-Policy to affect Legislature and Judiciary
The Liberian Government on Monday October 26, 2020 launched a new Fiscal Calendar year, which is expected to run from January to December, replacing the one currently spanning from July 1 to June 30.
The change in the fiscal calendar follows an amendment in the country's Public Financial Management (PFM) Act of 2009 by the Liberian National Legislature in 2018-two years ago.
In 2018, the National Legislature enacted the Amendment and Restatement of the PFM Act of 2009. In section 4.16 of this revised PFM Act, the Liberian Legislature defined the new fiscal year to run from January to December.
To be able to run this calendar, the members of the legislature indicated that a six month budget be prepared, in this case for July to December of 2021. After which a budget spanning from January 2022 to December 2022 is expected to be submitted to the National Legislature by September of 2021.
The new policy measure if implemented correctly, will put Liberia on par with the rest of the countries in the West African sub-region that are seeking a convergence of a common currency.
Making a remarking at the launching ceremony on Monday, Finance and Development Planning Minister Samuel Tweah notes several advantages in the policy change.
He states that the policy change would end the awkward process of having Liberian presidents reporting revenue and expenditure numbers annually to the National Legislature over two fiscal years.
Under the current fiscal regime, the President is constitutionally mandated to report revenue and expenditure figures with two fiscal periods, since the first begins in one year and ends in another.
According to Tweah, such practice is not ideal since two fiscal years may have different policy considerations that may inform revenue and expenditure patterns.
However, with this new policy, the President would be able to report on the period running from January to December and that will make his reporting figures consistent with policy implications accruing under one fiscal period.
Tweah further notes the new fiscal calendar "brings Liberia into alignment with ECOWAS countries, particularly since the community is transitioning to a common currency area".
He indicates that ECOWAS has repeatedly flagged Liberia's July to June fiscal year as a serious problem that had impeded the convergence program and that it had to be remedied for purposes of achieving symmetry in the multiple processes being pursued under disparate ECOWAS protocols.
The Finance and Development Planning Minister argues that the new fiscal policy measures also align with the fiscal year of the Central Bank of Liberia, which runs a January to December calendar.
"So one can clearly see the cornucopia of confusion the July to June calendar exacts in the same country and region. Of course the CBL, has been able to run a January to December process because it obviously does not require any legislative approval," he further argues.
However, Tweah was quick to point out that this policy change also come with its own disadvantages that poses serious risks which need to be managed effectively.
He says one of the risks is the switch is out of sync with the legislative calendar. Members of the Liberian Legislature are require to pass the budget before heading for recess. Under the current budget law, the budget must be submitted by end April, giving legislators three months to consider the budget before June 30.
The new policy now requires that the budget be submitted by end September, giving the the Legislature October to December to consider passage.
This, Tweah notes would mean that legislators would probably and practically be required to change their legislative calendar. "This is a huge issue that requires serious engagement and the President has shown strong willingness to lead this engagement with the lawmakers," he says.
But not just the lawmakers that would be affected by this new budget law, the Judiciary Branch too with its unique schedule would be seriously imparted.
Tweah opines that the new policy will also demand greater level of work because the budget process would come at the time Liberians will be preparing for the Christmas holiday.
He bemoans the timeline for the transition saying it appears tight, adding that an active engagement of all stakeholders needs to commence immediately after the formal launch of the transition process.
He says President George Weah is ready to lead a high level engagement with leaders and stakeholders from the three branches of Government with aim to both accelerating and smoothing out the transition.-