The Minister of Finance and Development Planning (MFDP), Boima Kamara, has admitted that the Liberian government is unable to control the rate of the US dollar against the Liberian dollar, but can only mitigate its fluctuations.
Minister Kamara explained that the reason is because Liberia depends on imported goods and therefore the strength of the US to the Liberian dollar is determined by market forces abroad.
However, he said until “we strengthen the structure of the economy by ensuring movement of people in ways that do not hinder the road network that forms the basis for which export takes place, the government will intervene with measures; and we need to appreciate that depreciation has not reached 10 percent.”
Minister Kamara additionally said the impact of the new fiscal corrective measures being instituted by the government has resulted in securing a significant amount of money, which is being directed to other meaningful projects.
He spoke yesterday at the Ministry of Information’s special press conference and noted that the implementation of a very rigid fiscal rule on travels alone has resulted in significant savings of about US$2.9 million in the 2016/17 fiscal year.
Minister Kamara said, “The number of travels within government or by officials of government has reduced by 71 trips. This is from a mammoth 226 trips during the first five months of FY2015-2016, to 155 in the first five months of this current fiscal year.”
He said the ministry will continue to engage spending entities to accelerate their spending and procurement plans for the timely execution of investment projects.
“We were able to achieve this feat because we took some measures that we needed to take to address the challenging economic situation that our country is currently experiencing,” he said.
Paramount among these fiscal measures, he said, is the aforementioned reduction in the number of travels by top government officials.
“The new rule lowers the class of travel and the number of travel days. Also the travel rule also considers classes of travels, meaning the class of the flight that an official is traveling with—be it first class, business class or economy class. People are now traveling with the intent of bringing economic return to the country. Travel must reposition Liberia in context of engagement with partners,” he said.
He reechoed the execution of the FY 2016/2017 budget which is guided by the implementation of fiscal rules that aim to streamline recurrent expenditures, especially spending on travel.
On other developments, Kamara said the government has allotted spending entities to spend US$24.5 million on key public investment projects across different sectors.
Minister Kamara said despite the slow revenue performance, the government remains resolute in securing funding for these critical public investments.
He said “US$2.9 million has been disbursed to the National Elections Commission (NEC) toward preparatory works for the upcoming 2017 Presidential and Legislative Elections. US$12.45 million of the total allotment has already been disbursed in cash on various projects, including US$4 million on the Mount Coffee Hydro, among others.”
According to Kamara, the total approved expenditure for Public Sector Investment is estimated at US$79.75, and is focused on key priority projects that include initial financing of the 2017 elections, incremental government support to the UNMIL Transition Plan, road maintenance and completion of ongoing roads as well as support to the agriculture sector to kick-start government’s economic diversification program.
Kamara said since the approval of the National Budget in October this year, the economic conditions which underpinned the draft budget during early May have changed.
“The slow economic performance owing to lowering global prices for Liberia’s key export commodities, including iron ore and rubber, has triggered downward adjustment of real growth from 2.5 percent to –0.5 percent. This implies difficulties in realizing the full approved revenue envelope, especially the full tax revenue component,” he said.
However, Kamara said with promising growth trends in the agriculture sector, especially rice, cassava production and fisheries, there are prospects for a bright future, beginning 2017, when the economy is expected to grow by 4.7 percent.
He said the government is still determined to address these challenges through policies and concrete actions that will bring about positive results.