The House of Representatives has unanimously endorsed the printing of additional Liberian dollar banknotes which, it says, will strengthen the country’s reserve at the Central Bank of Liberia (CBL) and enable the economy to respond to the demands of the government and citizenry.
The lawmakers made the decision yesterday in Chambers in accordance with their constitutional mandate as outlined in Article 34(d) of the Liberian Constitution.
The Article states: “The Legislature shall have the power to levy taxes, duties, imports, exercise and other revenues, to borrow money, issue currency, mint coins, and to make appropriations for the fiscal governance of the Republic…”
The House’s decision was prompted by a report from the Joint Committee on Banking and Currency; Ways, Means, Finance and Development Planning; and Public Accounts and Expenditure.
According to the 4-page report from the Committee under the chairmanship of Montserrado County District #10 Representative, Julius F. Berrian, “The Committee had a total of three meetings to familiarize itself with the issue at hand. Additionally, the Committee had a series of hearings with relevant stakeholders including the management team of the Central Bank.
“During the hearings with the Central Bank, the Committee established that the Bank is justified for requesting this authorization. The Committee also established that the last time the bank undertook similar action was approximately five years ago. It is common knowledge that printed notes are subject to factors that lead to reduction in their quantity and quality in circulation – such factors as mutilation, disfigurement and or damage.”
Twenty three of the 30-member Joint Committee signed the report.
Following an hour of debate, Montserrado County District #8 Representative, Moses Acarous Gray proffered the motion to endorse the printing of additional banknotes and a subsequent audit of the CBL.
Thirty Representatives voted in favor, two voted against, while two abstained.
Worst Economic Argument
There was a heated argument, which nearly broke into a fistfight between Montserrado County Lawmaker Edward Forh and his collegues. He was ejected from the chamber by the Sergeant-at-Arms, ordered by House Speaker J. Alex Tyler, because of the disturbance. Rep. Forh defied the Speaker’s decision and scuffled with the Sergeant-at-Arms until some of his colleagues intervened and convinced him (Forh) to abide by the Speaker’s decision.
Rep. Forh contended that the country’s economy would worsen if additional money is printed.
It may be recalled that last month, President Ellen Johnson Sirleaf wrote the Legislature, particularly the House of Representatives, requesting that the CBL be allowed to print banknotes. Former CBL Governor J. Mill Jones and the immediate past interim management of the CBL had also advanced a similar request.
The President in her letter said her decision for making the request was triggered by two letters sent to her by then Central Bank Governor Dr. J. Mills Jones and the current Acting Governor, Charles Sirleaf.
“Mr. Speaker, I have received two letters from the CBL advising that the economy will be seriously affected due to the lack of local currency to meet national transactional needs,” President Sirleaf’s said in her letter.
The President’s letter did not capture the amount of money now in circulation and how much should be printed to augment what is available on the market.
The first of the two letters was sent to her by the former CBL Governor Jones on September 24, 2015, while the second was sent on February 19, 2016. Both letters highlighted the negative impacts on the country’s economy in the not too distant future due to the shortage of Liberian dollars on the market.
“This problem needs to be addressed now due to the urgency of the matter, thus, the printing of new Liberian dollars should commence within the next five months.
“I have advised the acting executive governor of the Central Bank to seek the opportunity to discuss this matter with you and with your committees as you will dictate. I hope that you can agree on the way forward to enable the CBL to move forward in a timely manner to conclude arrangements for printing of the currency,” President Sirleaf said in her letter.
She then urged the Legislators to act upon her letter as soon as possible in order to bring the situation under control.
Meanwhile, the Senate in Plenary yesterday turned over the President’s letter to its committees on Banking and Currency and Ways Means and Finance for review. They also mandated the Committee to report back within one week to enable the plenary to take action.
First and Final
This is the first time in over 20 years that a Liberian President has requested Legislature to print Liberian banknotes.
In 2004, former CBL Governor Elias Saleeby printed about L$47 million and in 2011, Governor Jones printed about L$60 million without the authorization of the Legislature, a situation that caused public uproar.
The two former Governors relied on Section 20, part 5 and section 21 of the CBL Act, which states that the CBL shall have sole right to issue banknotes and arrange for the printing of notes and minting of coins.
However, a concurrence from the Senate, and endorsement of the President, would ensure the printing of the additional money.