-Can the LRA, Foreign Affairs Generate US$181M for the Remaining 4 Months for Expenditure?
The House of Representatives and the Senate have approved a Recast Budget of US$536.2million, with several austerity measures, including cutting off 100% of other goods and services amounting to US$27.4 million. About US$181million is estimated to be raised for the remaining four months, March 1 – June 30, 2018.
In its 17th day sitting on Tuesday, the House approved the Recast Budget and immediately forwarded it to the Liberian Senate for concurrence. Montserrado County District # 11 Representative Richard N. Koon voted against the passage of the budget, insisting that the Recast Budget must be discussed to know the “details.” He argued that the swift passage of the budget without it being “opened for discussion” would be troubling.
“Amid the bad economy, the budget needs to be discussed and some of us can help to give our inputs,” Rep. Koon said. He is a full instructor at the Accounting Department, College of Business and Public Administration of the University of Liberia. Some of his duties include coordinating affairs of the department in collaboration with the chairperson and lecturing the following accounting courses; Accounting Principles, Cost Accounting, Intermediate Accounting, Advanced Accounting, and Government Budgeting. He has been teaching accounting for over 11 years.
The budget was passed following submission from the House’s Joint Committee on Ways, Means, Finance & Development Planning and Public Account.
The Senate also passed the Recast Budget on its 18th day sitting on Tuesday, about 21 minutes later, after it was forwarded by the House of Representatives.
The Joint Committee maintained that the recast budget aims to address resource constraints while ensuring efficient service delivery over the remaining period of the 2017/2018 fiscal year, from March 1 – June 30, 2018, for ratification by the House of Representatives.
It has been gathered that with the remaining four months, US$11 million has been particularly allotted from about US$181 million to do “quick-impact pro-poor developments.”
Some of the Special Quick-Impact Projects include a feasibility study for the AFL’s 200-bedroom hospital (US$200,000); digital registration at the University of Liberia and installing WiFi (US$300,000); paying the fees of all students for the West African Examination Council (WAEC) for the 2017/2018 school calendar (US$1.9 million); purchase and maintenance of traffic street lights in Monrovia (US$600,000); providing scholarships for doctors to undergo specialized training across the country (US$500,000), while another US$500,000 is allotted for Humanitarian outreach program by First Lady Clar Weah.
It may be recalled that in a letter to the Legislature on Thursday, March 8, President George Weah explained the reasons for the austerity measures: “To address resource constraints resulting from the challenging macroeconomic environment and the poor performance of most revenue lines, while ensuring efficient service delivery over the remaining period of the fiscal year; a number of austerity measures are proposed.”
The strategy is to protect essential items, such as compensation, drugs, food, among others, as well as institutions, including the Legislature and the Judiciary.
Now that the recast budget is approved, it will result in a balance of US$536.2 million, which is consistent with the Public Finance Management (PFM) Act.
In the recast budget, there are significant cuts in the purchase of fuel for the operations of government. The 55 percent cut affects all institutions except the Liberia Revenue Authority (LRA), medical facilities, the legislature, the judiciary and the security sector.
There is also a 55% cut to travels across spending entities except for the ministries of Foreign Affairs and State, as well as the Judiciary.
According to the letter forwarded to the Speaker of the House, some goods and services have also been cut by 100%. The austerity measures, according to the Chief Executive, necessitate some changes to address priorities of government.
The recast budget shows the consequence of the adverse budget impacts of a shortfall of US$83.7 million in expected revenue as at January 31, 2018, a situation that has necessitated a revision of the originally approved budget of US$563.5 million, to realistically align expenditure with revised revenue projections.
President Weah said the government can now make tough decisions in both the short and medium term to include fiscal measures to control expenditure and can do this by developing policies that are targeted at reducing inequalities, promoting inclusion in agriculture production; developing small businesses and the private sector, providing better quality and relevant education/health services; improving the investment climate, and addressing gender disparities.
The recast budget also highlights both recurrent and non-recurrent expenditure for the rest of the fiscal year and includes “new pro-poor interventions” amounting to US$9.6m on the revenue side.
Also, a few financing options are proposed, including securing grants (contingent upon certain triggers and agreements) from the African Development Bank, European Union, and the Governments of France and India.
The President also informed the lawmakers that the country’s revenue has also been affected by the impasse of the 2017 general elections and the lingering aftermath of the Ebola crisis. But he expressed confidence that the economy will “withstand the test of the moment and come stronger than before.”
According to President Weah, the administration is focusing on alleviating poverty, promoting inclusive and pro-poor growth.