Liberia: Senate Concurs on US$806.5M Recast Budget

The Senate finally concurred with the House of Representatives to approve the recast budget of US$806.5 million budget, with recurrent expenditure chopping a massive chunk of the budget — leaving limited capital investments — investment towards infrastructures and other assets that are crucial for rapid economic growth and development.

The Senate vote came nearly two weeks after the House had, in a hurried manner, approved the recast budget for the fiscal year 2022 as submitted by President George Weah without any public scrutiny. 

But the Senate, before concurring, requested its Joint Committee on Ways, Means, Finance & Budget as well as Public Accounts and Audits to look at the budget and advise the body for action, which they did in a report yesterday.

The Senate voted in the majority to concur with the House on the budget’s adoption; however, Senators Abraham Darius Dillon and Nyonblee Karnga-Lawrence voted against the bill's passage, while the two Gbarpolu County Senators — Daniel Naatehn and Botoe Kanneh — abstained.

The budget's approval was also preceded by a budgetary hearing in which the Finance Ministry authorities and the Liberia Revenue Authority responded to some unresolved issues about the various allocations.

While the recast budget is not law until signed by the President, its values reflect a net upward adjustment of US$20 million or 2.9 percent over the originally approved budget of US$785.5 million. The extra fiscal space was yielded through internal reprioritization of existing programs, identifying additional resources, as well as a World Bank Loan and additional funding from the mining sector.

“The restatement is necessitated by the need to address urgent and unforeseen national expenditure demands through reprioritization of the country spending plan,” Weah said in a communication to House when submitting the recast budget.

The budget, according to Weah, has an upward adjustment of US$20 million that will be added to a reappropriation amount of US$21.3 million, to sum up the total available of US$41.3 million. The submission came as the Liberian economy seemed to be on track to meet its objective of 4.5 percent growth in 2022, up from 4.2 percent in 2021, and likely to be driven primarily by increasing activity in both the mining and non-mining sectors (agricultural, manufacturing, and services). 

However, a large portion of the US$806.5 million budget is allocated to recurrent spending — wage arrears, goods and services, and public debt payment — leaving insufficient capital investment for infrastructure and other assets that are critical for rapid economic growth and development.

A significant driver of recurrent spending as it relates to the government budget is its massive wage bill. Recurrent expenditure, as per the draft recast budget is estimated at US$648.5 million, while expenditure for the public sector or capital investment is US$158 million. 

This expenditure is expected to focus on pension for retired civil servants, subsidy for the provision of electricity, and repayment of a foreign obligation, which has fallen due.

Other priority areas are the completion of the 15th Judicial Circuit Court Complex in River Gee County and the 3rd Judicial Circuit Court Complex in Sinoe County and funds for Solid Waste Management and funding for the government at-risk youth program.