Déjà Vu

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The announcement by the Central Bank of Liberia (CBL) proudly declaring that L$4 billion newly printed banknotes had arrived in country was perhaps meant to restore and shore up public confidence in this government’s handling of the economy. This may have been so in view of the very difficult economic hardships amid rising public discontent about the shortage of Liberian dollars on the market and the recirculation of mutilated LD banknotes.

However, unsettled questions about the whereabouts of the L$16 billion banknotes that reportedly went missing remain, although former members of the Board of Directors of the CBL have been criminally indicted and are currently facing trial. Others previously charged, including the son of former President Sirleaf who was serving as Deputy Governor of the CBL, have all been let off the hook for reasons the public attributes to “connections”.

Some key questions of the many are, how much money is currently being held in the CBL vaults, how much money (LD banknotes) are in circulation currently, and in which denominations is the money printed? Interestingly, Kroll was hired to probe into the missing L$16 billion but fell short of telling the Liberian people how much money was held in the CBL’s vaults because it was denied access to do a physical count.

Probably this new role Kroll has landed may provide them access to the vaults in due course and the true picture of what had obtained then. In the absence of accurate information on actual money supply and now the introduction of L$4 billion, analysts predict this will occasion a further depreciation of the Liberian currency against the US dollar. In short, more and very difficult times lie ahead for Liberians.

At this point, it remains unclear whether the CBL Governor is going to inform the nation about total money supply, neither is it clear at this point whether he has any inclinations to do so at all, especially if he does not get the nod from the President or his assigns to make such disclosures. For now, Liberians will have to stomach the unpalatable fact that they will ultimately have to pay for all this.

In the face of this non-disclosure, former CBL Board members are under criminal indictments and are currently facing trial for their alleged role in the printing of excess Liberian dollar banknotes that subsequently went missing. But principal characters involved in the imbroglio have been absolved by the state with prejudice to itself, meaning those individuals can never again be held to account for their role in the affair.

Former President Sirleaf, under whose watch the scheme was concocted and enacted, remain beyond reproach while underlings are being made to face the music. Whatever, way one looks at it, the nation is being shortchanged. And not even a sham trial of scapegoats will prove sufficient to allay public unease about the lack of accountability for the missing L$16 billion.

And now the public finds itself reckoning with the consequences of flawed economic decision making whose effect is likely to send prices of local commodities soaring through the roof, accompanied by depreciation of the Liberian dollar against the US dollar. It can be recalled that the Auditor-General warned against the printing of additional Liberian dollar banknotes when monies already printed could not be accounted for.

In a letter from the General Auditing Commission (GAC) to the Legislature dated October 8, 2019, Auditor-General Yusador Gaye called on both Houses to reject the request by the Executive to print new LD banknotes because, according to her, “it will accordingly have an adverse consequence on the economy and the people.”

The AG further noted, “I am strongly of the opinion that giving your approval to print more currency is unfathomable, but will be very misplaced, granted we are yet to understand all what happened at the last currency printing, as evidently, the US$25 million mop-up exercise does not engender much confidence in the Central Bank of Liberia (CBL).”

“In fulfillment of part of my constitutional mandate aimed at providing support to your oversight of financial management role, I firmly suggest that you do not waver on your resolve not to print additional Liberian currency/money at this time.”

The AG’s letter came in the wake of communications President Weah sent to the Legislature in September, 2019 requesting the printing of new LD banknotes. The Senate Committee on Banking and Currency gave its approval but it drew fierce opposition from several Senators including Oscar Cooper of Margibi.

Her letter continued, “A review of the daily exchange rate on the CBL website shows that the exchange rate has steadily risen on a daily basis during the period August 16, [to] October 2, 2019. Generally, a major problem of the fiat currency is inflation, and as government prints new money, the currency already in circulation devalues.”

“It has not been verified whether the CBL has implemented measures to address the lapses noted by the Kroll’s Scoping Report (3.2.8 non reconciliation of vault balances and 6.4.2.3 in constancy in finance department); b) the Presidential Investigative Team (PIT) report 2.2.25 –raises alarms of no security in place for the protection of reserves; and c) the GAC’s Agreed-Upon Procedure on the US$25 million mop-up exercise highlighted (1.1.3 unsigned, and not dated minutes, 2.4.2 lack of procedure for posting, and 2.4.3 disbursement not processed through the bank).”

Further, she questioned: “What policies has the CBL put in place to curb possible counterfeit monies on the market; and what measure will be put into place to prevent the hoarding of cash?

“Additionally, from the printing and handling of the L$15 or L$16 billion, it is quite apparent for all to see that CBL does not have adequate internal controls, and is thus ill-equipped to function at its best, which the Kroll and GAC reports attest to”.

In the final analysis, the AG’s cautionary advice has seemingly been ignored and her concerns remain unaddressed. But the consequences she warned of cannot be ignored nor dismissed. It is déjà vu!

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