Budget Stalemate Looms

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The Business Desk of the Daily Observer has learnt with dismay of an unprecedented plan by some members of the National Legislature, particularly the House of Representatives, to hold the draft 2014/15 fiscal budget hostage and delay its passage into law until the Liberian Senate can agree to their demand to inject US$73 million district development fund in the budget.

The Senate and the House of Representatives are strongly divided over the US$73 million bill introduced recently by House Speaker Jenekai Alex Tyler, which they [members of the House of Representatives] overwhelmingly endorsed a few weeks ago.

Fear is mounting among government officials, mainly civil servants, over the unlikely possibility of the smooth passage of the 2014/15 draft budget as key members of both houses continued to fiercely attack and oppose each other.

Some civil servants have already expressed fear what could delay in the payment of their salary if the debate drags on. The Public Financial Management Law allows the Executive Branch to expend 1/12th of the total budget envelop of the last budget if the lawmakers delay.

But many people feel that the 1/12th may be insufficient to settle most of the issues the government would want to tackle during that period. Two senior members of the two houses anonymously told our business desk last week that their respective houses are bent on holding their grounds; thus creating further fear that the road to enacting the proposed 2014/15 fiscal budget into law is rocky.

According to Capitol Hill sources, the Liberian Senate and the House of Representatives are still far from resolving their impasse over the latter’s decision to inject the US$73 million budget exclusively for district development.

Economic analysts have, however, called for quick resolution of the stalemate and warned that delaying the passage of the budget would further injure and pose fresh threats to the already suffocating economy. The Executive Branch remains silent on the ongoing wrangling among the two houses on Capitol, but Executive Mansion sources have hinted that President Ellen Johnson Sirleaf is deeply worried about the brouhaha.

“The President is deeply worried about this ‘issue’ because an attempt to delay the passage of the budget would directly undermine government’s deliverables and generally affect the overall performance of the economy,” this source said.

In their recent sitting, the House of Representatives overwhelmingly voted to appropriate US$1 million for each of Liberia’s 73 districts.

But the Upper House, the Liberian Senate, rejected the Lower House’ decision citing fear of lack of proper management of the fund and resource constraints on government, amongst others. The House of Representatives has, however, responded in a dissimilar faction vowing not to succumb to the Senate.

At one of their regular sessions recently, nearly all 73 members of the House vocally vowed to ensure that US$1 million is appropriated in the budget for each before they can vote on the draft Budget Law. The US$73 District Development bill is sponsored by House Speaker Jenekai Alex Tyler of the ruling Unity Party (UP) who is strongly backed by a host of lawmakers.

Speaker Tyler has defended his bill noting that it is intended to vividly decentralize development at the district levels. Tyler recently told journalists that it is sad on the part of the Senate to reject the bill.

In compliance with Section 11.1 of the PFM Law, the Executive Branch submitted the draft fiscal 2014/15 budget to the National Legislature last month for approval.

The budget is to the tune of over US$557 million, but it doesn’t include the US$73 million being debated at the legislature. In her budget statement, Liberian President Ellen Johnson Sirleaf called on the lawmakers to observe a period of “national sacrifice for better efficiency” as they allocate available resources.

“This draft Budget calls for a period of national sacrifice – a sacrifice that calls for better efficiency in the allocation of available resources – as government combines aggressive revenue generation with careful debt management and scaled up spending in security, energy and the road network,” President Sirleaf said on May 21.

In the draft 2014/15 budget, the Executive Branch has proposed a drastic slash in regular costs of running ministries and agencies and savings moved into key public investment programs such as roads, ports, health, education, technology and security, amongst others.

It proposed millions of dollars cuts in expenses such as cars, fuel and lodging and limits official travels of government officials requiring them to fly economy class.

As the last cycle of spending under the government’s rigorous three-year development plan encapsulated in the Medium Term Expenditure Framework (MTEF) which was introduced in 2012, Ministry of Finance insiders have noted that the draft budget does not have the needed revenue envelop to finance other development plans such as the district development program at least for now.

The draft budget was developed after several months of consultations and hearings with all spending entities including the National Legislature. It is 4 percent higher than the updated projection of the 2013/14 budget of US$486 million. The budget is, however, 12 percent below the 2013/14 budget.

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