— But senators Cooper, Dillon, Sherman, Coleman, others urge caution
The Senate Committee on Banking and Currency, has recommended that Senate plenary authorizes the printing of Liberian dollars banknotes in the denominations of L$20, L$50, L$100, L$500, L$1000, and coins be minted in the denominations of L$1, L$5, and L$10 as proposed by the Central Bank of Liberia (CBL).
But during a period of very late afternoon debate on Monday, September 16, 2019, several senators took serious exceptions to the recommendations contained in the seven-point proposals.
The report of the Committee chaired by Grand Gedeh County Senator Marshall Dennis, noted: “Having exhaustively propounded on the issues, it can be concluded that the past regime infused into the economy unaccounted banknotes that is causing high inflation rate in the country; furthermore, the United Nations Mission in Liberia (UNMIL) draw down and the Ebola crisis, are having serious impact on the downward trend of the economy.”
In so doing, the Committee urged the Senate that if it must help in resuscitating the country’s ailing economy, “the printing of a new banknotes is a must, and must urgently be done.”
In its seven-count recommendations, the Committee requested that the plenary of the Senate authorizes the printing of new banknotes to completely replace the ones on the market; that the banknotes should be printed in a high grade and carries more and sophisticated security features to prevent counterfeiting, and the likes; that the CBL confines itself to the proposition document submitted to the Legislature for the printing of the currency, especially the mode of exchange enshrined in the document, as well as other monetary policies designed to avoid missteps and mistakes in the past.
The Dennis-chaired committee further recommended that the CBL put stringent policies and control measures in place to prevent hoarding, and other forms of economic sabotage; that the Senate deals with the CBL proposal to print the total amount of L$35 billion in various denominations as proposed.
The Committee continued, that the Senate authorizes the printing of Liberian paper banknotes in the denominations as L$20, L$50, L$100, L$500, L$1000, and coins be minted in the denominations of L$1, L$5, and L$10 as the CBL has proposed, and for reasons aforementioned, and that the Senate “grants the CBL authorization to print the Liberian dollar currency as proposed through a resolution signed by its two third majority members, and done in the Committee room this 13th day of September, 2019.”
Immediately after the reading, Margibi County Senator Oscar Cooper, sharply reacted to the Committee’s report, wondering why the CBL should request to print L$35 billion, when the money in circulation is L$21 billion that needs to be removed from the market; “what becomes of the difference of L$14 billion, which was not properly answered by the Bank Governor.”
After the L$16 billion saga with the Liberian people, “this money will fall on them if not managed properly. We as committee members did not have due diligence to debate this within committee. If this Senate votes to approve this L$35 billion, we will put the Liberian people in serious, serious financial jeopardy, because many financial and economic questions have gone unanswered.”
“Whatever we are doing now must be done with due diligence so that posterity can be kind to us; so colleagues, please let the Committee take this report back, and bring it to us after our return in January,” Senator Abe Darius Dillon recommended.
The Senate legal mind, Senator Varney Sherman, a lawyer by profession, recalled suggesting to President George Weah during his meeting with the Legislature months ago, that as long as the Liberians continue to believe that, “some of our money in places that they don’t know, especially outside of the banking system, they will not have confidence in our money, and that lack of confidence alone impacts the value of the Liberian dollar. I suggested then at that moment that we ought to change everything on the market, and replace it with new notes, maybe that suggestion has an influence of what has come to us today.”
Sherman accused members of the Committee of “some fundamental issues it did not consider, such as the suggestion to the production of coins, which he said that the cost for producing coin is more than the value of the coin.”
“I will vote against L$1000 banknotes and coins. How do we have control if we allow them to keep L$35 billion in their vault? I am afraid that the Liberian people will not judge us well when they look at our immediate past history, as to how we managed L$10 billion, and then we tell them that we want to print L$35 billion,” Senator Sherman warned.
Meanwhile, debate continues in the afternoon today (Tuesday).
President Weah recently wrote the Senate, through the Legislature requesting authorization to print new local currency, to replace the current one.
In his communication read before Senate plenary at its 64th day sitting on Monday, September 16, the President informed his former colleagues (senators) that he was in receipt of a communication from the CBL, advising that the Liberian economy may be seriously affected, due to the unaccounted-for local currency infused into the economy that is causing high inflation; and has recommended the printing of new local currency to replace the existing ones.
“While the decision needs to be made now to address this issue that impacts the economy, it is important to note that the printing of banknotes will require your approval, in accordance with Article 34(d) through the 1986 Constitution,” President Weah noted.
In view of Executive Governor Nathaniel Patray’s communication, President Weah said that he has advised the Governor to seek the opportunity “to discuss this matter with you and your appropriate committees as you will dictate. It is my fervent hope that you can agree on the way forward to enable the CBL to move forward in a timely manner to conclude arrangements for printing of the currency…”
By a motion from Senator Alphonso Gray, the communication was sent to the Senate committee on Banking and Currency, chaired by Grand Gedeh Senator H. Marshall Dennis, to advise plenary appropriately.
The Government’s request to replace the controversial legacy of the currency comes as some CBL executives face trial for illegally printing over L$16 billion during regime of former President Ellen Johnson-Sirleaf.