Painful Rules to Cope with Revenue Decline

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The Assistant Minister for Budget at the Ministry of Finance and Development Planning (MOFDP), Mr. Augustine Blama, has disclosed that with the reduction of cases in Ebola, there are tentative signs that the government is declining in domestic revenues and increasing in spending pressures.

As a result of added spending expectations, the government has had to take some difficult and painful short-term measures by putting in place fiscal rules to realize some savings which are being redirected to sectors badly hit by EVD, Mr. Blama disclosed.

“Some of the fiscal rules involve prioritizing spending on Ebola patient wellbeing, payment of GOL salaries, halting all non-essential purchases including vehicles, furniture, fixture, reduction in foreign travel by 40% and reduction of fuel and lubricant consumption in all GOL ministries and agencies by 25% with exception of those in the Ebola response effort,” he revealed.

Mr. Blama made the worrisome disclosures yesterday during a one day National Budget Forum under the Theme: “Our money, Our Business, Mainstreaming Citizens’ Voices in the 2014/2015 National Budgeting Process” at a resort in Monrovia where he represented his boss, Minister Amara Konneh.

Mr.Blama said, the projected revenue for fiscal year 2014/2015 budget initially put at USD 559.3million has declined to USD 473.0 million while national budget was before the national legislature for passage.

He said the situation required the executive to revise the original budget to address some of the critical issues affecting the sectors hardest hit by Ebola such as the education, health, agriculture, infrastructure and the private sector.

The Assistant Minster for Budget blamed the decline in domestic revenues to the outbreak of the deadly Ebola epidemic adding that “the Ebola outbreak has struck our nation at the time efforts were being exerted to rebuild an economy devastated by fourteen years of civil conflict. We were at the point where we were beginning to see some positive results from our efforts at lifting people out of poverty.”

Public investments in agriculture, health, education, infrastructure and energy were providing direct employment for some while creating incentives for others to undertake private business initiatives to improve their livelihoods.”

He conceded that  the redirection of resources toward containment, prevention and eventual eradication of Ebola as well as tackling its effects on the lives of citizens have inflicted additional spending pressure on the  budget in the wake of declining activities in all sectors of the economy.

He said the ministry is consolidating short to medium term plans requiring substantial budgetary outlays from an already constrained resource capacity to kick start recovery efforts in the most seriously affected sectors.

According to him, the government of Liberia has allocated through the fiscal year 2014/2015 national budget USD37.0 million as an initial commitment towards the revitalization of the economy.  The amount will cover a health revitalization fund of USD22.0m, agriculture recovery fund of USD5.0m, education recovery fund of USD7.0 million and the private sector taking USD3.0 million.

“These funds are allocated through the budget to enhance a gradual return of these sectors to normal activities,” he stated.

Despite these interventions on the domestic front, he disclosed that the GOL is also committed to settling its domestic and external debt obligations.

He stated that in the current approved budget, the government appropriated 15.9 million for principal payment of domestic debt, 5.0 million for interest payments while 6.8 million is committed to external debt principal payment and 4.4 million for interest payments.

The forum was sponsored by the United States Agency for International Development (USAID), Institute for Research and Democratic Development (IREDD), International Research and Exchange (IREX).

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