The Weah led government, from all indications, appear to be in “panic mode”, judging from the contradictory statements coming from government officials regarding the introduction of crisp new Liberian dollar banknotes into circulation. For the last few months there has been an acute shortage of Liberian dollar banknotes on the market without any explanation whatsoever.
Commercial banks have been paying out to their customers mutilated banknotes, which should have long since been withdrawn from circulation. Local savings and loan associations (Susu) have been complaining about their lack of access to their accounts at the various commercial banks. This acute but artificial shortage of Liberian dollar banknotes has led to an artificial appreciation of the Liberian dollar against the US dollar with the exchange rate currently hovering at 186 Liberian dollars to one US dollar.
This appreciation, however, has not affected prices, which remain high and quoted in US dollars for the most part. Finance Ministry officials and other policy makers have insisted that the way out of the quagmire was to print new banknotes. To be sure, the Legislature was recalled from recess to discuss a singular item-the printing of new banknotes.
Reports received by this newspaper suggested that legislators who penned their signatures of approval to a resolution to print the banknotes were handsomely rewarded while others refused to comply. At any rate, the matter, to the best of public knowledge, remained unresolved up to legislative break, although there were hints from top circles that legislative approval had been obtained.
But with civil servants salaries having been delayed for months and threats of strikes and or go-slows mounting and a planned December 30 mass protest hovering in the wings, something clearly had to be done. Diplomatic sources had informed this newspaper that the Crane Currency had rejected proposals from the GoL to print new Liberian dollar banknotes owing to GoL’s indictment against Crane for allegedly conspiring with former CBL officials to print excess banknotes.
As it turned out, new Liberian dollar banknotes are in circulation and sources suggest they are part of the L$16 billlion which allegedly went missing but which the GoL through the CBL denied. However, the CBL, when requested to open its vaults to the PIT and KROLL fraud investigators to conduct a physical count of the money, flatly refused and President Weah did nothing to ensure CBL’s compliance.
Now the matter has come to head and once again, contradictory accounts by the GoL are free flowing. The Presidential Press Secretary Solo Kelgbeh had publicly announced that legislative approval had been obtained to print new banknotes, but some legislators have angrily rejected any such claims. Speculations were even rife in the public about money already printed and brought into the country.
But in a press statement issued by the Ministry of Information, the Ministry, amongst other things, noted the following:
“The Central Bank of Liberia has issued out to commercial banks, unused Liberian Dollar Banknotes that have been in its custody, in the vaults. The bank puts out banknotes, used and unused, from time to time as a routine exercise to meet the liquidity needs of commercial banks. For the record, this administration has not printed any new banknotes.”
But if this Administration has not printed any new banknotes, then where have the new notes come from? The Ministry of Information’s statement that the money released into circulation came from the CBL’s vaults raises a key question, which is, just how much money is in circulation and how much is stored in the CBL’s vaults?
This is important because some government officials are suspected to be in possession of large amounts of Liberian dollar banknotes in their respective homes, recalling statements by CDC chairman Mulbah Morlu when the scandal first broke of the missing L$16 billion Liberian dollar banknotes that he claimed he personally saw pick-up truck loads of banknotes being driven from the Waterside Housing Bank vault to unknown destinations. These contradictory accounts have not only left the public confused but incensed as well.
As suggested by financial analyst Yanqui Zaza, there could be a way out to address the problem. According to him, the Weah led government should “not only count Liberian currency but should also investigate large withdrawals of banknotes in 2018 and 2019.
Further, according to Zaza, the Weah Administration should “disclose cash balances of state-owned entities (LEC, NPA, LPRC, NASSCORP, Maritime, etc”. And he further argues that this administration should “verify why cash balances owned by state-owned entities at the Central Bank of Liberia (CBL) decreased to L$6.7 million in 2018 from L$1.5 billion in 2017 as per page #65 of the CBL 2018 Audited Financial statements”.
This government would do well to consider the suggestions proffered by Mr. Zaza if it is indeed serious about getting out of the quagmire, largely of its own making, in which it finds itself. All is not lost and, given the political will and requisite fiscal discipline, the situation could be salvaged. But are they reading and are they listening?