-money (Liberia's International Net Foreign Exchange Reserves) by using the total L$71B to calculate its International Net Foreign Exchange Reserves.

In any case, why would the World Bank and IMF, institutions that pride themselves for transparency, say nothing about an in house-created assets by a subsidiary of a bankrupt parent (i.e., Liberia)? What are our lawmakers saying about CBL increasing its assets without evidence, if they have reviewed the Financial statements? Would such a practice not encourage employees to undertake questionable activities, including, but not limited to fraudulent activities?

As at end-December 2009, the CBL's net foreign reserves position rose to US$269.0 million, from US$49.4 million at end-December 2008, due mainly to an increase in holdings of Special Drawing Rights (SDRs). Page # Xv of the 2009 CBL Annual Report.

2018 Central Bank of Liberia Audited Financial Statements

2018 Central Bank of Liberia Annual Reports

2009 Central Bank of Liberia Annual Reports

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