The Ministry of Finance has taken a major step in an effort to decentralize its treasury functions across the country, particularly in rural Liberia.
The Ministry signed a memorandum of understanding(MOU) with a local bank to operate cash centers in two counties.
Finance Minister Amara Mohammed Konneh last week disclosed that he had signed the MOU in Monrovia, authorizing the Afriland First Bank to operate the cash centers in River Gee and Grand Kru Counties.
According to Minister Konneh, the MOU is part of an overall effort of the government of Liberia—through the Finance Ministry—to expand fiscal operations at the county level, by taking services to grass-root communities, in order to encourage growth and development across the country.
The Finance Minister also noted that the MOU exemplifies government’s plan to decentralize some of its treasury functions in the counties, in a bid to improve their capacity for fiscal decentralization as planned.
Currently, out of 15 counties, only nine are served by either commercial banks or the Central Bank of Liberia. As a result, the Ministry of Finance charters United Nations (UN) flights on a monthly basis to deliver salaries to government staff working in those areas.
To solve this problem, the Finance Ministry has started to construct cash centers in some of the counties. The first step in this direction was taken by President Ellen Johnson Sirleaf in Gbarpolu County. in July last year.
The primary objective of the cash center is to enable civil servants conveniently and timely access their salaries, a Finance Ministry statement said.
However, the cash centers need to be operated by a professional team; therefore, the offer to the commercial banks to partner with the government in operating the centers for mutual benefits is crucial, as paying civil servants in these areas of employment increase their purchasing power.
It was in this light that the Finance Ministry sought the partnership of commercial banks for the provision of cash services and other related banking services in Grand Kru and River Gee Counties. Afriland First Bank, a legally registered banking institution in the country, expressed interest in the cash center activity.
Afriland First Bank is a hybrid (deposit-taking and agriculture) banking institution. It is expected that the MOU inked between the Finance Ministry and the Bank will help to empower the local people through the provision of loans and other financial services. The government of Liberia will, this paper has learnt, use the Bank for revenue deposit and will partner with it to foster timely payment of civil servant salaries.