Salary Cuts Top 2019/2020 Fiscal Budget

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File: Speaker Chambers (2nd from left), flanked by Deputy Finance Minister for Budget, Tanneh Brunson (left), and Finance Minister Samuel D. Tweah, Jr. (2nd from right) another official, receives the 2019-2020 Draft National Budget for legislative scrutiny.

The Center for Policy Action and Research (CePAR) has released the result of a recent research it conducted with gloomy pictures of decreased budgetary allotments for infrastructures, and key socioeconomic areas.

In the wake of the result that is yet to be officially released, and passed into law, the 2019/2020 draft national budget has not being passed into law for full implementation.

“Therefore, the giving whopping allotments in salaries and operational costs to the Legislature, Executive and Judiciary branches of government, has been passed by the lawmakers.

The 2019/2020 draft budget is US$532,906,966, which US$489,956,966 or 91.9% goes to recurrent expenditure is yet to be officially made public.

CePAR’s research result indicates that US$34,599,815 or 6.4% of the total budget is allotted to the Legislature to defray expense attached to salaries, attend to basic operations including committee hearings among others.  Of the amount allotted the Legislature, compensation accounts for 77.74 percent.

For the Executive, the draft budget allots US$700,000 for the President to meet humanitarian efforts that are not defined, followed by the Judiciary that will be receiving US$15,467,612.00 in salary for the fiscal year.  Consultancy cost in the budget will take US$3,177,716.

Among the 11 governing sectors, including Public Administration, Municipal Government, Transparency and Accountability, Security and Rule, of Law, Health, Social Development Services, Education, Energy and Environment, Agriculture, Infrastructure and Basic Services and Commerce and Industry Sectors that are expected to receive, budgetary allotments in the national budget for fiscal year 2019/2020, the agriculture sector has the second lowest budget allocation with an anticipated spending of US$6,208,754 or 1.16%.  The least with a pocket change amount is the Tourism Sector of US$4,000.

All other spending institutions under the Agriculture Sector took huge cuts with proposed spending on supplies and inputs put at US$165,000 for the fiscal year.

Taking each sector categorically, allocation for the overall healthcare system is US$75,478,910 or 14.1%, US$6 million decrease from the last appropriation.

This allotment brings drastic decreases to spending entities across the health sector, except for the Ministry of Health itself whose budget was augmented as a result of USAID’s support of US$6.2 million, and the Liberia Pharmacy Board with a budget increase of US$1,600.

Spending entities affected by budget cuts, include, but not limited to the John F. Kennedy Medical Center, Jackson Fiah Doe Hospital, Phebe Hospital, National Public Health Institute, Liberia Medical and Dental Council, Liberia Board of Nursing, National AIDS Commission, etc.

Subsidies for most private healthcare providers were removed, while health centers that did not receive budget support in the past were allocated budget.  Among them are Gbarzon and Konobo Health Centers in Grand Gedeh, Gbondoi Health Center in Bong, Zekepa and Karnplay Health Centers in Nimba County, and Marshall and Kakata Health Centers in Margibi County.

According to CePAR, compensation across the health sector was cut by 9.2% or almost US$5 million; the largest cut in compensation for health workers in more than two decades and the only cut in compensation for health workers in the last 14 years.

Transfers or grants to all the county health teams also decreased while the National Public Health Institute of Liberia (NPHIL) got the deepest cut of about 70%.

The Education Sector is expected to grab US$81,557,132 or 15.3% of the budget; nevertheless, compensation for staff took a cut of US$1.2 million when compared to the past budget year.  Total compensation for the education sector is US$51,208,375, while last year’s spending was US$52,414,649.

All spending institutions under the education sector are said to be affected by huge cuts in line with what Finance Minister Samuel Tweah once referred to as “Salary harmonization,” and all other private institutions that once received subsidies were removed entirely except Cuttington University.

Youth and Sports sector takes US$2,487,918 or 0.46% of the draft budget with a slice in budget for developmental youth programs including the Monrovia Vocational Training Center (MVTC).

The National Football Team is receiving US$300,000 which represents 0.56% of the budget while all 29 National Sporting Federations and Associations will receive US$69,555.

Under roads and bridges, the amount of US$29,300,000 which constitutes 5.49% is allotted in the draft budget.  This is slightly below what was appropriated in fiscal year 2018/2019 which was US$29,663,236, but higher than what was actually spent last year in the tone of US$12,380,420.

It is not clear how much is allotted to the Security and Rule of Law Sector; however, CePAR’s analytical comparison shows that fiscal year 2019/2020 reduced allocations to several institutions in the security sector.  Those institutions include the Liberia National Police, National Fire Service, the Palace of Correction, Drug Enforcement Agency and the Department of Corrections.

Nevertheless, even as allocations to these institutions were reduced, compensations for staffs at DEA, Liberia Immigration Services, National Police Training Academy and National Fire Service were increased.

“Compensation for employees of the Armed Forces of Liberia (AFL) and the LNP took significant cuts in the 2019/2020 draft budget,” said CePAR.

CePAR’s analysis according to its release indicates that allocation for the Special Operations Services; Intelligence Services and Security operations under the National Security Agency (NSA) remain very high, with total allocation standing at $8.08 million.

The analysis shows that the Liberia Water and Sewer Corporation (LWSC) has the lowest budget support among institutions under Public Utility and Institutions.  When compared with appropriations of fiscal year 2018/2019, the draft budget has an allocation of US$411,061 representing 57% of previous appropriation.

Allocation for the Liberia Electricity Corporation (LEC) is increased by 21% in the draft budget, but compacted in a way that makes further analysis impossible to understand funds for transmission and distribution and other core activities of the LEC.  Rural Renewable Energy Agency (RREA) took a huge cut of 42% in wages alone with only US$16,424.00 allocated for fuel and lubricants and no dollar for core operations of the institution according to CePAR’s research.

The release quotes CePAR as noting that revenue estimates in the budget are not informed by quality projections as was the case of fiscal year 2018/2019.  The total envelope for fiscal year 2019/2020 is US$532,906,966, with a decrease of US$38,000,000 when compared with fiscal year 2018/2019 budget.

There is accordingly anticipation of a World Bank loan of US$40,000,000   to augment the 2019/2020 budget.

Tax revenue projections are much lower (US$25 million) for 2019/2020 than they were for 2018/2019; however, while projected contingent revenue for 2018/2019 of US$12.6 million was not raised, projected contingent revenue for 2019/2020 is US$47,000,000—US$34.4 million more than previous projection.

State-owned enterprises to contribute to the budget this year are the Liberia Petroleum Refining Corporation (LPRC), National Port Authority (NPA), Liberia Airport Authority (LAA) and the National Fisheries and Aquaculture Authority (NFAA).

Others including, but not limited to National Housing Authority (NHA), Liberia Telecommunications Corporation (LTC) and LIBTELCO are not to make direct budgetary support to the budget.

4 COMMENTS

  1. Funds from several national corporations such as Liberia Maritime Agency, National Port Authority, LPRC and many others are not captured in this budget and someone needs to explain why.

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