The Central Bank of Liberia (CBL) has embarked upon a number of highly commendable changes designed to ease the public’s handling of the Liberian currency.
The first announcement CBL made last week was that it was introducing a L$500 note. But the Central Bank is not simply throwing out this new and most welcome banknote to the public. Last Monday it commenced sending out teams of experts throughout the country, starting with Kakata, capital of Margibi County, an important commercial center. The aim is to introduce to the public the new L$500 and other banknotes; to explain other currency issues; and to listen to the public’s own concerns about money in the country.
CBL’s Deputy Director for Banking Services, Ms. Miatta Kurteh, told Margibians that the new L$500 and other new banknotes being issued are marked by special security features, in order to make counterfeits impossible.
Our Roving Reporter Edwin Fayia, who accompanied the CBL team to Kakata, said Ms. Kurteh delighted the crowded Kakata meeting with two other pieces of good news. First, CBL is about to replace the old, tattered banknotes with new ones. This, she said, is contrary to rumors that the Bank had handed over all the old bills to moneychangers on the streets. She explained that CBL was soon to bring in brand new banknotes.
The Bank, secondly, would also soon be introducing smaller currency denominations. This means that goods on the market would no longer cost a minimum of L$5.
This is good and bad news—good news for consumers and bad news for vendors. Take the women selling tiny bags of peanuts. These are now sold for two prices—L$5 and L$10. How much would these small sachets now cost when smaller denominations are introduced to the market? Shall a L$5 bag of peanuts now be sold for between 25 or 50 cents, or less? What impact would these new and smaller currency denominations have on prices generally in the marketplace?
News of the replacement of worn-out dollar notes with brand new ones was particularly heartwarming to Margibians, as it will be to people throughout the country. People cannot wait to lay their hands on the new dollar notes in exchange for the existing ones, which have become so tattered and dangerous to handle because they are so filthy.
The CBL team disclosed that special windows will be opened at various banks around the country through which people may exchange their old notes for new ones. The downside to this is that the cries of “tear-tear” money changers will cease.
The question is, will CBL begin to put into place new notes on a periodic basis so that Liberians may feel that they are now living in a modern new world, at least in terms of the clean money they would now have to exchange from hand to hand each day?
One thing we are sure of: No one, especially vendors, other marketers and businesspeople who handle money in bulk, can wait for the arrival on the market of the L$500 notes. This will make money so much easier to carry. Consider this in contrast to the L$5 silver “doe-lars” of the 1980s, which were not only bulky, but extremely heavy to carry around.
During their meeting with the CBL team, Margibians raised an issue which is on every Liberian’s mind—the issue of the existing dual currency in Liberia—the L$ and the US$. The Margibians called for the withdrawal of the US$ in preference to the L$. But that was a matter far too big for the CBL team; or even indeed for their boss, CBL Governor Milton Weeks himself. Assistant Director for Banking Services, William Dagbe, explained that the issue of foreign currency was a matter exclusively for the National Legislature. It is they who determine what kind of currency Liberia uses.
Indeed, Article 34 (d) of the Constitution states that “the Legislature shall have the power [among other things] to issue currency, mint coins . . . and no coin [is to be] minted or national currency [issued] except by the expressed authority of the Legislature.”
This burning question of the use of the US$ exclusively or along side the L$ has boggled (overwhelmed, baffled) the minds of Liberians for generations. There are those who insist that we have a peculiar advantage in maintaining the dual currency; while others say we should do as all of our neighbors in West Africa and the rest of the continent are doing – use our own local currency exclusively in the transaction of business.
We reckon that this question will definitely be one of the major preoccupations of the administration that assumes power in January 2018.