Reforms in Public Bureaucratic Structures in Liberia since 2005: Case Studies of LRA and PPCC

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The Liberian Governance system has experienced significant reforms over the years from 2005 to 2015. This is evidenced by the establishment of the General Auditing Commission (GAC), Liberia Anti-Corruption Commission (LACC), as well as the formation of the Executive Protective Service (EPS), including administrative restructuring of the Liberia National Police, (LNP), among others by legislative enactments.
Whether as an offspring of the Comprehensive Peace Agreement (CPA) recommendation in 2003, aid conditionality or demands for national policy outlook, this paper is purposed to explore how two major entities under the continuum of reform; the Liberia Revenue Authority (LRA) and the Public Procurement and Concession Commission (PPCC) have sure cased significance. It explains how these entities when further calibrated can resuscitate income and boost cost effectiveness on public goods and services.

The LRA was established by an Act of Legislature in 2013 and began operations on July 1, 2014 (LRA Corporate Strategic Plan Fiscal Years 2016/17-2020/21). It replaces the department of Revenue of the then Ministry of Finance (Including the Bureau of Internal Revenue and the Bureau of Customs and Excise) as defined in chapter 21 of the Executive Law of 1972 for the purpose of assessing and collecting national revenue as specified in the Revenue Code of Liberia or related law: administering accounting, auditing and enforcing revenue collection laws and regulations, and educating taxpayers to facilitate tax and customs compliance (LRA Act available at www.lra.gov.lr).
On the other hand, The PPCC Act of 2005 amended in 2010 establishes the PPCC to regulate all forms of public procurement and concessions, provides for institutional structures for public procurement and concessions, and stipulates methods and procedures for public procurement and concessions and for purposes related thereto (PPCC Act available at www.ppcc.gov.lr).

Analysis

With an estimated population of 4.2 million, Liberia in August of 2014 experienced nominal growth rate averaged at 5.5 percent for four years running. It also averaged 74.6 percent vulnerable employment and registered limitations in options for more meaningful employment and financing of investment opportunities. Publicly supplied electricity then reached less than 5 percent of the population, at a cost of around US$54 cents per kWh, something which renders manufacturing absurdly expensive as compared to neighbors (Guinea: 16.4 US$ cents/KWh, Ivory Coast : 13.9US$, Sierra Leone : 25 cents per kWh; available at world Bank- Doing Business). Privately supplied power often more costly estimated at US$0.70 per KWh according to word Bank Report 2014.
Only 6 percent of the total road network then paved, and much of the country’s interior is cut off from the capital during the rainy season. However, Plans are underway to construct new roads including Gbarnga- Mendikorma, Ganta –Tappita, Zwedru-Fish Town and others.

For the most part, these data show not a favorable economy neither a society on the wheels of industrialization which are inevitably the citizens’ quest. So imagining how significant the projects are, combined with funds and services needed to ensure full delivering, adequate income generation and smart spending appear inevitable. Thus, the LRA and the PPCC epitomizes positive trends.
Like somebody in the US would proudly express tax payment as a way of life and essence, all normal humans must eat to live making some phenomena just sure in this life. Beyond the individual, public sector imperatives do exist. Government must generate and spend money for the public, therefore getting the money and spending it lie core in effecting public sector functioning.

The LRA contributes 70 percent to the revenue pot and functions to assessing and collecting national revenue. In justification of its establishment, the LRA raised a landmark income of about 19.9 million 4.6 percent above its target for domestic tax collection initially passed at 417.2 by raising 437.2 million in its first year of operation.

Although comparing public and private sectors somewhat appears redundant to some scholars but the parallels usually scout the notch of comparison. In private sector procurement is viewed as strategic function to improve the organization’s profitability and seen as helping to stream line processes, reduce raw materials prices, and cost and identifying better sources of supply in essence of helping to reduce the bottom line. But in Public sector bottom line is less well defined where as there are no shareholders’ dividend to be paid out or publicly declared profit or loss. (Available at crescentlearning.ac.uk) But teaching and research have been recommended to maximize output with in available funds. In this manner relation can be established by making tax payers like shareholders (ibid).This demands the accountability as well as value for money.

At the higher level, key elements needed are for expenditure: need for openness, transparency and non- discrimination backed by required legislation (ibid). This has been discussed By Christopher H. Bovis in his book “The EU and Public Procurement Law” similarly prescribed in the PPCC Act part V Under Method of Procurement: stating that Public procurement shall be undertaking by means of advertised open bid proceedings, to which equal access shall be provided to all eligible qualified without discrimination, subject only to the exceptions.

Major Assumptions

Ensuring the prowess of procurement officers are well to date with methods, ICT applications will accelerate efficiency at the PPCC.

Employing high tax when new policies like the Small Business Administration Act (available at www.moci.gov.lr) are established to encourage domestic entrepreneurs may look good for fast recovery in a period of financial constraints but also largely undermines growth for new businesses. For example the spirit of the Small Business Administration Act to promote Micro Small and Medium enterprises(MSMEs) to reduce poverty by increasing economic growth with a rational to strengthen small businesses in Liberia, create more private sector employment opportunities, address poverty challenges and develop a robust middle class is undermined by levying high taxes. It further encourages smuggling in a country like Liberia which to larger extent faces pourer’s borders problems.

It becomes more problematic by adding that the average 32 percent of GDP comes from domestic tax and grants leaving 19.4 percent tax ratio when grants and borrowing are excluded, thereby making a tight fiscal space. Therefore, high tax is at an odd with attraction for increasing the fiscal space which is necessary for revenue generation.

Conclusion and Recommendation

The paper identified reform measures which have been taken to boost effective governance from the period of 2005 to 2015. Considering the tight economic variables, generating mass income and spending public funds to acquire the value for money are key; thereby showing up for the strengthening of LRA and PPCC which have showed cased significance.

Among many measures, to sophisticate ICT systems can be recommended at both entities. Regular up date of the vendor registry on the PPCC website as well as advertisement of contracts and awards and routine stages and accompanying steps (Identification of goods required, preparation of plans for acquisition of goods, invitation of bids, receiving of bids, evaluation of bids). Seeking of approval for contract awards up to performance monitoring must be considered appropriately.

About the Author: John S.M. Yormie Jr. is Principal Research Analyst (FSI) at Liberia’s Ministry of Foreign Affairs.

Authors

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