McGill Predicts Harsher Economy

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Minister of State, Nathaniel F. McGill

— Says Liberians should be prepared for more dire liquidity crunch ahead

Liberians could face more dire economic times next year as a result of an increased shortage of the Liberian dollars, claims the Minister of State for Presidential Affairs.

The prediction, which was made by Nathaniel McGill, who is the Minister of State and Chief of Staff to President George Manneh Weah, was based on his belief that the present liquidity crisis came as a result of the 54th Legislature’s decision to deny the Central Bank of Liberia’s request to print L$7.5 billion instead approving the printing of L$4 billion.

Min. McGill argued that his forecast is unavoidable if lawmakers, upon their return next year, refuse to authorize the CBL to print additional new banknotes to mitigate the current liquidity crisis, which has limited cash flow in the country. It is a situation that has forced banks to ration daily cash-withdrawals.

If the CBL’s request is denied again, Min. McGill said, the situation will be far worse, as Liberians will find it more difficult to access cash for business transactions and will be served with more mutilated banknotes.

According to him, the current liquidity situation needs urgent attention from the lawmakers if Liberians are to easily access the Liberian dollars next year for business transactions.

“It [has] to do with the country and we [have] to change the money. It is purely a Legislative responsibility. If we do not have money in this country, they are lawmakers; they have the power to authorize it. If they do not authorize it, we will not have the money. Then, the rotten money will be there. Sooner or later, we will not have Liberian dollars to use again because of the kind of Liberian dollars we have. By the time the money gets mutilated, you can’t find it”.

“If the lawmakers do not agree to change the money, Liberian people will get problems with the Liberian dollar. They have to agree to change the money. We can’t find the Liberian dollars because majority of the Liberian dollars are rotten, “said Min. McGill in a video interview with a journalists recently.

Blame the Legislature

However, Minister McGill in that interview shifted the blame of the scarcity of the Liberian dollars from the executive branch, like the CBL did last week to the lawmakers.

In a press release, the CBL said the current financial crisis could have been avoided if the Liberian Legislature had approved their request to print L$7 billion.

The bank added the L$4 billion approved by the legislature was inadequate to replace the current amount of mutilated banknotes and, at the same time, meet the liquidity demand in the banking system.

“In its effort to preempt this seasonal pressure, the CBL in 2019 forecast L$7.5 billion based on its analysis but was authorized to print only L$4.0 billion. This amount which was brought into the country in July this year, was inadequate to replace the current amount of mutilated banknotes and, at the same time, meet the liquidity demand in the banking system,” the CBL said in their press release.

Following the CBL, McGill said the scarcity of the Liberian dollar is not the responsibility of the President but the lawmakers who have the constitutional responsibility to authorize the printing of new or additional money, but are failing to do so.

Min. McGill argued the recent failure of legislators to authorize the printing of new or additional bank notes as requested by the CBL is having a serious adverse effect on the country, the economy and people.

“This is pure legislative responsibility. The lawmakers have to decide that… we have to change the money. If we don’t agree, we will all be here and we can’t find the Liberian dollars,” said McGill.

Meanwhile, the President’s Chief of Staff added that the firing of underperforming ministers will not solve the multiple problems in the country, including the scarcity of the Liberian banknotes.

“I know people want the President to fire people everyday, but that will not solve the problem. Sometimes you have to give people the opportunity to be able to do the right thing,” he said.

The defense from Min. McGill and the CBL come as banks continue to experience a growing horde of people forming in queues just to get cash, which has been in short supply. Although the Liberian and US Dollars have been in short supply for months, the squeeze has intensified in the last few weeks forcing banks to turn away customers as they simply don’t have enough cash in their vaults due to limited cash  received from the CBL.

Despite the positive African Development Bank outlook, the current liquidity crunch reminisced the same problem in 2018, meaning Liberians are in for a very rough incoming new year as the situation might persist for much longer than expected.

According to the AFDB, the Liberian economy was going to recovery by 1.6% in 2020, underpinned by mining, forestry, and agriculture with improvement in Macroeconomic stability due to the implementation of an IMF-supported program improving fiscal and monetary policies, which “tackles structural rigidities to create a favorable environment for private investment.”

However, such improvement might likely not be realized as the county is not just struggling to ensure cash flow but also finding it difficult to raise enough revenue to pay its wage bills and local debts.

Also Min. McGill, who has so far barked against reshuffle is laying the blame squarely at the legislators’ feet, since they decided to do their job by questioning the rationale behind the L$7 billion dollars printing request when the CBL has been finding it difficult to ensure that the country’s money is not predominantly outside of the banking sector.

The situation between the Executive and the Legislature started when President Weah’s administration asked lawmakers to grant the CBL request to print additional L$7.5 billion dollar banknotes to address the problem of money shortage in the banking sector.

Though the request from the Executive was endorsed by a recommendation from the Senate Committee on Banking and Currency, chaired by Senator Marshall Dennis of Grand Gedeh County, the Senate plenary did not endorse the committee reports on ground that there were lots of Liberian dollar in circulation, so printing such a huge volume could have been bad.

The senators argued that such a move could have put the Liberian people in serious financial jeopardy, because many financial and economic questions have gone unanswered, especially when the money in circulation at that time (2019) was L$21 billion that needed to be removed from the market.

Meanwhile, Min. McGill has said that it is wrong for Liberians to continue to blame the President for their economic difficulties in the county instead of holding those appointed accountable.

“We who are Cabinet Ministers; you know sometimes people do not blame us. They blame the President for everything, but we [have] to do our job. I think the message the Liberian people are giving us, the Cabinet Ministers will understand so, when the President starts to take actions our people will know that the President is serious. It’s not that the President is joking”. Min.McGill added.

10 COMMENTS

  1. What McGill knows about money or banking to be spokesperson on finincial matters in Liberia? But come to think of it, the man is darn right. After all, the blame for the mess we are in lies squarely on the laps of our tunnel vision legislators, especially our so-called senators and why? They are the ones after all, responsible to advise the president and subsequently consent to names submitted to them to serve in the cabinet.

    And often times the public will cry out in opposition to some of those nominations in recognition of their known incompetence and unfitness for the designated jobs, but yet and still, our self-centered senators will confirm those nominees irrespective of the tinted reasons for the public outcries, so long as the nominees pay to play.

    From day one, the president was told in no uncertain terms, for example, of the ineptness of now prime minister McGill to serve as minister of state but he refused to listen. And once the man has become his (the president’s) special aide in cleaning him up after reportedly peeing and vomiting on himself following numerous midnight drinking sprees, how could he ever get rid of such a confidante? It is even useless to mention others like Samuel Tweah and Jeffery Koigee as some of the rotten apples in this govdernment.

    So prime minister McGill knows exactly what he’s talking about.

  2. What is this idiot McGill guy talking about? He knows very well that the Liberian Legislature decided they would NOT authorize the printing of 7.5 billion new Liberian notes until he and the rest of that roguish bunch known as the “Weah play-play government” comes clean and satisfactorily accounts for the still “missing container” with 16 billion Liberian dollars and the 25 million US dollars they “mopped up” or swindled.

  3. The poorly written constitutional provision that allows the Central Bank to seek authorization from lawmakers before during whatever is best for the monetary and fiscal policies of the in stabilizing the economy has created a serious political interference and influence in the money market and chains. Nothing can be done by the regime of the nation’s Central Bank. No monetary innovation as to address the issues of money supply and demands without the lawmakers involvement and interference.
    Lets take for instance and give some benefit of the doubt to the people at the nation’s Central Bank, that after recording all statistics and after reviewing those statistics, the Governor of the Bank through its board members recommended for a certain amount of banknotes to be printed. Here is the problem, how does a political institution with oversight responsibility to make laws will determined what the Central Bank needs ? And how much the Bank needs ? To the extent of suggesting the amount of banknotes that the Bank can have for X amount of months to X amount of year ? And when the Bank runs out or low in supply, come back and ask the lawmakers ?
    The Bank said they requested 7 billion in local currency to be printed, and with all the statistical informations before the lawmakers, they say that they will authorized 4 billion to be printed. What was their decision based on ? Are they authorized to manage the Bank ?
    Does the oversight responsibility of the legislature allows the lawmakers to upstage the functions of the Bank ? Was that the reasons the constitutional provision was poorly planned and written ? To micromanage the Bank ?
    As it stands in the exchange rate between the US dollar and the local currency, the Bank is issuing out more local currency every day than what is being printed, or anticipated. One US dollar to 200 local currency is given out. Before one can tell what’s going on, the Bank is almost out of local currency. It is not like the Bank is printing the local currency every day to avoid a shortage. They are not printing every day. And they cannot keep coming back to the lawmakers to seek authorization from month to month. In the US, the Federal Reserve prints money every day or 24 hours. The Federal Reserve Chairman does not seek authorization from Congress to PRINT ! Although the Act was created by Congress and they do have oversight responsibility.
    The authorization law should be removed. This is business, this is financial fiscal policy, this is Monetary supply and demands determined by market principles. NOT POLITICAL POLITICS TO BE DETERMINED BY LAWMAKERS !
    The recent legal fiasco about who authorized the printing and how much was authorized has its foundation in the constitutional authorization law. And is political being abuse by the lawmakers’ overreached political power. Make the Bank more accountable to the Board and more in depth independence. Now, everybody has to wait for the lawmakers to return before normal business can starts. Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ! What A God Forsaken County ruled by Niggars . Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ! They just do not know when something is not functioning properly and administratively.
    Laughing out loud. HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA ! WHAT A FOOLISH NATION AND PEOPLE LIVING IN A GOD FORSAKEN COUNTRY THAT REFUSED TO DIE AND GOING ON WHERE.

  4. The truth or falsehood of what a person says has nothing to do with his personal character. So, even the devil in hell sometimes speaks the truth.

    However, I differ with McGill for instead shifting the blame on the legislators only, when his boss, Weah, has had the political clout all along to make them pass meaningful legislations that would positively impact the lives of the people. But on the other hand, he wasted his political capital on the unconstitutional removal of former Chief Justice Jan’neh, emptied out the national treasury to build his private empires resulting in the government not being able to pay its civil servants and undertake any major national developments. And finally realizing his popularity has rapidly dwindled, he commenced a reign of terror and fratricidal blood letting to solidify his grip on power.

    McGill cannot convince me or anyone else for that matter, Weah’s problems in the past had been lacking the political will to make his figure-headed and usurped legislators come in his behest when he needed them the most.

    Yes, 2021 and even beyond will bring tougher times because of reasons that are so obvious to the country now. How can there be Liberian currencies to spend when the administration is mired in huge financial scandals? Until the vicious cycles emanating from the profligate spending of the nation’s resources take their full course, Liberia’s economic wheel is stuck in the groove.

    The average Liberian has yet to see light at the other end of the tunnel!

  5. Well, most people, especially the young eligible voters, thought that the best footballer in Liberia can also be the best politician in Liberia. Hence, nothing could stand in the way of the majority young to catapult their “Jor” Weah into the Executive House – albeit overwhelmingly.
    But the fortunate thing is that those dumb headed illiterate youth are also crying against their Pro – Poor half illiterate chief.
    Chickens come home to roost.
    Julius A. Momo – Stone. USA

  6. If the national legislature did turned down a 7.5 billion LRD, Liberian money, it might have been for the same reason that the Executive received a discretionary 4 billion Liberian dollars because the microeconomics of internal inclusions for domestic growth was not prioritized. The CBL and Ministry of Finance might have lacked the capital connection to rural commercialize trade and industry from urban Liberia in this December 2019 projection, simple because the decree to have Liberian currency approved by the Legislature is non functional was changed by the military junta (constituted in 1986 against the 1848 standard), and amended 1994 when the National Bank became CBL.
    SOLUTION OF THE BLAME: If the monetary shortage now in Liberia is to be blamed on the inability of the legislature to kick this decree out to eradicate dictatorship or tyranny to reinstate the currency printing exclusively to the Central Bank, than the fault we agree is also by the Executive branch which also allowed its responsibility of currency printing to be striped during 1986 and 1994. We must now solve this problem by making sure the principle 7.5B was not overstated or understate; with a mini audit after giving the balance 3.5 billion Liberian dollars in new print to CBL, since this is urgent. For example: How was the 4Billion expended? If the balance 7.5 less 4 B is resoled as an emergency expense because some say bit IMF macro intake, Should the President exercise his emergency power to order printing? Will the 3.5 Billion be enough to solve the immediate CBL bankrupt issue and if not why? The additional amount should be allowed without any “international reserve target” or question because as we can see the people need their Liberian monies on demand to survive. The printing of Liberian Money is a need and an internal affair can cause no inflation since it has yet to produce finished products on par with the United States Dollars especially when hardly any inventions or production is in the economic interim. The Liberian points only to Liberian goods and services produced in Liberia to activate outer trade. We should set Liberian printing targets to balance domestic products.

    Best of Luck.
    Happy Holidays

  7. The Liberian Congress should, in the future, have no part in currency printing because there is a tendency to connive executive and legislative powers. Unacceptable to the equality of Liberian constitutional separation.

  8. You are the face of the government and in charge of the state! The state is falling apart and your solution is to place blames instead of a proposal to repair!!! Corruption has and will kill more people in Africa than Corona Virus!!!

  9. Of course in the process of revisiting for sifter the laws tampered with in the past, and present non committed officials offering free labor to get new positions from the President, and literate fools who fraud the illiterate and common educated, many will be dismissed in the coming year by the Liberian nation. You could still be working for the Liberian Government and still not a Liberian. This means that if Liberians employ your services through elections and appointments and you do not meet the standards set by your promise to serve the Liberian people, the nation will oust you out as a people.

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