Tough Choices Await Incoming Government

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Mr. John B.S. Davies, president of-web.jpg
LBDI President John Davies

-LBDI President John Davies

The growing liquidity crisis currently faced by the Government of Liberia(GOL) is being most acutely felt by ordinary Liberians as they struggle daily to cope with rising costs of goods and services.

It is abundantly clear that with such a limited time left to the end of tenure of this government, it appears most improbable that the current liquidity crisis will be resolved soon, at least not before the end of President Sirleaf’s tenure.

The new incoming government will therefore face tough and trying economic conditions, the solution to which will require the making of tough choices and decisions in order to bring the situation under control.

According to the President of the Liberia Bank for Development and Investment (LBDI), John B. S. Davies, who spoke recently at a one-day economic forum hosted by the Governance Commission, Liberia is facing a serious problem of negative balance of payment, and the GOL is experiencing considerable difficulty generating foreign exchange.

This is because the country is importing more than it exports.

He attributes the current fiscal deficit to what he calls, “The lack of proper management of our expectations.”

He said growth in the Liberian economy relies heavily on the extractive sector and remittances from the Diaspora.

Against the backdrop of falling commodity prices, coupled with the fact there is little or no value added to major exports such as rubber, iron ore, gold, diamonds, timber, etc., there is a need to pay closer attention to remittances from the Diaspora.

The LBDI President stressed that the incoming government will have to look at what has worked and has not worked, with a keen focus on what has not worked, in order to derive a workable solution to Liberia’s current economic woes.

He said it is possible to raise the country’s Gross Domestic Product from its current level of US$2.101 billion to US$4 billion, citing real estate as one area of focus whose full potential to generate revenue remains relatively untapped.

Additionally, he said, there is a need to restore trust to the banking sector wherein individuals can take a GOL contract to the bank for financing and expect fruitful results rather than the en vogue knee-jerk “NEXT”reaction to prospective clients seeking bank financing for projects, business ventures, etc.

Although not explicitly stated, his comments implied the imperative for a new look at Liberia’s development model, a view echoed by Deputy Finance Minister Alvin Attah, who also presented at the forum.

Currently, Liberia is one of the poorest countries in Africa, with a population of 4 million, per-capita income of US$410, and about 60 percent of the population living below the poverty line.

According to official statistics, about 28 percent of the country’s population lives in the capital city of Monrovia.

10 COMMENTS

  1. It is quite remarkable that things are falling apart just as the tenure of this notorious kleptocracy comes to an end. A mere coincidence? Not hardly. The bankruptcy now showing up may be at least partly the result of twelve years of aggressive stealing of public resources by key members of the administration (from top to bottom) who have been transferring the stolen loot to banks abroad for safekeeping.

  2. “The lack of proper management of our expectations”.

    With sarcasm, a friend said the above statement is euphemism for “The ruling party mismanaged the nation’s economy, among other things, by gifting extravagant compensation packages – about a third of annual budget – to the higher echelons of the three branches of government and state corporations”.

    For instance, notwithstanding that then Justice Minister Hon. Sarnoh and others would reiterate that poverty was a threat to national security, the original hikes in wages and perks were actually proposed by the people’s own elected legislators, major beneficiaries of that unbelievable policy decision. Not surprising therefore that the suffering Country – Congua masses see support for the status quo by the late 1970’s advocates for equality of opportunities and human rights as hypocritical and a betrayal.

    Perhaps, the masses don’t get it.

    They don’t know that their former leaders are so educated that it is beneath them to rally behind anyone who can’t speak Oxbridge English, or quote Socrates, Plato, Aristotle, Homer, Sophocles, Juvenal, Shakespeare, Edmund Burke, Voltaire, Goethe, Kafka etc.

    Oh yes, their former leaders wouldn’t have supported a 16 years old high school dropout like Lech Walesa, whose next educational pursuit was a year spent in a vocational school to train as an auto electrician. Well, Polish intellectuals and the Bishop of Cracow, who would later become Pope Paul, rallied behind this dirt poor ruffian. And with the Solidarity Movement, which he co-founded in July 1980, Walesa became the first elected president of Poland and later winner of the Nobel Peace Prize.

    Of course, many Liberian intellectuals knew that by 1980 when these events were unfolding in Poland, Polish intellectuals in the larger Diaspora were at the forefront in every specialized field of human endeavor. But those brainy big book sons and daughters of Poland didn’t demonize Walesa; none called him a dullard; none joked about his miscues: All knew that the cause – change – was greater than its catalyst.

    Folks, some say the twin temptations of selfishness and greed stuck our country in backwardness; they should add ‘snobbery’ and ‘foolish pride’.

  3. We have been stating and knowing the obvious from the time of Tubman until today.
    We import more than we export. We are not adding value to our exports to increase their value.
    We wait until things look bleak economically, then we state the obvious.
    When are we going to get a leadership that will address these age old solvable problems?

  4. Thank you Sylvester for being poignant about the educated class bashing Oppong. This is our true problem regarding those of us who were fortunate to have attended higher institutions both at home and abroad.

    Bowever, regarding the above article, I do agree with most of what the Prezo of LBDI said but respectfully disagree with the point where government should now focus more on the diaspora remittances due to the backdrop of falling commodities prices. I think the FOCUS should be placed on adding value to our export commodities and providing more incentives to small and medium size business that have been spurring economic life into the economy.

    Adding value to our expo commodities will provide sufficient growth and create the necessary climate for liberians to be employed.

    I would also like to stress that focus on vocational technical education is key to employing most youths when the right incentives are put in place. Foe example graduates from vocational technical training schools have the potential to start their own businesses without looking for employment. For example, the middle class, based on income, constitutes most small and medium size business entrepreneurs.

    We have to empower our vocational and technical schools by introducing licenses to graduates to have the right to run certain small and medium size businesses only for liberians – eg. tire shops, mechanics shops, barber shops, maintenance businesses, etc..

    The idea of creating counting colleges is good but at the wrong time. We need regional colleges under the banner of the UL and focus more on vocational/technical high schools in every/most counties.

    We know our problems, we just need a committed leader, stop the too much talking, stop any further policy creation, and then implement what is currently on our books.

    Let’s hope for a more honest and committed leader than a bookish leader. I know it is painful to say this, but it is just the fact. However, if we can get an honest and committed leader who happens to be bookish is a plus.

    • JMG; Thanks! I believe, once upon a time, Liberia was headed in the directions you’ve pointed out. The biggest mistake then, was when the Liberian Leadership decided to change course. They opened a flood-gate to the COMMUNIST BLOCK NATIONS at the peak of the “Cold War”. That created a friction that led to the fire that burned Liberia to ashes. Your proposals cost money. Liberia is broke. In any case, it will require learned minds, ie bookish people to implement those proposals. That’s the foundation. It must first be built.

  5. Kortuwah,
    You’re 100% correct. Corruption is indisputably a fact of life in Liberia.The USAID made a scathing report recently about corruption being rampant in all three branches of Liberia’s government during the past 12 years. By mentioning the three branches of government, the USAID report was specifically aimed at Johnson-Sirleaf and her cronies who have egregiously taken the Liberian people on a 12-year heist.

    There is chronic unemployment in Liberia. The city of Monrovia is not clean. Nothing’s being done to fix it! Students who go to school in Monrovia do not have enough textbooks. The teachers themselves do not have teacher edition textbooks, neither do they have lesson plan books. Let’s not even mention the schools that exist in the counties.The whole thing this is a travesty! An old city as it is, the city does not exist as it should. In 1847 when the country declared itself an independent nation, Monrovia was designated as its capitol. But younger cities such as Abidjan and Accra in the Ivory Coast and Ghana respectively, both of whom are younger in terms of political independence, have shown a greater promise than Monrovia. That doesn’t mean that the above countries are free of transgressions or corruption, if you will. Frankly, we’re not developing, rather, we are stagnated?

    There aren’t good roads in Liberia. None whatsoever! Comparatively, the Ivory Coast and Ghana have better roads than us. So why are Liberian leaders so corrupt?

    As the new government prepares to come into existence, (no one knows who the president will be), automobiles for ministers and others will be bought. Millions of US dollars will be spent to purchase brand new automobiles. Guess what? The new government will consider the purchase of automobiles as a top priority. But, at the same time, Liberia does not have a lot of foreign trained doctors, chemists, physicists, mathematicians, etc. If it is a priority to buy cars for government officials, is it not a priority to educate the future youth of our country? My estimate is that the government will spend approximately 6 million bucks for cars. But will the government appropriate 1 million US bucks in order that the best of the best could be sent abroad to study medicine, math, physics, chemistry, economics, etc? If it’s good to buy cars for a do-nothing government officials, isn’t it sensible to educate our youth by awarding scholarships for them to study abroad? Where do government officials and members of the Upper and Lower House go for teeth removal? GHANA RIGHT? Isn’t that a disgrace? Just consider the unthinkable:
    Liberia….1847 and Ghana….1957. Do the math and turn in the result tomorrow!

    In my search for answers as to why Liberian leaders are often accused of corruption, I ask the following questions:

    1. Have our leaders been sworn by the demons?

    2. Do Liberian leaders eat plenty of Palm butter or collard greens that are cooked with dried monkey meat? That monkey meat must be purged from everyone’s diet who eats it.

    3. Have our drinking wells been laced with venomous poison and

    4. Do our leaders really, really, really have the interest of Liberia at heart?

    What’s really wrong with Liberia?
    Anyone has an answer, please?

  6. F. Hney; thanks! Corruption is an overall Liberian problem. Ours, is a government of the people, for the people by the people. If the Government is corrupt, the people must be corrupt. They join the Government already corrupt. In Liberia, bribery is the order of the day. If you don’t give the chief her/his Cold Water; what ever that may be, you don’t get anywhere. Don’t forget that accountant who cooks the book and the Diamond and Gold prospectors; who do not pay royalties on their finds.

  7. Shouldn’t a bidding company for Government contracts already be able to finance that contract internally before they are awarded the same contract. Too many unqualified business or persons acting as a middleman are getting contracts which doesn’t serve the best interest of the country and is a form of corruption. Additionally if there are any kick-backs or over charging; these allegations should be investigated and punished to full extent of the law.

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