Who remembers our Editorial of April 19, 2016, when President Ellen Johnson Sirleaf appointed her two new most senior fiscal and monetary managers?
In that Editorial, we called on both Finance Minister Boima Kamara and Central Bank Governor Milton Weeks to hold regular consultations with each other to ensure the efficient implementation of the nation’s fiscal and monetary policies.
Such meetings, which we understand are held weekly, are especially critical at the momentous time of economic and financial crisis. This is why our situation is not worse. Yes, the Liberian dollar is 10 to one United States dollar. But it could have been worse. Think of the Nigerian naira, which yesterday was 314.75 to US$1, and the Zimbabwean dollar, 361.90 to US$1.
As for two other West African neighbors: the Gambian dalasi has sunk from 9 to US$1 in the 1990s to 44.074 today; while Sierra Leone’s leone yesterday registered at 7448.79 to US$1.
It must be pointed out that Finance Minister Kamara and CBL Governor Weeks are not to blame for Liberia’s foreign exchange crisis. As we said in our Editorial yesterday, there are three main reasons for our economic problems: first, GOL’s financial ineptitude and mismanagement; second, the steep fall in commodity prices, especially rubber and iron ore, Liberia’s two main foreign exchange earners; and third, corruption.
There is also a fourth, the failure of Ellen’s first two Agriculture Ministers, while the rubber price was very high, to encourage the planting of more cocoa, whose price is always very high.
Another problem has been the continuous outflow of our already scarce US dollars to import our staple food, rice. This is due primarily to GOL’s failure to empower our rice farmers; and to engage investors to develop rice production on a massive scale.
Finance Minister Kamara, addressing a two-day national development conference last Thursday, said the Liberian economy requires “deliberate policy actions to reverse the worsening balance of payments.”
A press statement from the Executive Mansion yesterday mentioned a number of measures aimed at addressing some of the issues which the Patriotic Entrepreneurs of Liberia (PATEL) has been highlighting in its three-day shutdown of businesses in Monrovia.
In an apparent reaction to some of PATEL’s grievances, the Executive Mansion statement announced a scheduled meeting between the President and members of the Liberia Chamber of Commerce and other local business entities.
This meeting follows separate meetings of the Economic Management Team (EMT) and the Cabinet, both under the leadership of the President, aimed at addressing the country’s current economic situation.
The EMT has commissioned an immediate review of the recent amendment to the Revenue Code “to correct provisions that are inconsistent with the ECOWAS Common External Tariff (CET) regime, which allows a three-year accession window to avert an unfair burden on the business community and the consuming public.”
The EMT and the Cabinet also noted the continuing efforts by the CBL and the MOF over the past few weeks to reduce and stabilize the foreign exchange rate. “These have led to the steady decline of the rate in favor of the Liberian dollar,” said the release.
Another important measure taken by the EMT and the Cabinet is a call for “a more robust enforcement by relevant Ministries and Agencies, with specific emphasis on dealing with the satiation wherein many citizens engaging in fronting for foreigners.”
The Cabinet and EMT have also mandated the Commerce and Industry Ministry to conclude arrangements leading to the elimination of the Import Permit Declaration (IPD).
These and other measures taken jointly by the Cabinet and EMT are very encouraging, and we believe will go a long way in redressing some of the grievances of PATEL and the Liberian business community as a whole.
We hope that this latest attempt by GOL to enforce the Liberianization Law, which reserves certain businesses to Liberians, will bear fruit. For it seems that the GOL has itself been unserious about enforcing this Law.
Look what is happening in the ice cream sector, where Lebanese businesspeople insist on challenging this law by being vigorously involved in that business, such as they are doing on 9th Street, Sinkor.
We wait to see what GOL will do to stop this open affront to government policy.