Amid projected revenue shortfall, will the Senate concur?
The House of Representatives has approved US$570,148,000.00 for the Fiscal Year 2018/2019, constituting a revised — new — amended budget with an addition of US$8 million, which is about 1.6% increment to the original budget of US$562.2 million submitted by the Executive.
The US$570.1 million is ratified amid projected revenue constraints, contrary to advice by financial experts to address shortcomings causing the inflation of prices on the Liberian market as well as the skyrocketing exchange rate of the US dollar. Experts also advise to control expenditure, preserve current expenditure savings and to implement decisive measures to raise revenue collection in the reminder of the fiscal year, including by addressing the backlog of taxes in the concessions sector and collecting fees owed by state entities, amongst others.
The new budget is considered a shortfall-prone budget. For the past seven years including the recent 2017/2018 fiscal year, Liberia has experienced budget shortfalls.
It may be recalled, even Finance Minister Samuel D. Tweah warned of an imminent budget shortfall due to insolvency and fiscal limitation to raise revenue to service the budget unless a miracle happens.
On Tuesday, June 26, 2018, at the 40th day sitting of the House of Representatives, at 12:36 pm, 52 Representatives, constituting more than two-thirds majority, voted to ratify the Fiscal Year 2018/2019 National Budget, in the tune of US$570,148,000.00 or its Liberian Dollars equivalent of LD$84,333,327,390.40.
The ratification of the Budget followed a report from the Joint Budget Committee on Ways, Means, Finance and Development Planning and Public Accounts & Expenditure.
“The review and validation processes identified US$8 million additional and encumbered revenue, thus, a total revenue envelop of US$570,148,000.00 or its Liberian Dollar equivalent of LD$84,333,327,390.40 at average exchange of LD$147.9148 to US$1.00 for FY 2018/2019,” the report said.
In the detailed appropriation of the additional US$8 million, the Joint Budget Committee said they spelled out the source of the money and are hopeful for a sharp improvement in the revenue of the country.
“The original submission for compensation is US$303.4 million and it was increased to US$310.4 million; for Use of Goods and Services it was US$78.9 million, and increased to US$91.1 million; and Non-financial Assets was at US$11 million but increased to US$15.12 million.”
The Committee further said: “The Subsidies remain at US$1.5 million; Grants US$63.9 million; Debt US$30 million as well as Social Benefits at US$0.048 million while PSIP was reduced from US$73.4 million to US$58.08 million.”
All 15 members of the Committee on Ways, Means, Finance and Development Planning affixed their signatures to the report, while five of the seven members of the Public Accounts & Expenditure Committee signed. Reps. Edwin M. Snowe and Clarence K. Massaquoi, who are members of the Liberian delegation to the ECOWAS Parliament, were absent (considered distant).
It may be recalled, on Monday, April 30, 2018, President George M. Weah through the Ministry of Finance and Development Planning submitted the Draft National Budget in the tone US$562.2 Million to the Legislature for approval.
The 2017/2018 Budget, which began July 1, 2017 will expire on June 30, 2018; and the 2018/2019 Budget is expected to begin July 1, 2018 and end on June 30, 2019.