Recent remarks by Central Bank Governor Milton Weeks that over the last 12 months of 2017, US$445.3m was transferred out of the country into individual private accounts has drawn the attention not only of the public at large but also that of the country’s development partners including the United Nations Mission in Liberia, UNMIL.
Speaking at a joint development partner’s forum held at the UNMIL Pan African Plaza headquarters recently, Deputy Special Representative of the UN Secretary-General Yacoub El Hillo expressed grave alarm over what he described as a grave loss to the country given the very dire economic straits in which the country finds itself.
Since Governor Weeks’ revelation, the public has been abuzz with rumours and stories of massive theft of public funds by public officials under the watch of former President Ellen Sirleaf who has just been awarded the Mo Ibrahim prize for “exemplary leadership”. This newspaper, the Daily Observer, in its Tuesday February 13, 2018 edition questioned whether reasons given by the prize committee for bestowing the award on Madame Sirleaf reflected the reality on the ground.
The Editorial also pointed out that, the former president left the country “in complete economic shambles, huge internal and external debts, a woefully depreciating local currency and a bankrupt economy”.
A noticeably angry former President Sirleaf giving her take on the situation following questions posed to her by a BBC reporter, categorically any suggestions of wrong doing on her part, insisting that Central Bank Governor Milton Weeks makes clarification on the issue.
But her remarks have instead raised even more questions to which answers appear not to be forthcoming. In the first place it is rightfully President Weah to whom Governor Weeks is under obligation to provide clarifications.
Additionally it is former finance Minister Amara Konneh, more than anyone else, who should provide such clarifications to his former boss, President Sirleaf. But more to that, the public wants to know, who are the individuals, especially ex government officials that own those accounts into which such astronomical amounts have been illegally channeled.
It can be recalled for instance, that it was under Amara Konneh’s watch that a former government official from the Ministry of Finance, Sebastian Muah was forced to resign in the wake of media reports revealing that Deputy Finance Minister at the time, Sebastian Muah had paid cash in excess of US$200,000 for a casino in Bangui the capital of the Central African Republic.
In another instance, a little over 2m was illegally siphoned from the national coffers, under a dubious scheme and channeled into the account of a local construction company, Solid Rock Investment for work which was not actually performed, again under the watch of Amara Konneh. In yet another instance, over 10m US dollars illegally disappeared from the coffers of the National Oil Company (NOCAL) without trace.
But when pressed with the question, then President Sirleaf responded with a curt answer, “I take responsibility” yet never refunding the stolen amount up to her departure from office. In all of this we should not lose sight of the fact that foreign business interests also play a significant role in illegal capital outflows from Liberia just as elsewhere.
And in this regard, we must also attribute substantial blame to the International Monetary Fund (IMF) and her twin, the World Bank. According to the Service Center for Development Cooperation (Kepa) “the IMF still encourages developing countries to refrain from controls on the movement of capital.
“For example the IMF instructs poor countries to eliminate import duties and to replace the lost revenue with consumer taxes, which particularly affects the poorest of the population. The IMF also exerts immense pressure on poor countries to deregulate their capital and further dismantle regulations on the financial markets”.
And, according to the Service Center for Development Cooperation, the evidence shows that “deregulating the capital accounts leads to a loss of oversight over offshore transactions and the foreign investments directed at the country”. The effect of such deregulation can for example be seen in the wide fluctuations and ever falling value of the Liberian dollar.
In addition the issuance of Executive Order 84 for example permitting foreign owned vessels to fish within 6 nautical miles offshore is a form of deregulation that forces small Liberian fishermen to compete with industrial fishing vessels so close to shore rather than in deep sea has brought untold hardship and suffering to countless Liberians.
What all of this means is that the IMF is to a large extent complicit in the illegal outflow of capital from developing countries including Liberia. And it does so in cahoots with local leaders willing to sacrifice the interests and future of the country for self-benefit. In the final analysis, the onus is now on President Weah to demand explanations from his predecessor on how such large sums of money were illegally transferred out of the country mainly by government officials.
President Sirleaf who, throughout the 12-year period of her rule, never for once disclosed how much was spent in each fiscal year and for what purposes, now has the opportunity to set the record straight by making full disclosure on how the US$10m disappeared from NOCAL under the watch of her son Robert Sirleaf, and accordingly make full restitution since she took responsibility.
This newspaper cannot fail to underscore that President Weah’s commitment to advancing his Pro-Poor agenda will come to nothing if he fails to meaningfully address the problem of illegal transfer of money abroad.
A proper way to begin is to COMMISSION an AUDIT of GOVERNMENT FINANCES, including income and expenditure over the year 2017 during which time US$445.3 million
was illegally transferred to individual private accounts abroad.