— World Bank and IMF defer to sovereignty
The swirling controversy over the head of the Minister of Finance and Development Planning, Samuel Tweah, about the authorized usage of the National Road Fund, continues to linger as the United States Government has distanced itself from claims by the Minister.
The fund was established to defray the cost of road maintenance across the country. But Tweah cited extreme economic conditions as a significant factor that forced the government to use US$25 million, which was earmarked for the fund for a different government function.
And on the heels of the Minister’s remarks, the United States Government, the country’s main bilateral and development partner, has come outdistancing itself from being a participant in the Minister’s thinly veiled declaration of violating the law.
“The United States Government has never supported or approved alternative uses of revenue meant for the National Roads Fund,” an Embassy Spokesperson said in a statement to FrontPage Africa. “The U.S. Embassy, representing multiple U.S. agencies, including the United States Agency for International Development, continues to be a strong partner of Liberia in its development and journey to self-reliance.”
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.
The now controversial declaration, which the Minister has justified in several media interviews and before public integrity commissions, is found to be in violation of chapter 2.2 of the Act establishing the National Road Fund.
“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,” the Daily Observer quoted the Minister as saying.
The German embassy could not be reached for comment. A similar point by the Minister, according to sources, was echoed recently during his appearance on Capitol Hill before the Public Accounts Committee of the Senate.
Morally right, legally wrong?
Meanwhile, a financial expert told the Daily Observer in an interview for this story that there is absolutely no provision in the Liberian law that permits such misappropriation as was done by Tweah regarding the National Road Fund.
“But, no matter how noble his stated reasons for redirecting the NRF money appear to be, the Minister has been too arrogant about the issue,” the expert, who requested anonymity, said.
“His action was wrong and there’s no justification for that. But if he had simply come out to admit he's wrong and appeal to the conscience of the Liberian people, the backlash could have been minimal. Let’s talk so and talk so — in a sense, what he did could arguably be morally right but legally wrong. That is if indeed the Road Fund money was indeed reappropriated to civil servants’ salaries.”
IMF, World Bank, and EU Defer Sovereignty
But while the US Government has distanced itself, other major bilateral partners, the International Monetary Fund, European Union, and the World Bank, have acknowledged that they were and formed part of the discussion as claimed by Tweah.
The IMF, World Bank, and EU said their consent was meant to be a one-time measure with approval from the relevant authorities, vis-à-vis the Legislature.
The EU and the World Bank in a joint statement indicated that their involvement was in the context of Liberia's South-Eastern Corridor Road Asset Management Project (SECRAMP).
“In response to your inquiry on the Government of the Republic of Liberia’s use of its funds from the National Road Fund (NRF) to finance critical expenditures in the national budget, please be advised that the Government discussed the issue with the World Bank and three other donors (Germany, the UK, and the EU),” a joint statement from the EU and World Bank revealed.
“It was done in the context of the Liberia South-Eastern Corridor Road Asset Management Project (SECRAMP), co-financed by the Government of Liberia using the NRF, the World Bank’s resources, the Liberia Reconstruction Trust Fund (LRTF) to which the three donors contribute, and the private sector. The Government assured the World Bank and the other donors that the NRF would accumulate adequate resources to be set aside as counterpart funding for the planned road project.”
The Southeastern Corridor Road Asset Management Project for Liberia aims to support the recipient’s efforts to enhance road connectivity for residents living along selected sections of the Ganta‐to‐Zwedru Road Corridor and to improve institutional capacity to manage the road sector, according to the World Bank.
Though the statement did not indicate how much was agreed upon to be used by the government, the World Bank and the EU stated that they advised the relevant authorities to consult in the framework of legality.
“As a general rule, in its work with all member countries, the World Bank/EU defers to the country authorities on decisions of national interest and their legality.”
The IMF, also acknowledged that it was in the know and gave its acquiescence to the deal.
“The government discussed the transfer of the US$7 million from the Road Fund to the FY 2019/2020 budget with development partners, including the IMF,” Aidar Abdychev, IMF’s Resident Representative said in a statement.
“We note that the transfer was included in the 2019/2020 budget Act approved by the Legislature, and we defer to the authorities and Legislature to follow the pertinent requirements under domestic laws for effecting such transfers.”
Minister Tweah’s comments, the distancing of the US government from what appears to be a violation of the law, and the deferral of the EU, WB, and IMF to sovereignty matters, come in the wake of an audit from the General Auditing Commission which discovered that several millions of dollars were diverted from the fund as well as mounting pressure from the Legislature over the source of authorization of the usage of the funds.
The GAC, in its report to the Legislature, which covered two fiscal periods (2018/2019 and 2019/2020) revealed 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. 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.
The GAC audit report stated that in its response to the audit report, the NRF complained that the decision of Minister Tweah caused the agency to miss out on the US$15 million from the Millennium Challenge Corporation compact.
“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 account to avoid interference with the fund flow and to avoid delay in payments to contractors and suppliers for road-related maintenance works,” according to the NRF in its response to the GAC.
The US$257 million compact was signed between the Government of Liberia and the MCC in 2015. The compact included funding support to the National Road Fund.
However, a US Embassy source, pointing to an interim monitoring report from the MCC, highlighted that funding was canceled in 2019 due to a lack of progress and diversion of funding from the fuel levy. This was confirmed in the NRF’s response to the GAC.
“The non-adherence to this condition precedent by the MFDP caused the MRF the loss of the Matching Fund of US15,000,000 that was earmarked to the road sector.”
It is not clear, however, whether Minister Tweah sought full approval from the Legislature. Though the Minister has revealed that he spoke with the leadership of the House and the Senate.
However, critics have contended that in the absence of a joint resolution from the House and the Senate or the repealing or an amendment to the act creating the National Road Fund, claims of approval, verbal or otherwise continue to remain moot.
“The sources of revenue intended to finance the National Road Fund and the usage of monies under the Fund are subjects of the act creating the Fund. Monies collected are restricted to road maintenance and/or the building of new ones. There is absolutely no way that stakeholders including the legislature can authorize anything outside of the law without amending the same, Lofa County lawmaker, Representative Clarence Massaquoi said in a Facebook post on May 25.
“The House of Representatives that I am a part of or its leadership at no time authorized directing proceeds from the Road Fund to anything else outside of the purpose(s) established by law.”
Records obtained showed that the Legislature did reduce the budgetary allotment from US$29 million in 2019/2020 to US$22.3 million, a variance of US$7 million, confirming the IMF’s claim.
As to whether it was done within the framework of the law (Act of Legislature) which created the National Road Fund, as referenced by Rep. Massaquoi, could not be established.
Patience Senkpeni-Kumeh, the spokesperson of the Ministry of Finance, failed to reach back with a comment on the matter.
When contacted the House Director of Communications, Robert Haynes, discourteously said he could not speak on the issue, and later somersaulted that the investigation ordered by the House a fortnight ago has been completed and the report was made available to media institutions assigned at the Capitol.
What does the report say?
The report from the House of Representatives Public Accounts Committee on the controversy around the diversion and usage of funds from the National Road Fund continues to raise more questions than answers.
A copy of the report in our possession reveals that the Ministry of Finance relied on an aide-memoire with partners to reallocate the US$7m slashed from the NRF’s draft $29 million dollars’ budget, which it appears to be in agreement with.
“Thus by the provision of the aide-memoire, the committee recognized that the arrangement between the government and the development partners, the aide-memoire serves as sufficient consideration for the re-allocation of funding to affect other priority budget lines.”
But the conundrum to that lies in the usage of the slashed US$7 million which the committee said went to the National Covid-Fund to enhance the fight during the pandemic, contrary to claims made by Minister Tweah that it was used for civil servants’ salary payment.
The Minister also said he received the green light from some members of the Legislature whose names he failed to disclose, prompting his critics to question whether such “green light” was in the form of a joint resolution from the House of Representatives and the Senate.
Some legislators, including Montserrado County lawmakers, Senator Abraham Darius Dillon and Rep. Yekeh Kolubah, have suggested that the Minister Tweah could face prosecution as it mirrors the case of former Minister of National Defense, Brownie J. Samukai, Jr.
In a post on his official Facebook account, Senator Dillon hinted that Minister Tweah may most likely share the fate of the former Minister of National Defense who was ordered to restitute money taken from the welfare fund from members of the Armed Forces of Liberia or face a lengthy prison sentence.
“I keep hearing some folks in the government boast and say, ‘The President has authorized me to do this ... to do that.’ Okay ooh! I am here wondering whether they have quickly forgotten that Brownie Samukai was also ‘authorized by the President’!!! Their time is coming too … Hmmm!”