Liberia: Laying the Ghosts of the Road Fund Diversion to Rest May not be Anytime Soon

Tweah, during an appearance on Spoon TV on May 24,noted that he received a nod of approval from some of Liberia’s development partners to divert US$25 million of US$50 million collected to pay salaries of civil servants. 

 

Since when has it become a rule that House and Senate Committees, whether acting jointly or severally, are clothed with the authority to approve changes in the Budget Law or better still to act on behalf of the Legislature without a joint Resolution of approval?

This is the question that Finance Minister Tweah, trying as hard as he can to explain the diversion of money from the National Road Fund, has failed to answer. The National Road Fund Act was passed into law in 2016.

The primary purpose of the Road Fund, according to the Act, is to finance road and bridge maintenance works and directly associated planning, programming and management activities.

It is self-evident in view of this provision that money in the fund is not in any form or fashion intended to finance the payment of salaries. And nowhere in the Act is there a provision allowing managers of the Fund including the Inter-ministerial Committee (IMC), headed by Finance Minister Tweah, to divert resources from the Fund to underwrite salary payments to civil servants or for any other purpose, save those spelled out in the Act establishing the National Road Fund Act.

More to this, the Road Fund is financed in part from monies appropriated in the National Legislature and is accordingly reflected in the approved National Budget which also includes outlays for the payment of salaries of civil servants and other public expenditures.

Once approved and passed, the budget becomes law. Any change(s), including amendments to the law, must be done with legislative approval — meaning the approval by both Houses in the form of a Resolution.

Finance Minister Tweah claims the diversion of monies from the Road Fund met the approval of the House of Representatives and the Senate.  Just how such approval translates into a Joint Resolution by both Houses, approving the diversion through an amendment of the Budget Law, is what the Minister has failed to explain.

He has maintained that in addition to approval by the Public Account Committees of both Houses, he received a nod of approval to do so from development partners, stressing that they understood it was a “one-off” deal meaning that such would not be repeated or become part of regular practice. 

In view of such seemingly hollow explanations, the public is left wondering whether the payment of salaries was/is not included in annual budget forecasts. 

It can be recalled that Finance Minister Tweah is on record for claiming to have raised the national budget from US$500 million to US$800 million which, in the view of seasoned economists, appeared quite unrealistic given the fact that over 60 percent of the projected US$800 million was/is to be derived from taxes paid by the ordinary Liberian.

Yet he persisted in his view which even some of his colleagues described as posturing. Now the reality has hit home with revelations from a General Auditing Commission (GAC) audit of huge diversions from the Road Fund which the Minister claims was done to pay salaries of civil servants.

And trying as hard as he can, it appears the Minister’s explanations/justifications have failed to convince a doubting public. This is in view of the yet unexplained but corruption marred US$25 million “Excess Liquidity Mop-up Exercise” held under the watch of Minister Tweah.

Now just why has the diversion of US$7 million from the National Road Fund under the watch of the Minister aroused such intense public concern as compared to the corrupt handling of the US$25 million “Excess Liquidity Mop-up exercise”? This is because, unlike the latter (the corruption marred Excess Liquidity Mop-up Exercise), the pinch is being felt directly by the people through the imposition of additional taxes on petroleum which goes or should go directly into the Road Fund.

Additional price increases on every gallon of petroleum imported into the country have meant increased hardships on the people, especially a rise in transport costs which invariably affects everything else. This means that Liberians are facing extreme hardships in the face of ever-rising prices of everyday (essential) commodities. 

This has left the public questioning whether the Road Fund is resourced only by taxes on every gallon of petroleum imported into the country. But the answer to this question is NO, according to the Act.

Under the Act sources of funding for the Road Fund is spelled out in Chapter Five Section 5.1 under the title, “Establishment of Sources of Funding” which reads as follows:

  1. It is hereby established that the Road Fund shall receive contributions from: 
  1. Monies collected from road user charges.
  2. Monies appropriated by the National Legislature of Liberia.
  3. Grants and loans arranged by Government to undertake specific programs, projects or works
  4. Monies received in respect of a loan obtained on behalf of the Road Fund
  5. e. Monies paid into the Fund from proceeds acquired through the sale of assets

Against this backdrop, and based on widely held public perceptions that the Road Fund is being resourced singly from the tax on petroleum, it is clear that the Public is generally unaware of sources of funding for the National Road Fund.

The question is, what prompted the ready diversion of monies from the Road Fund, given the fact that salaries of civil servants as well as Government of Liberia (GoL) contributions to the National Road Fund are all included in the National Budget?

Section 6.3 of the Act entitled “Disbursements of Funds” reads as follows:

  1. Disbursements from the Fund Account shall only be made in accordance with the approved Annual Road Maintenance Expenditure Program. 
  2. Payments of interim accounts and stage payments shall be conditional upon adequate evidence being presented by the implementing agency to demonstrate that progress on the works has been made in line with expectations.

Given all the above, it appears clear that Finance Minister Tweah acted in contravention of the law by arbitrarily but illegally making changes to the law without direct legislative approval expressed through a “Joint Resolution”. 

As it appears, Laying the Ghosts of the Road Fund diversion to rest may not be anytime soon.