Boasts of US$1.8 million Surplus
The Liberian government boasts of a surplus of US$1.8 million as an amount brought forward from the 2016/2017 budget year to the FY17/18 that was just passed by the National Legislature. This revelation is was made yesterday as the government, through the Ministry of Finance and Development Planning (MFDP) said it “has been constrained to respond to reports that it is experiencing its biggest deficit in the amount of US$41.8 million for the just ended 2016/2017 fiscal year.”
This is the biggest surplus since the Ellen Johnson Sirleaf’s administration came to power in 2006.
A local daily reported two days ago that it reliably gathered that the government is experiencing a deficit of US$41.81 million which as a result of poor fiscal stewardship of the economy.
Quoting a financial expert, the local daily said, “The implication this has for the next Government is that they will be starting from negative cash balance in the bank with huge debts to repay. This could cause several donors to pull additional funding from the Government because they can no longer trust the Government to be fiscally responsible.”
The newspaper reported that it has in its possession a reconciliation report, which indicates the possibility of President Sirleaf leaving the next Government with a significant domestic debt.
In a swift reaction yesterday, the Finance Ministry rebuffed this media revelation, which is on the basis of inside sources at the ministry, terming it as erroneous.
In a release late Wednesday evening, the ministry noted that the budget year FY16/17 successfully ended with a surplus of US$1.8 million brought forward to the FY17/18 budget, which has been approved by the Lower House and awaiting concurrence by the Upper House of the National Legislature.
The ministry said, “The newspaper based its story on an unsubstantiated year-end fiscal reconciliation report of the consolidated account, which indicated a wrong year-end revenue collection of US$522million and US$42 million as potential deficits; even though, the year-end expenditure estimates needed for accurately determining deficit or surplus was not mentioned. The paper further suggested that the deficit could increase to US$50 million if US$4million payment for the Executive Mansion renovation and US$6million payment to George Haddad’s Prestige Motors were made, which are all concoction of a ‘financial expert’s’ imagination.”
With this response, the Ministry said that it is not responding to the “erroneous publication” but is rather providing a credible report to the citizenry, the business community, development partners, and the media in general on the national budget and other key initiatives of the MFDP before the close of the last fiscal year.
“Gross Revenue collected at the end of June 30th, 2017 is estimated at US$550.8 million. This amount of the ECOWAS Trade Levy of US$3.2 million brings the net revenue available to GoL at US$547.57 million. This fact contradicts the report that net revenue amounts to US$522 million.
“Total expenditure for FY16/17 is estimated at US$545.73 million,” the release said. “Deducting the US$545.73 expenditure from the net revenue of US$547.57 amounts to the US$1.8 million surpluses or carried forward mentioned earlier. If there were any indication of a deficit, there would not have been a carried forward to FY17/18.”
It is important, the Ministry noted, to state that the government is currently engaged with the International Monetary Fund (IMF) on an Extended Credit Facility Program which has rated the Government for sound macroeconomic management and adherence to fiscal discipline.
Though the local daily did not delve into the details and complexities of the problems at the MFDP, it quoted inside sources as saying that Minister Boima Kamara has no interest in fiscal management and has cut off the regular weekly Financial Management Team (FMT) meetings that look at the entire picture of the economy and make decisions on spending—like his predecessors did.
The FMT meeting brought the technicians together in one room to look at the revenue picture, the allotment, and then the disbursement.
“By this meeting, the necessary decisions were made on what to fund and what not to fund so that the Government did not run a deficit. The staff informed us that the current minister has absolutely no interest in doing such thing.” The Minister was also accused of working unilaterally and has taken onto himself the function of the Deputy Minister for Budget and Development Planning.
“This information about Minister Kamara usurping the allotment functions of the Deputy Minister for Budget and Development Planning and not holding weekly FMT meetings is untrue,” the ministry said.
In addition to the IMF Extended Credit Facility Program (ECF), the Minister is actively engaged with other international and regional partners, including the World Bank, IFC, EU, China, Sweden, Germany, African Union, and ECOWAS Commission in promoting multilateral and bilateral cooperation that is mutually beneficial to all, especially the people of Liberia, it said.
The ministry said it has concluded an agreement with African Capacity Building Foundation (ACBF) for Quick win research capacity building support to the Liberia Macroeconomic Policy Analysis Center (LIMPAC). “This support will facilitate at least 3 research studies about the Liberian economy and operationalized a modern Research and Econometric Training laboratory being established within the Ministry.
“Many feel the government’s communication machinery hardly provide useful and relevant information to the public in a more proactive manner, but it is being very swift on the reactionary end.
“Many also feel that lack of information has also been the weakness of this, already struggling administration “And this is not good for a responsible government. You need to inform the public about happenings in every sector, but to be reacting to stories are not the best way to go. This information about a surplus of US$1.8 million and is a very good information but the Liberian people would have never heard of if this report about the deficit had not come out. This shows sinister motives,” an observer said.