Liberia: Tweah Justifies Violation of Road Fund Act

Minister of Finance and Development Planning, Samuel Tweah.

— Says the government acted lawfully … “and the road fund is the government’s money and when the government faces challenges, it can decide on how to solve them.” 

The Minister of Finance and Development Planning, Samuel Tweah, has cited extreme economic conditions as a significant factor that forced the government to use the US$25 million, which was earmarked for the National Road Fund (NRF) for a different government function.

The usage of the fund, which Tweah is now justifying, violates Chapter 2.2 of the Act establishing the National Road Fund, whose source of revenue is levied collected from motorists to construct and maintain roads across the county. The Act states that “All funds of the NRF shall be held in the Fund Account from which disbursement shall be made solely to finance the approved annual road maintenance expenditure program and directly related costs as hereby required in this Act.”

The act, among other things, states the primary objective of the Road Fund is to ensure that the country’s road assets are sustained and maintained periodically from funds collected from the levies — which cannot be diverted for any purpose — except to fix roads.

The revelation of the unremitted US$25 million was contained in an audit of the fund by the General Auditing Commission for two fiscal years, July 1, 2018, to June 30, 2020, which observed that millions of dollars of petroleum levies paid by motorists for the maintenance and rehabilitation of roads in Liberia were not being used for the intended purpose.

The GAC report noted that the Liberia Revenue Authority collected US$53,018,871.54 and deposited the money in the Consolidated Fund Account instead of the National Road Fund Account, as required by the Road Fund Act. 

The Consolidated Fund Account is the Government general revenue account that is controlled by the Ministry of Finance and Development Planning (MFDP). Of this amount, according to the report, the MFDP remitted US$28,152,231 to the National Road Fund thereby leaving a difference of US$24,866,637.54 which was not remitted.

However, for Minister Tweah, the action of the government, which caused the NRF to lose a matching fund of US$15 million from development partners, was nothing wrong, especially when the fund is a sovereign purse and, when there is a crisis, it can be used for that purpose.

“It is the government’s money and when the government faces challenges, it can decide on how to solve them. Our administration started this Act, corrected many errors, and started to use the resources to maintain roads. Salaries were current from 2018 up until the time in 2019 when we missed the budget support,” Minister Tweah disclosed. “These challenges pushed us hard and, knowing that there were piling up salary arrears, we decided to go into the international Monetary Fund program.

“We began harmonization because of these pressures. Everybody in decision-making said there was a need to look at policy means because donors were not giving money. When you are faced with a crisis of that nature, you begin to look for ways to solve the crisis. In 2019/2020, there was re-appropriation by the National Legislature. Technically if there should be an issue is on the US$7 million [that we used],” he added.

Tweah noted that it is an open secret that 2019 was the toughest year of the administration of President George Weah and, with the government needing money to pay salaries, urgent action was needed to fix the crisis, forcing the use of the road in that light.

“When you are faced with a crisis of that nature, you begin to look for ways to solve the crisis. We had a conversation with legislative leaders and development partners.  The German Ambassador [then] said it was not bad to use US$6-7 million, but it should be a one-off thing,” Min. Tweah said on the Spoon Talk Show on April 24. “The reason we called the partners was because of the accusations of diverting money in December of 2018. It’s to deal with the controversies.”

“The significant challenges of our administration began in 2019. When we said we turned the microeconomics from 31 percent inflation to 7 percent, it means we had very difficult times. In 2019, we missed a major budget support of US$20 million. The Legislature passed a budget of US$570 million and there was supposed to be US$20 million coming from a development partner but that did not come,” he said.  “So we had a shortfall of US$20 of the US$570 million. And US$20 million is a month’s salary for the government. This was the beginning of the crisis of our administration. This was the beginning of the crisis of payroll.”

Meanwhile, the GAC reported further that in the fiscal year 2019/2020, MFDP withheld the total amount of US$7 million from the petroleum levy fees collected to support the country’s budget, in contravention of the Fund Act. 

The fund management informed the GAC that the amount was requested by the MFDP to assist the Government meet its payroll obligations. The report says the program objectives of the National Road Fund will not be met when funds intended for road works are used for purposes not intended.

In a response to the GAC, the NRF said “The NRF brought to the attention of the Minister of Finance and the IMSC the issue of all fuel levies be remitted to the NRF accounts not through the Consolidated Accounts to avoid interference with the fund flow and to avoid delay in payments to contractors and suppliers for road-related maintenance works.

“The MCC (MC-AL) made the issue of fund flow one of the paramount condition precedents. The non-adherence to this condition precedent by the MFDP causes NRF to lose the Matching Fund of US$15,000,000 that was earmarked for the road sector. We hope this audit report will [make] a resounding demand for the Government of Liberia to see reasons to allow fuel levies and other road user charges collected by the LRA to be directly remitted to the NRF Accounts, not through the GOL Consolidated Accounts.

The decision to use the funds, according to  Minister Tweah, was carried out in consultation with the National Road Fund Steering Committee, which then consulted with the leadership of the Legislature and got approval through a meeting involving development partners.

“Public Financial Management Law says all monies will have to go through a consolidated account. Road Fund is a revenue and expenditure item,” Tweah argues. 

“We have the minutes and all records to show that we did not act in isolation or against the law.  There was no written communication but there are records of the meeting held to approve the use of the money,” he said. “Fifteen development partners were in the meeting with us. There are notes and minutes to all the discussions and they are public documents. 

Minister Tweah noted that the US$7 million taken from the road Fund will not be refunded because “it is not a debt,” adding that the accusation of government misappropriation of  US$24.8 million is mere political propaganda. 

“[We] did not receive a written authorization from the Legislature because it is not in all circumstances it is done. The Inter-Ministerial Committee manages the Road Fund and it is approved. The NRF says the Ministers of Public Works, Transport, Finance, Internal Affairs preside over the Road Fund.

“They implement the Road Fund Law. That Committee agreed for us to use the money.  We had a US$100 million deficit. There was no surplus. The Public Works Minister chairs the committee,” Min. Tweah added.