The Daily Observer in its yesterday’s July 9, 2018 edition reported that House Speaker Bhoffal Chambers has called for the adaption of a single currency, preferably the United States dollar as the country’s official medium of exchange.
Speaker Chambers, reacting to expressed public concerns about the continued depreciation of the Liberian dollar against the United States dollar said monetary control in the Liberian economy is seriously challenged by the loose availability of the two Liberian currencies in multiple styles and values of denominations.
The Speaker further laid blame at the feet of former President who, according to him, created what he called an economic gulag by printing excessive amounts of local banknotes much against the advice of the Legislature.
We must however take Speaker Chambers’ blame-casting with a pinch of salt because he was part and parcel of the government of the day as a sitting law maker with the power to approve or reject bills, agreements, treaties, conventions and the list goes on.
Needless to say, blame-casting without taking the necessary corrective measures will amount to nothing more than an exercise in verbal calisthenics. We all agree that there is too much money, Liberian dollars that is, chasing so few US dollars so prices of commodities and just about everything else are high and keep climbing higher.
But how much time do we take off to reflect on the many little ways in which are going wrong? For example, in face of the fact that the volume of Liberian dollars on the market is huge, what can explain the troubling fact that the banks or rather the Central Bank is still permitting the circulation of mutilated notes?
The Daily Observer notes that there is virtually not a single local commercial bank to where an individual can go to have his mutilated banknote exchanged. But around Monrovia and in other places around the country, there are itinerant, mutilated banknote exchangers advertising their wares, new money for old money-“Money tear-tear” they call it.
Just where else in the world can an individual become stuck with mutilated banknotes that are rejected by traders and cannot be exchanged at any local bank or the Central Bank? The Daily Observer knows of no other country but Liberia.
Are our financial experts virtually incapable of finding solution to this problem? What role then can be expected of the Central Bank whose function it is to regulate money supply? Does it ever occur to policy makers that permitting such practice to continue is only exacerbating our economic woes?
From our perspective based on insider sources and based on careful observations, mutilated notes being kept in circulation is a criminal but profit making enterprise involving bank officials and employees. This newspaper believes that if President Weah is indeed serious about reversing the current downturn and rapid depreciation of the Liberian dollar, he must act to halt this practice forthwith because it is hurting the economy and hurting the people.
If there is a problem of excess liquidity of Liberian dollars, part of the excess is sure to be mutilated banknotes which for no clear reasons are being recycled with the apparent acquiescence of the Central Bank. All of this is hurting the people and should stop.
Another troubling concern and a contributory factor to the current economic malaise is the refusal of the Liberian Revenue Authority (LRA) to accept the Liberian dollar in tax payment. This duality is not only contributing to the scarcity of US dollars on the Liberian market, it is also undermining confidence in the Liberian dollar as legal tender, rendering it virtually worthless.
Even driver licenses, passports and other taxes for example are paid for in US dollars although ordinary Liberians do not earn US dollars, neither do they transact daily business in US dollars. Why then should conditions improve when such situations are allowed to persist?
Why, for example, does the LRA double-tax Liberians who import goods into the country, is a question which has been asked time and again but yet without answers. As a way of improving efficiency in tax revenue collection, the government of Liberia since the 1980’s has had standing agreements with pre-shipment inspection companies.
Initially it was the Societe General de Surveillance (SGS) and since Charles Taylor, it has been the Bureaux Veritas (BIVAC) both being reputable foreign companies. Under those arrangements, for example, at the request of an importer, through the Ministry of Commerce the BIVAC inspects the goods destination bound for Liberia and assesses a dutiable tax based on price of the item or commodity which the importer pays to the Government of Liberia through the BIVAC.
However, upon arrival of the goods, the LRA again demands the importer to pay additional tax using what it calls the “Tally Blue Book” as a basis to determine what the LRA considers the applicable duty.
Because of this strange but illegal practice, many Liberians are reported to have lost thousands of dollars’ worth of goods or property simply because they could not afford the additional taxes imposed by the LRA plus unusually high demurrage (storage) fees charged by APM terminals for keeping the goods in storage for a few days.
And lest we be remiss, Executive Order 84 allowing foreign vessels to fish within 8 miles offshore, curtailing the ability of local fishermen to serve the needs of the people, still remains in force not having been repealed.
But in all fairness to President Weah, these are all inherited problems from his predecessor. However he now has the opportunity to act to make a difference, he should and he must and must do so with a great sense of urgency.