Is the Central Bank of Liberia Broke?

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35 employees of the Central Bank of Liberia have been brought under the jurisdiction of the court and prohibited from leaving the country until the investigation into the alleged missing L$16 billion is concluded.

Is the Central Bank of Liberia broke? And is it so broke to the extent that public financial instruments held by individuals and institutions are purportedly being reportedly downgraded, is the million dollar question lingering on the kinds of the public.

The answer is yes, according to a Liberian financial expert Yanqui Zaza who made the disclosure at a Governance Commission one-day policy forum on the state of the Liberian economy held over the weekend at the Lutheran compound in Sinkor.

Mr. Zaza disclosed that the Government of Liberia (GOL) in 2016 owed commercial banks a total of US$ 42,435,165. He explained that an analysis of commercial banks’ loan portfolios shows that three sectors of the economy accounts for the stated amount remained outstanding at the close of the fiscal period. Those sectors, according to him are a) Trade; b) Construction and c) Services, while Manufacturing accounted for a mere 5 percent of the total.

He furthered that GOL’s over-reliance on what he calls User taxes which include Excise, Value added, Payroll, Income, Real Estate, Property, Sales and other related taxes to finance its budget is unsustainable because such a practice usually leads to the accumulation of huge debts borrowed from international financial institutions such as the World Bank and IMF.

Earlier, the President of the Liberian Bank for Development and Investment (LBDI) John Davies, from whom Mr. Zaza apparently took his cue, had disclosed during his presentation that the severity of this problem has created a situation wherein commercial banks have developed a tendency to display a rather knee-jerk reaction-NEXT- to those presenting GOL contracts and obligations as collateral for lending assistance.

Given the growing public outcry against rising economic difficulties induced by the current liquidity crisis and given the importance that the Daily Observer attaches to this matter, several attempts made over the past few weeks to contact the Central Bank Governor or any of his functionaries for comment proved futile until late Sunday evening when this newspaper finally succeed in establishing contact with Mr. Cyrus Badio, Public Relations Manager at the Central Bank.

When asked for comment on Mr. Zaza’s averments that the Central Bank of Liberia at the close of fiscal year 2016 owed commercial banks to the tone of US$42,435,165, Mr. Badio replied that he could not comment since such information was not availed to him, however promised to contact the relevant individuals clothed with the authority to speak on such matters. He did not say when, although requested the Daily Observer to hold on to its story until he had done so.

Meanwhile the Daily Observer has confirmed its readiness to publish the Central Bank’s comments in reaction to Mr. Zaza’s comments.

10 COMMENTS

  1. This information is indeed, a very disconcerting revelation. That the arm of government which supposed to be assuring citizens and businesses of the reliability and confidence in the financial status of the Liberian economy is bankrupt? That is one scary proposition! And could this strange phenomenon be as a result of once again, “downward global economic trend,” the usual alibi? Or mass looting everywhere in government in response to the coming takeover by another administration? Hopefully the next government will institute harsh measures to deal with this kind of glaring daylight robbery. When people are now reportedly laying claims to government vehicles and other assets, this bankruptcy information is equally suspect.

  2. CBL does have the Liberian currency. $US 4.4 M even more in equivalent Liberian dollars. The issue is that CBL does not have the power amount in Liberian dollars to use Liberian market women and men traders to exchange their Liberian dollars for less than Liberian monies. The silent majority will not allow any such amount in equivalent Liberia dollars to be allotted for disbursement on behalf of the Liberian people by this leaving incumbent unless encumbrances for inauguration scheduled for January constitutionally 2018 established 2017. In addition, the present Government until the 54th Legislature is properly seated in 2018. Since the appropriation is already legislated and stocks and bonds savings in commercial banks are not for Government but for these Liberian local people, in Liberian Dollars, The United States will need to balance equivalent in value to Liberian money on delivery in USD savings for 2017-2018. Accruals for public spending should be signed into law. No more will the Liberian nation be financially conglomerated. Let the People of Liberia be told. Do not reply this box.

  3. Re this very serious report by Mr. Yanqui Zaza, the National Legislature should hold public hearings at once to seek clarification from the following persons and institutions: Members of the Board of Directors, Former Governor Mills Jones, Present Governor Weeks, the CBL Auditors, Finance Minister Kamara, and Heads of Commercial Banks. All those found culpable in the premises must be held criminally liable and prosecuted under the law.

  4. This is exactly what happens when you employ your children and your friends — whether in government or private business; the result is almost, always the same.

    We need a government to will locate and freeze all of their overseas bank accounts along with confiscation of their hidden properties around the world — especially, in the USA.

    Shame, Shame, Shame…on you, Ellen Johnson-Sirleaf.

  5. When the last CBL Governor Mills Jones left, he left several millions of US dollars in the Bank coffers. This can easily be ascertain with the records. It has been less than two years and it is all gone. The new bank governor just provides any funds that Ellen needs. That was the crux of the friction between she and Jones. Jones was not allowing her to deplete the bank coffers.

  6. The fact is, Liberia is broke.The Central Bank is a part of greater Liberia. What can anyone except? A central bank can not function properly; when/if the country is broke with unemployment figure as high as 80%.

  7. If the report is true about an official run and raid on CBL, it conforms to the adage: “When the cats away, the miles will play”. For since the elections – related Code of Conduct fiasco, the country has been figuratively in suspended animation and literally engrossed with frenetic management of cascading crises. No wonder, then, amid pervasive want, anxiety and uncertainty, citizens feel as if no one is in control. It adds urgency to the need for a credible run – off election; and the empowering of a government (with multiethnic face) to speedily pursue economic viability. Certainly, not optional, we must quickly implode the sense of national powerlessness, before things get unmanageable: You don’t want to request force, again!

  8. If it is confirmed to be true, we as Liberians have a long way to go economically. The most disconcerting thing is that the new government (the George Weah’s administration) has not said anything to clear the doubts of the public; if the country is met broke or not!!

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