Credible reports reaching the Daily Observer late last night say President Ellen Johnson Sirleaf has signed the National Budget Law for fiscal year 2014/15, but vetoed a line item which calls for signature bonus in the amount of US$25 million on account of oil blocks.
The National Legislature passed the budget recently, increasing its re-adjusted revenue envelop from over US$473 million to US$660 million, contradicting the actual numbers highlighting declining revenue and huge government deficit.
They had also increased their salaries and benefits amidst the economic challenges in the face of the Ebola crisis.
Our Business & Economy Correspondent George D. Kennedy reported earlier that the Liberian economy has receded by over 6 percent projected with real gross domestic product (GDP) growth dipping further downward to 0.4 percent due to the ongoing Ebola crisis.
Kennedy further stated that with that downward trend of the economy, investment and export as well as government spending as functions of the economy have all been hit due to the crisis; “consequently, the realization of the segment added to the Budget by the lawmakers was not feasible.”
The present Ebola crisis has made investments to dwindle as contractors and companies declared force majeure and left the country. It, however, has not stopped the government from paying workers and ensuring that public institutions function – which ultimately creates extra spending pressure on the government.
A revenue expert had told this newspaper Tuesday how the government would have collapsed had the World Bank and other multilateral institutions and bilateral governments not given direct budgetary support to pay health workers’ salaries and settle other costs. “The best we can do is to operate on core revenue only,” said this expert who preferred anonymity.
Apart from the initial draft budget envelop of US$473.2 million, lawmakers included US$7.047 million as additional revenue from the budget hearing. In addition, they also made the following adjustments US$24 million core grant, US$50.3 million contingent (grant) revenue and US$70.6 million (core) borrowing as well as US$10 million borrowing (contingent) and US$25 million signature bonuses for oil blocks 6, 7, 16 and 17, respectively.
By increasing the revenue envelop of the budget by US$186.9 million and increasing their own allowances and other benefits, many economists were left to wonder where the government will raise additional revenue from to complete the financing of the budget when deficit is already above US$305 million.