Hardly have the ghosts of the missing L$16 billion and the US$25 million mop-up exercise been laid to rest when news have surfaced in the media of a request from President Weah to the Legislature seeking to print L$35 billion to replace the current banknotes as well as those printed by the former regime and brought into the country. Further, disclosures by some senators that the Senate committee on Banking and Currency, having approved the request, is now seeking to have the Senate plenary approve it, is raising eyebrows and rightly so.
The Senate Committee on Banking and Currency, is recommending that Senate plenary authorizes the printing of Liberian dollars banknotes in the denominations of L$20, L$50, L$100, L$500, L$1000, and coins be minted in the denominations of L$1, L$5, and L$10 as proposed by the Central Bank of Liberia (CBL).
In the first place there are unanswered questions on how the L$35 billion figure was derived, since there is no clear picture on how much money is actually in circulation. Moreover, public trust and confidence, badly shaken or demoralized by the failure of authorities to provide proper accounting of the total amount of Liberian dollar banknotes printed and the US dollars said to have been infused into the economy.
Owing to the gravity of the situation and given heightened public concerns at the time, the GoL commissioned two independent probes into the affair, the Kroll Associates (Kroll) and the Presidential Investigation Team (PIT), both of which submitted reports incriminating authorities of the Ministry of Finance and the Central Bank of Liberia (CBL). Special mention was made of the blatant refusal of the CBL to allow physical inspection of its vaults to ascertain the actual amount of currencies, local and foreign, held there.
Since the announcement of the missing billions last year, the value of the Liberian dollar has plummeted against the US dollar with the rate now hovering at 210 LRD to 1 USD. A year ago, the exchange rate stood at 153 LRD to 1 USD and there is no telling how fast or high it is going to rise. All things considered, it can be reasonably expected that the Liberian dollar is going to depreciate against the US dollar.
In view of this, rising public concern about the continued depreciation of the Liberian dollar appears to be heightening since the announcement was made public of GoL’s intention to print new dollar bills. Several senators have expressed strong reservations about the recommendation of the Senate Banking and Currency Committee, noting that the matter was not given sufficient due diligence.
For his part, Margibi County Senator Oscar Cooper, in sharp reaction to the Committee’s report, questioned why the CBL should request the printing of L$35 billion, when the money reported to be in circulation which needs to be replaced or withdrawn from circulation is L$21 billion. But the CBL Governor, presenting the case for the Bank, appeared evasive.
But Senator Cooper, apparently peeved by the CBL Governor’s evasive response, fired back observing that: “We as committee members did not have due diligence to debate this within committee. If this Senate votes to approve this L$35 billion, we will put the Liberian people in serious, serious financial jeopardy, because many financial and economic questions have gone unanswered.”
And newly elected Montserrado County Senator Abraham Darius Dillon, apparently taking the cue from his Margibi colleague, declared: “Whatever we are doing now must be done with due diligence so that posterity can be kind to us; so colleagues, please let the Committee take this report back, and bring it to us after our return in January”.
Amongst those senators speaking to the issue was Grand Cape Mount County Senator Varney Sherman who intimated that months ago, in the wake of the missing billions controversy, he had at the time advised President Weah to replace all the notes with newly printed notes but apparently has advice went unheeded. This is an interesting revelation which leaves the question why the Senator kept his views to himself rather than bringing same to the public discourse.
Nevertheless, the Daily Observer does share his view that as long as Liberians hold the belief that “some of our money are in places that they don’t know, especially outside of the banking system, they will not have confidence in our money, and that lack of confidence alone impacts the value of the Liberian dollar”.
Moreover, this newspaper finds laughable communications from the CBL purportedly sent to President Weah advising that the Liberian economy could be seriously affected due to unaccounted for local currency infused into the economy which is causing high inflation.
While the Daily Observer agrees that excess liquidity is causing high inflation, the problem is it is the very CBL that participated in the infusion exercise, stoutly resisted attempts by investigators to inspect the CBL’s vault to ascertain the actual amount and kind of currencies held in its vaults.
So, what do we have here? If the CBL maintains that unaccounted for local currency infused into the system under their watch is causing high inflation, how then can CBL authorities explain their blatant refusal to yield to requests by the Kroll and PIT investigators to inspect its vaults to ascertain the amount of currency banknotes, both foreign and local? To put it plain and simple, unanswered questions of integrity hovering over the handling of the US$25 million infusion as well as the LD$16 billion printed banknotes beclouds this latest request to print additional currency.
This is due much in part to the lack of public trust and confidence in almost the same cast of individuals who associated with the criminal handling of missing billions and the infusion exercise but who now appear poised to handle the printing of new banknotes. President Weah has to be careful, lest he could possibly find himself entrapped by circumstances not of his own making, but by those with selfish motives and intent.
But in the final analysis it is the leader that takes the fall.