The Executive Governor of the Central Bank of Liberia (CBL), Milton Weeks, has assured Liberians that the bank will pursue macroeconomic stability characterized by low inflation and a stable exchange rate.
Gov. Weeks said there is also a commitment to ensure increased access to financial services in all parts of the country and also to support the expansion of credit towards the productive sector of the economy, especially the agriculture and manufacturing sectors.
The CBL Governor made these remarks yesterday at the start of a week-long national workshop on Economic and Financial Analysis for media practitioners and Legislative Budget Officers in Monrovia.
He said additional steps will be taken with relevant parties to strengthen the legal environment to address some of the existing constraints that threaten the safety, soundness and integrity of the financial system.
“We will continue to work cordially with all other government entities to champion the national agenda. I am aware that experts and practitioners have been assembled to share this knowledge, skills and experience with you on the topic,” he added.
Governor Weeks used the opportunity to briefly mention a few salient issues relating to the subject matter.
He said economic analysis is a systematic approach to the determination of the optimum use of scarce resources, involving comparison of two or more alternatives in achieving a specific objective under given assumptions and constraints.
At the macroeconomic level, he said economic growth, stability, inflation, unemployment and external balance constitute some of the leading issues for which economic analyses can be undertaken.
Therefore, he said economic and financial analysts must be armed with adequate knowledge of the subject; that they must be versed in issues such as cost-benefit analysis, economic impact analysis, trade policy analysis, economic development and growth analysis. Others include basic knowledge in macroeconomics, interpretation of financial indicators, the role of statistics in economic analysis, budget analysis, fiscal and monetary policies, financial, money and capital markets.
He stated that the important aspect of economic and financial analyses concerns government policies and plans which affect the economy in various ways; that policies and plans adopted by the government at various levels are responsible for shaping the economy and must go through analysis and scrutiny.
“A great challenge in economic and financial analyses especially in our sub-region is the dearth of knowledgeable professionals. The tendency is that all and sundry have assumed the ability and responsibility of analysing and commenting on government economic and financial policies.
“Most of the time some of these analysts undertake their analysis without understanding the basic economic theoretical underpinnings of the policies,” he said.
“Others go on to analyze without digging deep into the facts available to government functionaries, who inform the adoption of such policies and planning for such projects and programs in the first place. This sometimes results either in under-reporting or over-reporting of government policies and programs.”
He said another challenge is the need for timely, accessible and quality data dissemination for economic and financial analyses and policy implementation, and that more timely and reliable data is needed in several key areas, such as the gross domestic product, inflation rates, unemployment rates, external sector and the financial sector.
In the external sector, timely and reliable data is, for example, required for addressing “debt sustainability” (potential currency crises) by focusing on external positions, external debt and reserves; while in the case of financial sector soundness, for example, focus should be on developing macro prudential indicators.
Being an economic and financial analyst requires professional skills, so that the output would not only be accurate but also reliable, he said.
Failure to appreciate the importance of stakeholders often leads to poor collection, compilation and dissemination of economic and financial statistics, thereby rendering the corresponding economic and financial analyses spurious.
Governor Weeks said: “To this end, this course is timely and very important. Since 2008 to date, the overall global economic outlook has been characterized by unsteady growth across the advanced economies, the emerging market economies, developing economies as well as the least developed economies.”
Against this backdrop, the Central Bank of Liberia, through enhanced policy coordination and harmonization with the Ministry of Finance & Development Planning, has been working along with other stakeholders to institute key economic policies to recuperate the economy from the various shocks, he added.
He said the CBL has continued its efforts to support the economic growth and development of the economy, including working to develop the payment system, intervening in the real estate sector through credit easing, especially for the rubber and housing sector, and rolling over some microfinance facilities, while introducing various financial services.
“Given all that have been said, it is very important to have individuals considered as analysts with the expertise and knowledge to interpret as well as explain to our stakeholders and our citizenry, the policy initiatives aimed at ensuring we continue to have a stable and sound economy,” said Weeks.