LBDI Pres. Endorses CBL’s Call for Printing Money, But…

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John B. S. Davies, III: "That is a radicle recommendation. "A lot of faith in the existing currency of banknotes has been lost."

The president of the Liberia Bank for Development and Investment, John B. S. Davies, has expressed his agreement with Central Bank of Liberia’s call to print L$27.5 billion to stabilize the cash flow in the country, but warned that the current cash shortage problem will not be solve if the currency remains the same.

Mr. Davies, who is also president of the Liberia Bankers Association, explained that in the midst of lack of public confidence in the current banknotes, it is prudent that the CBL change the money with a new note to avoid hoarding, which will still cripple the banking sector once the currency is not changed.

For him, if the old currency is not replaced with a new one, rather just printing the old volume of the same banknotes, it will worsen the crisis as people will not bring the money to the bank. Innstead, they will continue to withdraw and keep it at home.

“[If you print the same old money], the people will just add up what they already got but, when it is changed, they will be forced to bring it,” Mr. Davies said, according to FrontPage Africa. “We hold the view that it is not additional banknotes to increase the existing currency banknotes that is required to deal with this matter, it is a wholesale change of the existing currency of banknotes.”

Mr. Davies added that the public has lost interest in the current banknotes circulating in the market since the majority of them are all mutilated, so it will be prudent for the lawmakers to grant the CBL request of printing new money that will give the economy a new face.

Such a move, the LBDI President said, is crucial for the country to strengthen its monetary policy and an opportunity to clearly understand the reason for the shortages of the country’s currency on the market, and identify the hoarders.

“That is a radical recommendation. A lot of faith in the existing currency of banknotes has been lost. It is just what the market believes because of all the relatively unanswered questions about who has what and where it is,” he added. We will see where it is coming from. It gives our monetary policymakers the opportunity to do what we call national strategy research. The money comes in, they see it, they track it, and they know how to hold it based on how it infuses out,” he said.

Meanwhile, Mr. Davies had warned people to stop kicking against the idea of changing the money because of cost. Rather, they should support the government’s move collectively if they want to see the economy doing better, or it will serve as “a continuous distraction for this government and it will be a distraction for any government in the future as we continue to side-step this issue.”

Earlier, CBL Executive Governor J. Aloysius Tarlue told lawmakers during his appearance at the House of Representatives this week that the country needs L$27.5 billion to stabilize the cash flow in the country, as L$22.5 billion is already out of the banking sector.

The money, the CBL said, is needed to respond to the blanket outlook of the downward trend of the economy and will buy up government debts, a move probably designed to keep borrow costs low, but Governor Tarlue failed to state if the money will be the same legacy note or a new one.

“The issue of paucity of the Liberian dollars is a grave concern, and whether we need additional banknotes or we need new banknotes, the fact is we need money on the market to be infused into the economy in three years period,” Governor Tarlue told lawmakers.

The money, Governor Tarlue added, will be printed at a cost of US$21 million equivalent to about L$3.4 billion, while revealing that the recently printed L$4billion is part of L$25.3bn of which L$22.5bn is currently outside the bank.

Governor Tarlue added that the L$10 billion of the money in the banking sector is mutilated because it has lived its lifespan. Tarlue also blamed the coronavirus pandemic for the country’s present economic woes, but “stressed that the economic outlook can be redeemed certainly with the printing of the new banknotes.”

However, Finance Minister Samuel Tweah shut down the CBL’s argument and said that the printing of more banknotes would not solve the crisis until public confidence is restored in the banks.

“Printing money is not the solution. So even when we print new money the problem cannot be solved,” Min. Tweah said when he appeared on the 50-50 talk show. “And the reason why it cannot be solved is the quantity of money that is not coming back but staying outside of the banks.”

Min. Tweah further said that printing new money will become better when public confidence in the banking sector is restored, which is intended to ensure that people trust their bank to save their money instead of hoarding it.

 “Certain people will have to keep their money outside until confidence is restored. This way, they will start to bring it in since you can account for it,” Min. Tweah added.

9 COMMENTS

  1. People are not saving their money in the banks because, The 1995 World Best Footballer has the bad habit of telling the banks to credit the Liberian government the private citizens and private businesses’ money and he is NOT repaying the people’s money..!

    So, you think the solution is to print more money?
    Hell No!
    ####

    You Liberian bankers, need to start telling Mr. 1995WorldBest that banking does not work that way.
    Besides, if you print more money, you will instantaneously create a Hyper-Inflation condition because people will bring out their old money from under their mattresses and exchange it for the new bank notes. That process will double the volume of money in the economy and, in the absence of adequate goods and services (hello scarcity), prices would rise radically.

    To those calling for printing of more money, BEWARE of a Robert Mugabe’s Zimbabwe scenario !!
    If your wish is granted, soon you’ll be paying LD$1,000,000 for one loaf of bread. That is one million Liberian dollars for one loaf of bread!
    ___________

    And if that happens, Do Not say that a native of the soil did not warn you.

    • Boy Charles Jonathan Sogbie aka warningshot, you are just another BIG IDIOT those poor people have sent to represent them in the Capitol!

      You idiot Boy Charles aka warningshot, no President, Prime Minister, Chancellor, or Head of State has to ”tell banks to credit the Liberian government the private citizens and private businesses’ money” as you so ignorantly believe!

      BANKS OPERATE ON CREDIT..WITOUT WHICH BANKS CANNOT SURVIVE NOR EVEN EXIST! Boy Charles you are this dumb? Let me not go any further. What I have heard from you has actually made me to see what is in your head, as of today.

      Secondly, I now see where your extreme jealousy against President Weah originates. Your extreme jealousy and back stabbing against your former team make originates from his EXCEL ON THE NATIONAL, CONTINENTAL, AND WORLD STAGES!

      Stages which you wished and dreamed would have been your destiny, but unfortunately for you, you could not reach!

      And so when he became President, you wanted to either die or kill him! And this is when we your friends and team mates concluded that you are a back stabber.

      Let me repeat this, Boy Charles! You are just another BIG IDIOT! BANKS OPERATE ON CREDIT..WITHOUT WHICH BANKS CANNOT SURVIVE NOR EVEN EXIST!

  2. “The public has lost interest in the current banknotes….”

    What do you mean by this, Mr. Davis?
    In a given country, Liberia in our case, the public lose interest in a legal tender (any form of money) based on problematic/s in its durability, portability, acceptability, divisibility, uniformity or limited supply.
    It also simply means maybe I have been using the Liberians dollars but because of issue/s with it, I am going to henceforth adopt the Dollar or Bitcoin or Gold in all my transactions.

    Is it the case for Liberia? No, Sir!
    We have a currency called the Liberian dollar which is scarce on the market probably due to incompetence or criminal act/s. Get down to the core of the problem scientifically and propose ideal solutions.

    Do not forget our recent history: The Liberty was printed against the J. J. Roberts banknotes with the aim of asphyxiating the Charles Taylor’s rebellion, but it turned out that the Liberty became useless in the hands of the Amos Sawyer’s government. They rather became asphyxiated.
    Just in 2000, the Central Bank introduced new unified Liberian currency that absorbed both the Liberty and J. J. Roberts banknotes.
    And then when Ellen came, the current banknotes were introduced in 2016, accordingly, with enhanced security features.

    Have these new banknotes, with enhanced security features, lost credibility under the Weah’s administration, to want to print new ones?
    Are you considering the costs of printing these banknotes?

    Dear CDCians, I will reiterate my proposals to you guys:
    Put an end to the US dollars being used in Liberia as a legal tender. The only currency for local transactions should be the Liberian Dollars. In so doing, the paucity of banknotes on the market will magically come to an end.

    Or

    Form a government of inclusion with all political parties to help you guys. You are not finding your way out on the economy. Our people are seriously suffering. Let the rest of Liberia come in to help in a unity government.

    My Advice
    Do NOT print additional money as long as you do not have scientific proof/s that the presumed mutilated notes are really mutilated and stored in the coffers of the Central Bank of Liberia.

    Plead
    Do NOT destroy the beautiful economy you inherited from Ellen! Do not complicate our (ANC) tasks. We know where Ellen left off, we see where you are groping, maintain the status quo until we thank you in January 2024, we beg your pardon, CDCians!

  3. Mr. Davies is right, if you print more money as the CBL suggests, you still won’t get back the currency that is being hoarded. So instead of adding to the money supply by just printing the same bank notes, change the currency and start fresh. This policy will force people hoarding the old currency to bring that money to the bank in exchange for new currency. India did just that few years ago and I suggest CBL officials go to India to study how it was done. However, there is a caveat…some high-level officials might not support changing the currency because it will expose them if they’re hoarding billions of LDs. That’s the political minefield for them including George Weah. The CBL is so wrong on this issue because I suspect they’re trying to protect someone.

  4. Mr. African,
    You’re espousing a dangerous conspiracy theory that I believe is not in the best interest of Liberia and its inhabitants. I will not compare or equate your dangerous conspiracy theory with QAnon! For sure, your theory is false. For instance, when you assert that Weah inherited a good economy from EJS, you’re deliberately poisoning the minds of the Liberian people. Your provacative statement amounts to a smear. The Weah government did not inherit a good economy from EJS. Fact!

    During EJS’s presidency, money poured into the country from all directions. First, UN soldiers were stationed in Liberia for peacekeeping purposes. The UN peacekeepers got paid. In turn, the UN peacekeepers spent money on food, rent and other important personal items. The spending power of the UN peacekeepers gave a boost to the Liberian economy. When the UN authorities felt that Liberia could handle its internal affairs, the UN soldiers packed up and left. Finally, when the UN peacekeepers left, money did not circulate in the country as it did originally. That’s when the contraction of the economy began.

    Also during EJS’s presidency, the dreaded disease Ebola (2014-16), devastated the people of Liberia and the economy. In conjunction to Ebola being a drag, a lot of potential investors stayed away from Liberia for two odd years. In short, the Liberian economy began loosing steam a few years before Weah came to power.

    I am not here to dennigrate Johnson-Sirleaf! I’m not here to sing praises. I do agree that the Liberian economy is experiencing some headwinds. I agree that a lot of young men and women are seeking employment. I don’t think that the Liberian economy is on its back! I am of the opinion that the haters and critics of Weah are submerged in a state of denial and hostility. And I know darn well that politics is at work. However, I do believe that the opponents of the Weah government have an obligation to tell the truth and nothing but the truth. So help us God!

    • You termed everyone who spoke against the intent of the Weah administration to print more bank notes as “haters and critics of Weah”. Surprisingly, you did not offer any solution for the economic problems that is challenging the Weah administration.

      Seriously, why don’t you concern yourself with providing a solution to the challenging Economic problems that are drowning your Weah administration, instead?

  5. Jonathan Boy Charles Sogbe aka warningshot, it is you who should concern yourself with the responsibilities of a lawmaker and not go about exposing your reckless behavior.

    • You have every right to think however you want and part of that freedom is to convince yourself that I am Boyle Charles. I do not take any offense to that because “the best way to convince a Fool is to agree with him”.

      If you have the resources and really want to get an idea of who I am, here is a hint.
      Ask the site administrator to expose whereabouts based on IP Addresses. Maybe if you find out that I’m posting my comments from half-way around the world — relative to Liberia — that disappointment would be enough to educate you.

      I will NOT respond to your reference to “reckless behavior” because you made that comment, assuming that I were someone else.

      Any other person in your shoes would have considered whether I am Male or Female before calling me “Boy Charles”.

  6. Mr. Warningshot,
    Your fired salvo was off target by a long shot! My comment did not address the issue of printing money as you’ve alleged. Re-read what I wrote.

    Second, in my comment above, I responded to a commenter (Mr. Petarus Dolo) who claims that Weah inherited a good economy from the former president, Madam Ellen Johnson Sirleaf. I categorically dispute that bogus claim. I will always dispute such a charge because it is healthy and spiritual to tell the truth.

    This is exactly what I said, “I am of the opinion that the haters and critics of Weah are submerged in a state of denial and hostility”.

    In the same document, I wrote,
    “I know darn well that politics is at work”.

    Once again, in the quotes above, I didn’t say a word about “printing money”. I stand by what I said. I fear no reprisals.

    Mr. Warningshot, I am not against the idea of printing money. If the printing of money can somehow help in terms of stabilizing the Liberian economy, I’d say go for it!

    I am not a CDCIAN. Sometimes, my sympathy for Weah gives people the impression that I am a foreign henchman of his. I am not his propagandist either. In fact, I think that my disgruntled critics are misguided and delusional. Some of my critics maintain the silly view that I am “paid under the table” by Weah. Bunk! I have never seen Weah in person. I have never spoken to him or his closest friends. Weah is a human being. He makes mistakes like everyone of us. We’re all perfectible.

    The Untold Truth:
    Weah is sometimes unfairly maligned. For instance, Weah did not “inherit” a good economy from his predecessor, Madam EJS. Furthermore, there’s no evidence that suggests that Weah murdered the “fallen four” last year for ritualistic purposes. Somehow, Weah’s haters and critics want the whole world to believe that the economy of Liberia is damaged because of his poor leadership skills. That’s not true at all. The real truth of the matter is Politics! His critics want him dethroned. Because of politics, fabrications arise from all directions.

    Lastly, I have consistently railed against the lawmakers of Liberia because of their insensitivity towards the people of Liberia. I mean it! Yearly incomes such as $10-15,000 per month by a Liberian lawmaker is outrageous. My argument is, has been and will continue to be forthright. If the lawmakers could use their heads properly, their monthly income could be cut in half, at least $5-7,500. By doing that, money will be saved and the economy will move up at least a percentage point.

    Printing New Money vs Using The US Dollar:
    My “suggestion” will be shot at in the sky by Weah and all Liberians, including you. But, that’s my suggestion!

    I suggest that we revert to the use of the US dollar for a short period of five years. Why? The use of the USD will stabilize our economy. Oh yes it will.

    Forget about people who say, “We are grown. Our neighbors have their own money. We can do it. Why not us?”

    My response…..
    Ghana is not Liberia. Ivory coast, Nigeria and all countries do not have our problem. We should do what’s in our best interest. Period.

    Peace

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