Liberia: The AG's Advice Does Make Sense

12 November 2019

Liberia's Auditor General, Mrs. Yusador S. Gaye is warning against printing of new Liberian banknotes for now, "becauseit will accordingly have an adverse consequence on the economy and the people." The AG's view is against recent request from the Executive to the Legislature to approve the printing of whopping 35 billion new Liberian currency notes to be placed in circulation immediately.

AG Gaye has reportedly written both House Speaker Bhofal Chambers and Senate President Pro-Tempore Albert Chie, warning, "I am strongly of the opinion that giving your approval to print more currency is unfathomable, but will be very misplaced, granted we are yet to understand all what happened at the last currency printing, as evidently, the US$25 million mop-up exercise does not engender much confidence in the Central Bank of Liberia (CBL)."

We believe the Auditor General is being very bold and frank to the Legislature in making sure it does the right thing not only in the interest of the ruling Coalition government, but for posterity. Politics aside, how this administration handles currency matters in the country could have serious adverse effects on the economy particularly, in the long-run with inflation likely to hit three digits or beyond.

More so, the caution is expedient because the Central Bank is yet to address lapses in its operations, as observed by the Kroll's Scoping Report and the Presidential Investigation Team (PIT) respectively. Kroll had asked the CBL to reconcile its vault balances and maintain constancy in its financial department, while the PIT is concerned about security for the protection of reserves, among other operational standards.

And then there are lingering questions about the US$16 billion printed and brought into the country besides the US$25 million taken from the reserves to mop up excess liquidity in the economy. In other words, Liberians are apprehensive that if these lapses remain business as usual and the government proceeds with the printing of new banknotes, the economy would further wallop in a vicious cycle.

Kroll's Scoping Report details that documentation provided by Crane Currency AB showed a total of LRD 15.506 billion was shipped to Liberia between period of July 2016 and March 2018 as follow: LRD 5,146,250,000 (USD 45,883,113) was documented as being shipped by Crane AB to Liberia in respect of the LRD 5.0 Bn Contract. LRD 10,359,750,000 (USD 92,365,817) was documented as being shipped by Crane AB to Liberia in respect of the LRD 10.0 Bn Contract.

Question is where is the LRD10, 359,750,000 documented as being shipped to Liberia in March 2018 under the George Weah Presidency in respect of the LRD10.0 Bn Contract signed with Crane AB? The Ministry of Finance and Development Planning Samuel Tweah claimed no money went missing, insisting that all Liberian banknotes printed and brought to the country were deposited in the vaults of the Central Bank of Liberia, an assertion which former CBL Executive Governor Nathaniel R. Patray corroborated.

But how come the economy is experiencing a serious shortage of banknotes so much so that depositors can't withdraw their money saved with various commercial banks in the country? The authorities should provide some explanations before printing and putting new banknotes in circulation.

We believe it is based on these glaring lack of transparency and accountability that Auditor General Gaye is cautioning against the printing of new Liberian currency for now, until the doubts and concerns are addressed or else, the country risks falling further down the economic ladder, which no patriotic Liberian wants to see.

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