Gov’t Changes Fiscal Budget Year

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Finance and Development Planning Minister, Samuel D Tweah Jr., making presentation at the officail Launched of the New Budget calender year.

— Takes effect in 2022

The Ministry of Finance and Development (MFDP) has officially changed the government of Liberia’s fiscal budget year from July 1 to June 30, to January 1 to December 31.

The change, according to the ministry, is geared towards maintaining macroeconomic stability and sustainable growth in the wake of the country’s recovery from the coronavirus.

“Today, I hereby declare open the formal processes for transitioning to a new Fiscal year as defined by Section 4.16 of the Amendment and Restatement of the Public Financial Management Act of 2009. We are formally beginning this journey to put an end to these complaints and to achieve the long-desired symmetry,” said Finance Minister Samuel Tweah.

Minister Tweah, explained that the process of transitioning to the new fiscal calendar of the national budget puts the country in alignment with ECOWAS countries, particularly since the Community is transitioning to a common currency era.

The event, held on Monday, October 26, 2020, at the Ministerial Complex in Congo Town, was attended by heads of various government ministries and agencies as well as State owned-enterprises. He said ECOWAS has repeatedly flagged Liberia’s July to June fiscal year as a serious problem that had to be remedied for the purpose of achieving symmetry in the multiple processes being pursued under disparate ECOWAS protocols. 

The change, Minister Tweah said, will also align with the fiscal year of the Central Bank of Liberia, which runs a January December calendar. So, one can clearly see the cornucopia of confusion the July July calendar exacts in the same country and region. Of course, the CBL had been able to run a January to December process because it obviously does not require any legislative approval. 

But there are also serious risks and disadvantages that have to be managed effectively, and some of these risks and issues will be flagged during subsequent presentations.  

Minister Tweah explained, “One risk is that the switch is out of sync with the legislative calendar since the Legislature would be required to pass the budget at a time they are supposed to be on recess.” 

The country’s fiscal manager told heads of government institutions that under the current arrangement, the budget must be submitted by end of April, giving legislators three months to consider the budget before June 30. An analogous process will require that we submit the budget by the end of September, giving the Legislature October to December to consider passage. 

He added, “This means our legislators would probably and practically be required to change their legislative calendar. This is a huge issue that requires serious engagement and the President has shown a strong willingness to lead this engagement with the lawmakers. 

“Then of course we have the Judiciary branch of Government, which has its unique schedules that may be seriously impacted by the change.” 

Minister Tweah said the other risk is that the policy change demands a greater level of work at a time Liberians are preparing to enter into the holiday season. “This, he said, will have to require a shift in cultural pattern of work within and across the Government. For example, to pass the current budget, extraordinary work had to be undertaken in the three months after the end of the budget year.

“If similar things were to happen under the new fiscal calendar, people would have to be overworking for the Christmas season. To avoid this outcome, staff across Government would have zero margin for error and the budget calendar would have to assume an almost religious dedication to avoid heavy work during the Christmas season.” 

He said the comfort they (we) take from this is that other countries in the West African region have similar schedules, so, there is no reason why it should be a very difficult thing for Government workers to master those same schedules. 

The Finance Minister further indicated that the timeline for the transition appears tight, “So active engagement of all stakeholders commences immediately after this formal launch of the transition process. President Weah will lead the high-level engagement with leaders and stakeholders from the three branches of Government with the aim of accelerating and smoothing out the transition.” 

Citing section 65.2 of the revised Public and Financial Management Act law (PFM Act) states that in implementing this change, “There shall be a special budget implemented by the Legislature for a six-month period to facilitate the change in the fiscal year; the special budget shall be prepared to cover estimates beginning on the first day of July 2018 and ending on the 31st day of December 2018. So, according to this revised PFM Act, we are already two years behind.”

This six-month budget, according to him, will now have to be prepared for July to December of 2021. “So in July of 2021, we are running on a six-month budget. Concurrent to this, we must also be preparing to submit the January-December 2022 budget to the National Legislature by September of 2021. All of these require an extraordinary amount of work and dedication across the entire Government. “

He added, “I have no doubt that we can deliver on these changes in the months ahead. We call on all relevant staff across Line Ministries and Agencies, and across branches of Government to commit to the rigorous schedules. We will work with the National Legislature to ensure that we resolve all challenges in the months ahead.” 

According to him, in 2018, the National Legislature enacted the Amendment and Restatement of the Public Financial Management Act of 2009. In section 4.16 of this revised PFM act, the National Legislature defined the new fiscal year to run from January to December. 

Minister Tweah further commended President  George Manneh Weah, the Speaker, President Pro Tempore and members of the National Legislature for revising the PFM law that now makes this transition to the new budget calendar possible. 

He then extended special thanks to the Liberian Cabinet for endorsing the law, by which endorsement is implied by the cabinet’s commitment to ensure the law’s full implementation.

Minister Tweah further acknowledged the Deputy Finance Minister for Budget, Mrs Tanneh Brunson and other deputy ministers and staff for commencing the process to bring the revised law into action. A law is only as good as its execution.

He said under the current regime, the President is constitutionally mandated to report revenue and expenditure figures spanning January to December of the previous calendar year, but this previous calendar year is always the sum of two fiscal years, half of the previous fiscal year and another half of a current fiscal year. 

Minister Tweah said, “This is not ideal since two fiscal years may have different policy considerations that may inform revenue and expenditure patterns and it will be important for the President of the Republic to report the numbers consistent with policy implications accrued under one fiscal year,” noting that under the mandate of the President and acting in concert with Legislative enactment and supported by the full endorsement of the Liberian Cabinet,” said the Minister.

3 COMMENTS

  1. Manipulations! There is no genuine reasons for this change, all it is showing is that powerful men are emerging in Liberia; this budget period has been changing from one period to another for years: Pre-coup: June-July; post-coup: January-December; Interim period: June-July; Taylor Era: June-July, Bryant Era: June-July, Ellen Era: June-July and Weah Era: January-December.
    Our budget period is always flipping and flopping, as if, there is no law controlling same; this law change is sudden that experts had no time to debate it or had an input, the legislature passed it with speed as it did not required the people to know.
    Another issue, is the addition of another department at the MFDP; the Depart of Accountants and Comptrollers, as I understand it is to account for government assets, in essence is an auditing functions, which in my view is overlapping of functions of other agencies of government: GAC, LACC and the famous, IAA, but again it sailed through the legislature, as if the Executive is the giant in the nation and the people are nothing to be listened to.
    This whole law of changing the budget period and the addition of another department at the MFDP, thus tempering with the Public Finance and Management Law(PFM) is done at the whims of the manipulation of the present Minister of Finance and Development Planning; so will the Minister audit himself? Dangerous times are now looming in Liberia, we have forgotten so soon, before Weah knows it, it be too late. This man has the dictatorial tendencies and not Weah!

  2. Gbada J. Flomo

    You got it right; manipulations is the right word.

    Tweah, the finance minister, must tweak the budget over and over to reflect the dreams and aspirations of Weah and his CDC establishment if he wants to keep his job.

    Also as a CDC ideologue, the minister must be careful in carefully crafting the language of the budget so as not to create the impression the reason the budget takes so long to be passed is Weah and his people do not see enough funds transfer from national causes to their private ventures.

    Tweah is good in creating guises with his use of language. For example: after padding the government payroll by forcibly putting a lot of unqualified CDC partisans in strategic civil service jobs sometimes between 2018 and 2019 for political purposes, government finally lost the capacity to meet-up with its payroll obligations.

    The problem was further compounded by an IMF prescription that if the Liberian government was to stay afloat, then it must reduce its payroll costs and streamline unwanted expenditures. Tweah seized this opportunity to characterize this IMF imposed retrenchment exercise as, “Government salary harmonization process.”

    You are right brother. Manipulations are what they are!

    • Per the Liberian adage, “Ninety-nine days for rogue, one day for master”. The day of reckoning is in sight for Weah, Tweah, McGill, Koijee, and the rest of the incompetent CDC rogues. Tweah is not as smart as he thinks he is. He can manipulate data all he wants. All I can tell him is that “all good things come to an end”. He will account for our $25 million and all the funds he and the CDC rogues have mismanaged

      Lest the CDC forgets: TWP ruled Liberia for 103 unbroken years and met its demise in 1980. Doe’s NDPL ran havoc on Liberia and Liberians for a decade and crashed tragically on September 9, 1990 at the hands of PYJ. Taylor killed for 14 years, was handcuffed in 2003, and now vacations in a nice ICC jail/underground hotel in Durham, England.

      Weah and his gang have failed to study history and will pay dearly like their predecessors should they remain on this destructive path. Ellen will be right behind them to account for her corruption.

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