Liberia’s Finance and Development Planning Minister Amara Konneh has drawn attention to what he considers a relatively long-term stabilized exchange rate between the Liberian and US dollars and the steady prices of the country’s stable food amidst the Ebola crisis which has crushed the economy.
Minister Konneh said an amicable relationship with the Central Bank of Liberia (CBL) caused the windfall of support to stabilize the Liberian economy, thus the exchange rate has been reduced to US$1 to L$84 for over three months.
He made the statement over the weekend at the Liberia Institute of Public Administration (LIPA), during the closing ceremony of an orientation for 24 newly recruited directors of the Ministry of Finance and Development Planning (MFDP) in strategic leadership and management in the public sector.
The intensive week-long orientation from November 3 to 7 was part of the new recruits’ 90-day probation and their academic and criminal records checks required by the MFDP. It was also intended to stimulate the new directors in the public sector reforms of the country.
Minister Konneh said the encouraging fixed exchange rate in recent times is having a favorable impact on the Liberian economy along with the accompanying balanced prices which tend to lessen the economic hardship for many Liberians, most especially ordinary Liberians, in spite of the shock to the economy.
Prior to the outbreak of the pandemic, the exchange rate was soaring at US$1 to L$92, and some economists, including President Ellen Johnson-Sirleaf, blamed the Ministry of Finance and Development Planning and the Central Bank of Liberia for the stress that the banking sector was undergoing and the soaring exchange rate.
The President indicated that the lack of or the absence of full cooperation between the Ministry and the Bank had created stress in the banking system and the depreciation in the Liberian dollar.
It may be recalled that the Ministry of Finance allegedly accused CBL Governor, Dr. Mills Jones, of infusing over L$8 million into the economy. This infusion led to the depreciation of the Liberia dollar, according to some.
The CBL boss vehemently denied this accusation while the Finance Ministry also stated that Minister Konneh never made such a statement.
However, the accusation triggered a war of words between the two top government finance officials and their entities.
Minister Konneh told the 24 Directors that the Liberian economy, which is largely import-based, is experiencing a serious economic set-back since the Ebola outbreak in West Africa. However, it took the coordination of the Finance Ministry and CBL to ensure that the exchange rate remained stable and prevent any hikes in prices, said Minister Konneh.
Since August a half bag of rice (25 kg) is L$1,500 (US$17.86), while a whole bag (50kg) is L$3,000 (US$36);
The fight against the Ebola virus amid the bad economy has caused Liberia’s fiscal policy makers to solicit support for not only containing the Ebola outbreak, but for stabilizing the Liberian economy and the post-Ebola recovery efforts.
Following meetings with officials from the World Bank, the International Monetary Fund, the African Development Bank, the Millennium Challenge Corporation, the US State and Treasury Departments and Swedish governments, and other bilateral partners, more support has been secured and other funding in the pipeline could be accelerated soon.
Speaking in an exclusive interview with reporters following his return from Washington DC, Minister Konneh said “The trip was a big success for Liberia and we hope to remain engaged on all the many fronts and issues we have initiated in the US. First and foremost, we now have the whole world community united to help us not just fight Ebola, but maintain political and economic stability, drive growth and address the cascading effects of this crisis”.
Minister Konneh was joined in the US by Central Bank Governor, Dr. Mills Jones, the President of the Liberian Bank for Development and Investment John Davies, Representative Munah Pelham-Youngblood, a member of the House’s Committee on Banking and Finance, and other officials of the Ministry of Finance and Development Planning and the Central Bank of Liberia.
Minister Konneh said he was particularly delighted with the scale of strong coordination among the economic actors in the government and goodwill from development partners to assisting Liberia during this emergency period.
“We feel very fulfilled and satisfied with the gains we have made on this journey. We will continue to work with all stakeholders inside the government to strengthen coordination and follow-up on all these issues, discussions and goodwill once we are back in country and we are very positive, Liberia will turn the corner. The key is to remain disciplined, focused and encouraging teamwork,” Minister Konneh said.