–Until Completion of CBL Reconstruction
Senate Protempore, Albert T. Chie, has announced the Senate’s declination of the the request tendered by the Executive Branch of government for the printing of new banknotes to replace the current ones in circulation.
Protemp Chie, who addressed plenary on Friday, October 4,2019, before that body’s annual break, said the real need and necessity to print new banknotes to replace all of the existing ones; “most especially that about 86 percent of the notes in circulation is out of the banking system; that there are reports of counterfeit Liberian banknotes on the market, and that significant amount are mutilated.”
Nevertheless, the Pro Tempore recalled that the Senate has raised issue of the proper functioning of the internal controls at the Central Bank of Liberia (CBL), as indicated in the Kroll Report; “there were issue also about confidence factor at the Bank, and issue of funds to print the banknotes.”
“After extensive debates, the Senate has declined to give the requested authorization until the restructuring of the CBL is complete,” the Grand Kru County Senator announced, receiving few gestures of appreciation from his colleagues.
Based on what he said was an advice from the CBL, President George Weah in September wrote the Senate, to authorize the printing of new local currency, to replace the current one.
In his communication, read before Senate plenary at its 64th day sitting, President Weah informed the august body 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 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 said.
After a couple of reported hearings, Senate Committee on Banking and Currency, in a report, recommended that Senate plenary authorizes the printing of Liberian dollars 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 proposed by the CBL.
But during a very heated debate, several Senators took serious exceptions to recommendations contained in the seven-point proposals.
The report of the Committee, chaired by Grand Gedeh County Senator Marshall Dennis, noted that: “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) drawdown and the Ebola crisis are having serious impact on the drawdown 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 notes on the market; that the banknotes should be printed in a high grade and carry more 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 stringent policies and control measures be put in place by the CBL to prevent hoarding and other forms of economic sabotage; that the Liberian Senate deals with the CBL proposal to print the total amount of L$35 billion in various denominations as proposed; 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 proposed by the CBL 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-thirds majority members of the Senate, and done in the Committee room this 13th day of September, 2019.”
Immediately reacting to the Committee’s report, Margibi County Senator Oscar Cooper, wondered 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 Governor?”
After the L$16 billion saga with the Liberian people, Senator Cooper continued, “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 H. Varney Sherman, recalled suggesting to President 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.”
He accused the Committee of what he called some fundamental issues it did not consider, such as the suggestion to production coins, which he asserted that the cost for producing coin is more than the value of the coin.
“I will vote against L$1,000 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.