GAC to Legislature: ‘Do Not Waver’ on Stance Against Printing New Currency

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Auditor General of Liberia, Mrs. Yusador S. Gaye, warns that the issues cited in the Kroll and FIU reports are reasons to withhold printing of new currency banknotes "for now".

The General Auditing Commission (GAC), one of Liberia’s integrity institutions charged with the responsibility to audit all government entities, has sternly warned the government against printing of ‘new money’ or banknotes to replace the ones in circulation.

According to an October 8, 2019 communication addressed separately to House Speaker Bhofal Chambers and President Pro-Tempore Albert T. Chie, the GAC called on both Houses not to accept the request made by the Executive, “because it will accordingly have an adverse consequence on the economy and the people.”

A copy of both letters, signed by the Auditor General, Mrs. Yusador Gaye, is in the possession of the Daily Observer.

The GAC’s communication added, “I am strongly of the opinion that giving your approval to print more currency is unfathomable, but will be very misplaced, granted we are yet to understand all what happened at the last currency printing, as evidently, the US$25 million mop-up exercise does not engender much confidence in the Central Bank of Liberia (CBL).”

The GAC continued: “In fulfillment of part of my constitutional mandate aimed at providing support to your oversight of financial management role, I firmly suggest that you do not waver on your resolve not to print additional Liberian currency/money at this time.”

It can be recalled that in September 2019, President Weah sent a communication to both houses of the Legislature, calling for their approval to print new banknotes due to unaccounted currency infused in the Liberian economy.

Acting upon the President’s request, the Senate Committee on Banking and Currency, chaired by Grand Gedeh County Senator Marshall Dennis, quickly recommended Plenary’s affirmation. But the committee’s response to the President’s request drew vehement opposition from Senators Darius Dillon, Oscar Cooper and others.

Margibi County Senator Oscar Cooper wondered why the CBL should request to print L$35 billion, when the money in circulation is L$21 billion that needs to be removed from the market. “What becomes of the difference of L$14 billion, which was not properly answered by the Governor?” he asked.

According to counts provided by the GAC, “most currencies are fiat in nature, which means they are not backed by any tangible commodity, and technically have no intrinsic value, but rather by the government’s authority and trust. Again, fiat money has value only because government maintains its value or because parties engaging in exchange agree on its worth.”

The AG continued: “A review of the daily exchange rate on the CBL website shows that the exchange rate has steadily risen on a daily basis during the period August 16, [to] October 2, 2019. Generally, a major problem of the fiat currency is inflation, and as government prints new money, the currency already in circulation devalues.”

The GAC said the most important rationale for the entity’s professional advice in addition to the above are that: a) “it has not been verified whether the CBL has implemented measures to address the lapses noted by the Kroll’s Scoping Report (3.2.8 non reconciliation of vault balances and 6.4.2.3 in constancy in finance department); b) the Presidential Investigative Team (PIT) report 2.2.25 –raises alarms of no security in place for the protection of reserves; and c) the GAC’s Agreed-Upon Procedure on the US$25 million mop-up exercise highlighted (1.1.3 unsigned, and not dated minutes, 2.4.2 lack of procedure for posting, and 2.4.3 disbursement not processed through the bank).”

The communication further raised several questions, including that, “the investigation into the whereabouts of the L$16 billion, which has not have been finalized; the matter of how the mop-up exercise was handled has not been addressed, whether the CBL has put in measure to ensure most currency flows through the banking system as 90 percent of the currency [exists] outside the banks.”

GAC continued: “What policies has the CBL put in place to curb possible counterfeit monies on the market; and what measure will be put into place to prevent the hoarding of cash?

“Additionally, from the printing and handling of the L$15 or L$16 billion, it is quite apparent for all to see that CBL does not have adequate internal controls, and is thus ill-equipped to function at its best, which the Kroll and GAC reports attest to,” the communication said.

Though House speaker Bhofal Chambers is yet to speak on the leaked of the communication, the GAC’s communication however commended the Legislature on its recent stance, denying the President’s request to print more Liberian paper currency.

The GAC added, “I strongly recommend that, as the first branch of government, you not only find ways to forestall the morass, but also delve into the reasons we are in this predicament.

Recently, Montserrado County District #8 Representative Acarous Moses Gray, an Executive Committee Member of the ruling Coalition for Democratic Change (CDC), said printing of the new banknotes will help the CDC government to put smiles on the faces of civil servants (many of them have not being paid for several months.)

In a sharp response to critics on social media, he posted: “Printing of money will also help pay our civil servants on time for the Christmas’ break, but you are kicking against it because you believe that if civil servants are not paid on time, they could join the so-called Weah must resign failed protest.”

Rep. Gray argued that the significance of the printing of new Liberian banknotes by the Weah administration cannot be overemphasized.

There have been mixed reactions concerning the printing of the new money, which some Liberians believe is to further enrich the already “corrupt regime”, while others are of the opinion that it would strengthen the fragile economy of the country.

Well placed sources have informed this newspaper that the “new controversial money” has already been printed, but is simply awaiting the formality of the Legislature’s approval, in fulfillment of Article 34 (d) of the Liberian Constitution, which gives the Legislature to “issue currency [and] mint coins,” for circulation via the various banks. According to sources, this is the main reason for the President’s call on the Legislature to cut short their break to return before the festive season.

In keeping with the Constitution, the legislature returns from the annual break in the second week of January but, due to the urgency government attaches to the approval of the new currency, the lawmakers have been asked to return on November 18.

Article 32

Article 32 of the Liberian Constitution states: “The Legislature shall assemble in regular session once a year on the second working Monday in January.”

However, the ‘B’ part says: The President shall, on his own initiative or upon receipt of a certificate signed by at least one-fourth of the total membership of each House, and by proclamation, extend a regular session of the Legislature beyond the date for adjournment or call a special extraordinary session of that body to discuss or act upon matters of national emergency and concern. When the extension or call is at the request of the Legislature, the proclamation shall be issued not later than forty-eight hours after receipt of the certificate by the President.

13 COMMENTS

  1. Albert Einstein once said, “Insanity is doing the same thing over and over again and expecting a different result.”

    If this is not insanity then, I don’t know how to classify printing large quantity of worthless new currencies without strengthening or adding value to an already existing weak Liberian currency that fluctuates around LD$210 to US$1.00?

    Finally, Liberia’s Auditor General, Mrs. Yusador S. Gaye, has the guts to stand up to this insanity of printing new Liberian currencies that would add no additional value to an already weak Liberian economy.

    Who are the Economic Experts advising the President? Instead of the President Economic Team coming up with sound economic strategies and sound monetary policies that would help strengthen Liberia’s weak economy and deal with ways of adding value to Liberia’s weak Dollar, some boot-lickers of the President are urging their fellow Lawmakers to authorize the printing of more worthless Liberian Dollar.

    Why continue to put more “band aid’ on a serious economic crisis? I don’t know how long poor Liberians will put up with such economic insanity.

    On a side note: I hope members of the Liberian Government could listen to Dr. PLO Lumumba (Director of Kenya School of Law) YouTube speech he delivered recently in Ghana. Entitled: “PLO Lumumba Apologize to Kwame Nkrumah, you told us to UNITE, We are Divide.”

    Dr. PLO Lumumba spoke about the same worthless African Currencies circulating in different African countries due to poor economic policies in Africa.

    These poor economic policies continue to keep Africans poor despite Africa’s vast natural resources on the continent.

    I hope the University of Liberia could invite this brilliant Pan-Africanist as a Guest Speaker.

    It seems the Economic Insanity in Liberia continues unabated!!!

  2. She will soon be replaced! This is President Weah’s new strategy in dealing with anyone going against his policy. What is the rationale of printing new money? This is poor economic policy.

  3. Ha ha ha this is what people with Finance or Economic degrees call monetization..

    President Weah don’t be fooled with the idea that printing more money in Liberia will bring economy relief to know he country…

    No, it will what not. What it does is it increases prices b cause there will be more on the market with lesser goods to buy..

    Acarous Moses Gray I don’t know how educated he is, but his argument he doesn’t seem to know much about Finance it Economics…

    You have people around you who want you to fail because you don’t have much education in these areas..

    This same thing happened with the State of California in the US.. Electing an actor to the governor position, those that were around him screwed big time..

    You need to appoint smart tribal boys around you finance and Economics degree to help you get things done in the country..

    Those who are telling you yes sir, yes sir it is good idea to print more money in the Liberian economy don’t want you to succeed..

    What happened to the 25 billion or the balance that were left over.? Put that through the banking systems..

    Let’s the banking rates do the control of the economy..

    If you print any New money the ordinary Librarians will get angry with you because prices will be high and you don’t want that..

    • woo… your statement is so good. thanks.

      but I have problem with this one ‘You need to appoint smart tribal boys around …..” .
      please work on this part, you are also encouraging bad. there are others from other tribal background that are good. I am from weah tribe but don’t want to work with him because of this same “You need to appoint smart tribal boys around …..”. this made Doe to died at the hands of Liberians, and his tribal people were killed highly due to their connection with Doe.

      I am not afraid, because nothing bad will happen to weah but we Liberians will face it for electing someone who did not do anything as senator for 3yrs and expect him to do something as president.

      so brother thanks again, but please leave tribal out of weah govt. this is our govt, we are all Liberians, we must think and decide rightfully for our country and children future. almost all you said is truth, weah don’t know what it means to run a country or economy it is all because he never knew what it meant to be a senator mostly during the ebola with the name he made worldwide and did nothing much. but Liberians stay voted him as our president.

      I will stop there.

      for now take care brother, wish you all the best.

  4. Which is the lessor of the two evils: Discard the present worthless currency minted by two regimes? One with its central bank on the president’s varanda, the other that minted surplus above what was approved by the the very legislature? Worst still, with other currency minted at “world trade center”, further worsened by the input of the other currencies being minted and pumped into the economy by Emeka ane Jalloh them? Other economies went along that route and have, to a large degree stabilized; Ghana whose cedi took a lorry full to buy a loaf of bread, did and now she is stabilized; Kenya is also a case. Not to mention Germany after world war II. Let us put our differences aside and make decisions above our ergos. President Weah has made history. Whether you strangulate his government to win him in an election or not will not removed the fact that he rose from the bottom to where he is today; loosing elections will not dent such record. Stop suffering the ordinary liberian people because you think you are making President Weah unpopular; We made similar mistake with monkey come down and look at where we are today! A sweet land of Liberty has turned into a bitter land that stinks with hate and lies. Enough of this crab syndrome!

  5. Mr. Zulu Grear,

    Stop comparing the incomparable! Don’t just take countries and compare us to them. Their situations were NOT the same as ours.
    Take the situation of Ghana, carefully study it before you comment. The situation of Kenya was also quite different from that of Ghana. Both situations were approached differently with the ideal human resources and a resolve for the common good of all.

    Our situation has no likes on planet earth. Maybe it could be compared with the Doe’s era, but nowhere else on planet earth.

    If you don’t know, we are in a serious mess. We were in the pit and had started showing our heads up. Before the end of 6 years, we may plunge beyond where we were. Everything is being dismantled out of naivete or hatred or greed.
    Weah can never surround himself with people who will look him in his face and tell him “Sir, it’s not feasible or it’s ridiculous or that’s ludicrous!”. He will only surround himself with people who will tell him ‘Yes Sir!”.

    Have you forgotten that a judge was just replaced last week because he wanted to hear the merit and demerit of a case? What was wrong with that? Doing so would be “opposing the president”.

  6. MY TURN: Many well known countries resulted to printing monies that resulted to serious economic woes: Germany, for example had a couple currency snafus in the 20th century. During the Weimar era, after World War I, the country tried to pay its reparations by printing money, and prices went through the roof, to the point that in 1923 they were about a trillion times higher than they should have been. People were paying for loaves of bread with entire wheelbarrows full of cash. Money eventually became so useless German citizens used it to light their pipes and stoves, and gave stacks of it to kids to play with like Legos. Liberia, right now is not ready for such calamities as toasting our economy. I therefore urged the legislature to put country first by refusing to approved printing of new currency.

  7. Thanks to the Auditor General, her warning will go down into history, if Weah and his people will go ahead and print more bank notes. Very sure no one who study high school economics will agreeable accept printing new bank notes. If these people have printed the money already, that suggests hypocrisy and a flagrant disregard to the constitution of Liberia.
    Very likely, the 16 billion is sitting in homes awaiting exchange by the very people pretending to be solutions seekers of the economic situation created.
    A neutral government is needed to audit the two governments.

  8. “I firmly suggest that you do not waver on your resolve not to print additional Liberian currency/money at this time.” The phrase “at this time” informs the GAC boss isn’t philosophically opposed to replacing L$ in circulation. Instead, her contention centers on the “lack of adequate internal controls” at a CBL “ill-equipped to function at its best” as evidenced by the handling of the L$16 billion and USD $25 million mopped-up exercise funds.

    It, therefore, makes one to ponder why some are kowtowing here to the biased editorializing by a Daily Observer reporter, and pontificating on the pros and cons of printing money. Apparently, detractors and agent provocateurs are desperate about ensuring that government fails in stopping further blood loss of an inherited bleeding economy that they have lost their minds. Well, when done correctly, printing money to replace old money has helped Central Banks in the Subregion and elsewhere to have control over the money supply and helped with other efforts in jumpstarting their stalled economies.

    incidentally, GAC took part in the Kroll’s investigations, did it recommend charges against officials apart from those facing trial? If so, let her say it. But using capacity at CBL – rightfully undergoing changes at the top – as a crutch for prolonging replacing local currency which exact amount no one knows about is ludicrous. Ironically, former COP leader Senator Cooper who wondered why print L$ 35 billion when L$ 21 billion in circulation sounded more rationale.

    • Liberia is a third-world country run by third-world people…it is the perfect definition of Donald Trump’s shit-hole country.

  9. woo…. this woman is about to be replaced soon. WATCH and SEE if she continue saying this.

    I said Weah will never know what to do as president because he never knew what to do as senator for 3yrs and people stay voted for him. my friends hated me for what I said, I was trying to protect weah reputation by encouraging them to allow him be vice or something else. they said NO! it is coming to reality. I don’t hate weah but people who fool him to get in power so they too can steal like others did in the pass. they are telling him what to do. as the words enter his ears from their meeting, he comes out and say or do as they tell him because they are the brains and he is the body. they think and decide, he do. People who like you will always tell you the truth, that’s how God speaks to you.

    Printing new money will not account for the missing money. No other country use Liberian dollars. if the govt can not account for the past money printed 2yrs ago, there is no need to print new money.
    logically, when new money is printed, the old ones will have to be replaced, you will have 2 sets of money on the market, to replace the old money, the rate will go high because those with the old money will want to replaced it with new ones, than the US rate will be fighting against 2 set of Liberian dollars, the result will end up in a big failure because even if we print 10 set of LD it will not work against the USD power to stabilized the economy.

    what Liberia need is peace, accountability, transparency, punishment for corrupt officials from the House to the executives, trust in the security and law, so others can come to invest in Liberia. they will bring in more USD to invest and LD will start to get its value like when UNMIL was in Liberia.
    10 – 12 yrs ago the economy was ok, due to all these factors in place even though corruption was stay in the govt but the rest was visible.

    the most important thing was, Ellen was always speaking for herself, Liberia, and to the situation with partners to come and help.
    what our brother know about speaking to people. for 3yrs he never held one meeting with montserrado to help solve their problems as Senator. how can he do now as president? “Childishness starts from home and ends outside”, “no one can take a fish from a river and expect it to live on Land ” (from football field to presidency) “nor can you teach old dog new tricks”, ” when you don’t know what to do, you don’t know” and “when chicken white, it is white”

    Liberia is about to see another bad time with this money printing thing. I pray that God help us through these trying times, protect our president weah until his term is over, and give Liberia the rightful leaders to his heart.

  10. Liberia’s mortal weakness has almost always been its inability to produce the quality of leaders that would place the interests and welfare of the nation above their own. The quality or condition of the economy, adherence to the rule of law, education, health care, roads, ease of doing business, etc., etc. only point to very low grade leadership quality. This naturally explains why we lags behind most African countries and continues to limp from one perilous crisis to another. High quality leaders exercise sound judgment and innovation to bring about the high outcomes.

    What is now being exposed for all to see is how decades after decade s of ineptitude can can only produce the sort of national embarrassment unfolding daily in Liberia. The frantic effort by this government to print new banknotes, cannot, in view of pending resolutions of immense folly the MOF and alleged financial fraud by the CBL, be seen as the earnest exercise of sound judgment.

  11. Madam Auditor General, the notorious Charles Taylor said before going into exile, ” Above all else ” the country , Liberia. Not George Weah, not Ellen Johnson Sirleaf, not the House Speaker and definitely not the Kru Pro-temp. All these political egotistical politicians are anti- Liberia. As always, stand your ground .

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