Monrovia — Barely a week after the Board of Directors of the Liberian Bank for Development and Investment (LBDI) accepted the resignation of its President/CEO Deo Z. Delaney over reported inaccuracies in his academic qualifications supplied to the recruitment firm, the International Monetary Fund (IMF) is expressing deep concerns over the decision, which put the brakes on major reforms Delaney was undertaking, particularly regarding delinquencies on loans.
Mr. Christoph Klingen, IMF Mission Chief for Liberia, made his reservations known in a letter to Finance and Economic Planning Minister Samuel Tweah and Central Bank of Liberia Governor Aloysious Tarlue, dated December 9, 2022, and in the possession of FrontPageAfrica.
A Major Setback
In his communication, Mr. Klingen notes that the reform of the LBDI has been a key plank of the IMF program and that IMF resources were channeled toward LBDI's US$31 million recapitalization, and the Executive Board of the IMF concluded program reviews based on the completion of critical reform steps, including the appointment of a new management team to turn the bank around.
Therefore Mr. Klingen believes that the recent resignation of Delaney hurt the gains that were being made. "That the only recently-appointed CEO was asked to tender his resignation is therefore a major setback, especially as it comes just as when he embarked on a high-profile program to recover non-performing loans (NPLs) and was about to arrange a fresh audit of LBDI's books."
While heralding Minister Tweah's reforms at the Finance Ministry, the IMF said mission chief recognize that the implementation of important reforms that will improve Liberia's economy over time comes with hard work and often an uphill battle against the status quo.
Mr. Klingen averred that given the pivotal role of financial stability, the protection of public finances and promotion of good governance in the IMF-supported program with Liberia, it would be difficult to conclude current program review without these setbacks being adequately addressed.
Reinstated Deo, IMF Says
Said Mr. Klingen: "With the LBDI's management team depleted, it would be important for the Central Bank of Liberia (CBL) to immediately reinstate a resident supervisor to safeguard LBDI's balance sheet.
Mr. Klingen encouraged both the CBL and the LBDI board to immediate undertake the prompt recruitment of a new CEO in line with best practices or the reinstatement of the previous one is an obvious priority, but the audit must not be held up over a change in management. "The CBL should as soon as possible commission a full and expeditious financial audit of LBDI's books by an internationally reputable audit firm, with the understanding that further in-depth investigation will follow as warranted. An NPL recovery with a focus on largest delinquent borrowers is now more important than ever to dispel the notion that well-connected borrowers are shielded from enforcement. It needs the full baking of LBDI's board, the publication of key information and updates on progress, and the deployment of the full range of sanctions for non-cooperating delinquents, including their exclusion from access to banking services as provided for under CBL directive."
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The IMF mission chief said the monetary body stands ready to further discuss and elaborate the next steps with authorities in putting the reforms Delaney was making back on track.
Last week, the LBDI board issued a statement announcing that Mr. Delaney had tendered his resignation which was been accepted by the board.
The Board's decision followed an online investigation by Blogger Martin Kollie, alleging that the LBDI CEO had lied on his credentials presented to the board at the time of his appointment.
The Board acknowledged said it had engaged the services of a recruitment firm to search for suitable candidates for the position of President/CEO of LBDI and that exercise identified Delaney as a suitable candidate for the position.
