‘Wage Harmonization, Not Wage Cut’

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MFDP Senior Management Team and Delegations of IMF at the close of the Joint Press Conference in Monrovia.

Minister Tweah says, assures IMF of credible budget

At the end of discussions with the delegation from the International Monetary Fund (IMF) on possible financial support to Liberia under the Extended Credit Facility, Finance and Development Planning Minister Samuel D. Tweah, Jr. took the opportunity to respond to allegations of a pending “salary cut” among civil servants, as part of the Weah Administration’s efforts to manage the government’s wage bill.

“This is a revolutionary exercise. What we are doing is wage harmonization, not wage cut. This is about paying people across government with same position with the same salary,” Minister Tweah told the IMF delegation on Monday June 24, 2019.

It can be recalled that, during early months of the first administration of former President Ellen Johnson Sirleaf (2006), she encountered a government overburdened with civil servants. Amid heavy criticism over plans to reduce the headcount on government payroll, President Sirleaf said she was “not downsizing, but right-sizing the civil service”. Much of her strategy involved clearing away redundancies of personnel and functions at various institutions of government.

In the months following the seating of the administration of President George M. Weah in 2018, concerns were raised in the public about mass employments across government, at the behest of the ruling Coalition for Democratic Change (CDC), and the resultant impact on the national budget of a country that was declared “broke” by the new President, George M. Weah.

The government’s wage bill in the 2018-2019 fiscal year was US$330 million; but with the harmonization, the new wage-bill for 2019-2020 is expected to shrink to approximately US$297 million, saving the government about US$33 million.

However, Minister Tweah assured the IMF delegation, led by Mika Saito, that the Government of Liberia is committed to ‘credible budget’ execution during fiscal year 2019/2020.

The Liberian Finance Minister informed the IMF that the administration of President George Manneh Weah is committed to fighting fraud and abuse of resources, adding that the government has agreed to establish a ‘Corruption Court.’

He told the mission of government’s commitment in terms of meeting benchmarks that will ensure its readiness for business. One of these benchmarks, the Minister noted, is making significant efforts to pay domestic vendors in the amount of US$35 million.

Tweah added that government has put in place strong revenue measures, which will ensure US$22 million in new revenue, during the new budget year.

According to him, Liberia’s macroeconomic stability could only be achieved when the fiscal and monetary institutions of government work together.

The IMF mission, through Mika Saito, Deputy Division Chief, Western II Division African Department, said during the visit, they observed that series of external shocks including key commodity prices, the lingering effects of Ebola, and the rapid depreciation of the exchange rate that followed the economic situation facing Liberia has proved challenging.

The mission stated that Macroeconomic stabilization, particularly a lowering of inflation, should be an immediate priority; while public sector is essential to supporting the reform agenda.

The mission discussion also included a package of growth-enhancing structural reforms to strengthen public financial management and improve the business climate.

The mission noted the importance of rebuilding foreign exchange reserves to improve resilience to external shocks, which is one of the key objectives of fund supported programs, while also highlighting the importance of allowing the exchange rate to remain flexible and improving the transparency of CBL’s foreign exchange operations.

However, the mission pointed out that securing enough resources to fund efficient government expenditure will require both additional revenue measures and reforms to reallocate expenditure, while reduction in the size of the public sector wage bill is necessary.

Growth, the mission observed, has slowed, while inflation has accelerated and stands at 23 percent.

The mission also held discussions with President Dr. George Manneh Weah, Speaker of the House of Representatives Dr. Bhofal Chambers, and President Pro Tempore of the Senate Albert Chie, as well as Central Bank Governor Nathaniel R. Patray and Commerce Minister Wilson K. Tarpeh.

10 COMMENTS

  1. The question then becomes, what’s wrong with “wage cut” for those making unnecessary huge wages?

    After all, when Justice Minister Sarnoh alarmed that pervasive poverty was the greatest threat to stability, EJS was getting more pay than Obama and bonanza compensation packages of higher ups comprised a third of annual budget. So, she appointed a Wage Stabilization Committee to rectify the situation and invited them to a retreat at her Juwilijuah Farm in Bomi County.

    They went there and talked, but nothing came out of it. The upshot: she bequeathed a large wage bill, resulting budget shortfalls, and runaway inflation triggered by unlawfully printing and dumping of excess Liberian dollars on the market. Even the right-sizing of personnel in 2006 was allegedly a ruse for purging employees, including professionals, deemed not loyal.

    This isn’t to say government wasn’t negligent in over-employing junior level officials; that’s common post-election overzealousness in developing countries. IMF has been around longer than some think and very familiar with such a problem. Most importantly, in spite of EJS’s flirtations with the organization to impress us about her influence, IMF knows she left an economic mess behind this administration will carry for some time.

    • Okay, we know about all the pros and cons of EJS administration, but her challenges were 10x greater than President Weah’s. She inherited a wrecked country with a budget of $80 million, so I think she deserves a lot of credit for a lot of good deeds. Now, the big question is: Does George Weah administration have the leadership and discipline to execute on a plan to fix the economy? I think they can, but they will have to drastically reduce corruption and do well on execution. The jury is out but we will see what happens. Many investors are on the fence because there is too much volatility in the country right now – things need to calm down.

      • Phil George, your assertions are the kind of educating comments Liberia urgently needs now. Many thanks for for being broad minded on the economy issues.

      • Phil George, yes EJS inherited a wrecked country; and after she , her children, close relatives, and cronies LOOTED THE ECONOMY , she left a wrecked country with the worst deficit ever.

    • Even after 6 years of George Weah term, his cheerleaders will still be saying Ellen Sirleaf did this, Ellen Sirleaf did that…pathetic..

  2. Why should Senators, Rep, etc have such high salaries? What do they do; weekly, monthly work reports?
    I believe a Referendum for Salary Chats, etc should be held?
    Let all well educated, best of educated Liberian help determine which way our nation should go. People from other nations can only suggest but we have to get up and do the work.

    Where are the $25illions, $100millions, etc? They must be accounted for?

  3. Phil,
    Once again, I’d like to concur with you because some of your observations above are noteworthy. For instance, in your last sentence, you exclaim, “things need to calm down”. That’s right! Things must calm down. There’s too much riff-raff. Realistically, I think Weah’s critics and other political operatives are actively fanning the flame of instability. It seems that too many demands are being dumped on Weah. The funniest thing is this…..if Weah fulfills or complies with the opposition in terms of meeting the opposition’s demands, there’ll be nothing left for them to campaign on during the next presidential season.

    But, there’s a glitch my friend. In the same document, you write: “her [EJS] challenges were 10X greater than president Weah’s. She inherited a wrecked country with a budget of 80 million”. Well, that’s true to a certain extent. The truth of the matter is that during the early years of Johnson-Sirleaf’s presidency, millions of US dollars, or we could say billions of dollars were pumped in the country’s sagging economy. Because of her work experience, it was believed by many people worldwide that she would do a phenomenal job. Sadly, she didn’t.

    During EJS’s presidency, I went to Liberia in 2010 as well as in 2013. In the city of Monrovia, I noticed that some schools did not have dictionaries, periodicals or encyclopedia. I also noticed that students did not have their full set of textbooks. But at the same time, lawmakers had their government-supplied automobiles. My contention is if it’s okay for a lawmaker to be given a government-spplied autumobile, it’s okay for the youth of Liberia to have their full set of textbooks. Sadly, EJS squandered lots of opportunities.

    It hurts! But I am optimistic that the economic climate under Weah will be improved. It won’t be tomorrow. But the day is coming.

  4. Flomo Smith,
    You seem to be suggesting that George Weah is a 6-year termer. Don’t dwell on it.

    But on the other hand, I’d say why not talk about Johnson-Sirleaf’s excesses? Sure, even after 12 years, Weah’s supporters will blame EJS for her botched opportunities. She’s fair game. Those people that you’re referring to (possibly including me) have a right to free expression.

    Six to 12 years after his term of presidential service has ended, the failures of EJS will not erase. It’s like when one’s bad credit record has been sent to the credit bureau, after 6 years, the record is still there.

    • You seem to be suggesting that George Weah is a 6-year termer. Don’t dwell on it.

      Fool me ( the Liberian people) once, shame on you; fool me (the Liberian people) twice, shame on me (the Liberian people).

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