The Speaker of the House of Representatives of the 54th Legislature Bhofal Chambers has suggested that the country should move towards a single currency regime, blaming the two currencies for “disastrous growth levels and stubbornly high and bad economy.”
Dr. Chambers is recommending the removal of the Liberian dollar and the adaptation of the United States dollar as Liberia’s “single currency.”
He informed journalists on Friday in his Capitol Building office on Capitol Hill, in Monrovia, of why he prefers the “permissibility of the US dollar to be the single currency regime for the Liberian commerce and trade amid the excruciating challenges the economy is faced with.”
Chambers said monetary control in the Liberian economy is seriously challenged by the lose availability of the two Liberian currencies in multiple styles and values of denominations.
He bitterly accused former President Ellen Johnson-Sirleaf during the end of her tenure of creating “an economic gulag,” which is related to a soviet style economic and militarily fashioned scenario that compel compliance on economic activities.
According to research, the word “Gulag” is an acronym for the Main Administration of Corrective Labor Camps and Colonies that the Soviet prison system started as a means of isolating “counter-revolutionary elements.” But with the beginning of the Five Year Plan it became a form of economic colonization…
But Chambers said President Sirleaf Administration printed the Liberian dollar in huge quantities, which have now flooded the economy and are chasing the few United States dollars coming into the country’s commerce and trade corridors.
He said members of the 53rd Legislature and other economic partners warned the President at the time not to print new bank notes, “but she did not listen, thus contributing seriously to the present condition of the Liberia’s economic woes.”
Another indicator the Speaker proffered is the low security features on the new banknotes printed by Ellen’s regime, which have given rise to the “wanton counterfeiting of the Liberian dollar by unscrupulous individuals.”
Dr. Chambers, however, said he is cognizant of Liberia’s balance of trade deficit, but said the country’s exports and imports imbalances cannot be singularly responsible for the current economic debacle.
“It would be expedient if this government withdraw the multiple local currencies from circulation, adapts the United States dollars and subsequently introduce a highly sophisticated and secured feature prone currency,” Speaker Chambers said.
“Until some radical decisions are made to curb the economic situation in the country, like adapting a single currency, the woes may deepen,” he added.
He however assured Liberians that the economic issues the country is faced with will be overcome by the Weah Administration as government is now finding a lasting solution to the situation.
“The state of the country is strong and secured, and I wish the Liberian people a happy and memorable observance of the 171st Independence Day come July 26,” he said.
It can be recalled that as part of propositions to amend the Constitution with the adaptation of US dollar as a single currency, the Liberia Business Association (LIBA) rejected the proposition for the eradication of dual currency in Liberia, arguing that the country does not have the productive capacity to institute a single currency regime.
LIBA said the international financial system would not have confidence in the country’s single currency, owing to the country’s low economic output, coming from conflict and being characterized by mismanagement of its economy over the decades.
The then secretary general of LIBA, Ms. Leelai M. Kpukuyou, recently gave her expert opinion to lawmakers in Ganta, Nimba County, during a five-day retreat on the Proposed Amendments to the 1986 Constitution of Liberia.
Ms. Kpukuyou said though timing is important, LIBA believes that the House of Representatives should delay moving toward a single currency in the immediate future until productive capacities are greatly improved.
“Until we add value to our own currency through Liberian businesses, we cannot have a single currency,” Ms. Kpukuyou said. “We need to take our economy from the hands of foreigners, formalize the informal business sector, then we are ready for a single currency,” she noted.
She pointed out that recent statistics from the Central Bank of Liberia (CBL) indicate that more than 70 percent of broad money (M1 and M2) is denominated in US dollars.
“Accordingly, the use of the dual currency regime has been a blessing for Liberia’s economic recovery,” Ms. Kpukuyou said.
“While Liberia has officially sanctioned the use of the United States dollar as legal tender, it is not the only country in the world with high dollarization. Other countries, such as Ecuador, El Salvador, Panama and Eastern Timor have higher proportions of foreign currency deposits to broad money,” she recalled.
The strength of any country’s currency depends on productivity for local consumption and for export, which will allow the country to maintain a considerable balance, according to Kpukuyou.
In August 2017, the House of Representatives passed a law ensuring that all monetary transactions in the country are done in Liberian dollar. This means all transactions, including purchases, sales and related business deals in the country will be done by use of the country’s local currency.
Liberia is currently a dual currency country, with the US dollar being secondary. But the US dollar has dominated the market, being the most demanded currency for purchases and payments, even at government entities.