President Joseph Boakai has suspended the Governor of the Central Bank of Liberia, Aloysius Tarlue, following an audit of the CBL by the General Auditing Commission, according to information minister, Jerolinmek Piah.
The president's decision came in the wake of a release of a compliance audit report by the GAC detailing significant financial irregularities at the Central Bank of Liberia (CBL) during the period from January 1, 2018, to December 31, 2023. The findings highlight a range of compliance issues that affect the bank's operations.
The GAC observed that the CBL management exceeded approved expenditure limits from Fiscal Year 2018 to 2022 by approximately $19.31 million. The audit also found that the approved budget expenditure projections consistently surpassed revenue projections, indicating a pattern of deficit financing.
FrontPageAfrica, meanwhile, had Monday reported that Liberia was in danger of losing further assistance from the International Monetary Fund owing to a recent controversial decision by the Central Bank of Liberia to guarantee loans to two struggling banks under the guise of bolstering financial sector stability.
FPA learned that the sticky issue for the IMF and some international stakeholders is that the move was done without proper procedures.
The crux of the saga was triggered as far back as August 2020 when Sapelle International Bank Liberia Limited (SIBLL), sealed a deal to take over the GN Bank Liberia Limited, a member of the Group N'doum (GN), headquartered Ghana. That purchase was approved by the Central Bank of Liberia (CBL) recently to operate under the license as SIBLL.
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Similarly, in January 2024, Global Bank Liberia Ltd, another struggling bank was taken over by Bloom Bank Africa (Liberia) Limited (BBALL).
During the acquisition of Global Bank, Bloom uncovered the pending suit between Global and businessman George Kailondo Oil and Gas company. The bank insisted they would not purchase due to the pending lawsuit, prompting the Central Bank to step in and sign an MOU to indemnify Bloom if Global lost its legal case against Kailondo. The Supreme Court ruled for Kailondo against Global and awarded him US$2.3 million in damages with the cost of proceedings.
At the time, both purchases were seen as giving a jolt to two poorly-run bruising bad non-performing loans.
A Tricky Predicament
In a bid to mitigate the losses during their purchase transactions, the CBL went on to guarantee that it will cover some of the Non-Performing Loans and dole in millions to cover the losses on the FIB-GN Bank--SBLL loans.
Where it gets tricky is that the guarantee is not considered reliable, and SIB had already depleted its reserves to the CBL.
Regarding Global Bank, it was also poorly managed and had bad Non-Performing Loans, and court cases.
