Finance Minister Amara Mohammed Konneh will today, Thursday, January 22, lead a major crusade against delinquent taxpayers to collect government revenues.
The aggressive domestic revenue mobilization campaign by the Ministry of Finance is intended to boost the government of Liberia’s (GOL) revenue collection across the country.
GOL insiders told the Observer Business Desk yesterday that the Finance Ministry is launching this campaign in order to save the government from a prospective budget shortfall, a situation that is glaringly occurring as the GOL has already experienced a US$17.7 million shortfall in revenue collection for January, 2014. Minister Konneh has already assured Liberians that the fundamentals of the Liberian economy remain stable and strong to support vigorous collection of revenue.
His assurance comes amid widespread speculation that the GOL is experiencing a budget shortfall of around US$40 million. Konneh has been criticized for poorly managing the post-conflict Liberian economy, but he has vehemently denied this allegation insisting that the fundamentals of the economy remain sound and strong amid some challenges.
Speaking at the Legislature on Tuesday, January 21, when he appeared before the House of Representatives’ hearing on budget execution and revenue performance, Minister Konneh reiterated his assurance to lawmakers that despite the fall in the value of the Liberian dollar to the US dollar, the economy is not in trouble.
He informed the House of Representatives that the economy was not in trouble as it has been speculated by pundits. The Finance Minister committed to a vigorous campaign to raise the much needed resources to finance the Government’s development agenda platform under the Agenda for Transformation (AfT).
The Finance Minister used the occasion to provide updates on the execution of the fiscal year 2013/2014 National budget. He acknowledged that the late passage of the national budget last year had some implications for the budget implementation and on the macro-economy.
Minister Konneh explained that though the draft national budget was submitted to the legislature on time, it was not until the last week of legislative session that the draft FY13/14 was passed into law. Atop of the delay by the lawmakers to pass the budget law was a further delay by President Ellen Johnson Sirleaf to sign the budget. The President signed the budget in mid-October, 2013.
On the overall performance of revenue collection, Minister Konneh said out of US$296.5 million estimated to have been collected as of January 18, 2014; the Ministry has collected US$278.8 million to date; accumulating to around a US$17.7 million shortfall as of January 17, 2013.
Minister Konneh assured the public that while there is no need to panic, the Ministry of Finance will do everything to ensure that resources, to the extent of collectables, are collected. According to him, the collection up to date was not a small undertaking, and, “it was made possible by hard decisions and many sacrifices made by officials of the Ministry.”
On the budget execution, Minister Konneh informed the Legislature that there is a risk of delay in revenue of about US$47 million. He warned that further delays are expected due to the non-payment of the European Union budget support tranche of US$14 million as one of the education sector triggers was not met. He said the budget is under pressure due to the revenue delays and the additional demands on the budget of over $18 million.
Minister Konneh further warned that cuts are expected in all sectors, mainly in the use of goods and services budget classification, with the exception of security, education and health.
Meanwhile, the Finance Minister is urging the public that as his ministry strives to build a more robust economy with inclusive growth that will build social cohesion, stakeholders within the private and public sectors must be fully engaged in the process of economic development. “That, to me, is the challenge we face and we must face it together,” Minister Konneh declared.
After being bombarded by lawmakers with questions on the state of the Liberian economy, Minister Konneh concluded by assuring the lawmakers and the public that Liberia’s economic growth was sustained in 2013, led by iron ore exports, construction, and a strong performance in the service sector. He also said that this outlook, however, remains vulnerable to commodity price fluctuations, particularly for iron ore and rubber, Foreign Direct Investment (FDI), and donor assistance, including the partial withdrawal of the substantial United Nations Mission in Liberia force (UNMIL) that affects inward remittances.
The drawdown of UNMIL now requires the government to divert expenditure to the security sector, and would reduce consumption of local services. Disputes regarding concession agreements, particularly in the forestry, palm oil, and oil sectors, also constitute substantial risks. Faster job creation would be necessary to ensure stability. Consumer price inflation was 8.5 percent in 2013 compared to 6.9 percent in 2012, reflecting lower international food and fuel prices.
In response, House Speaker Jenekai Alex Tyler thanked Minister Konneh and his team for the briefing the legislature describing the Minister’s presentation as “very brilliant.”