The debate about the US$6,500 paid recently to members of the Legislature has exposed interesting activities (i.e., prior expenditure, secret budgetary arrangement, or inducement payment) between the Liberian Executive Branch and Legislative Branch, with Liberians asking again the obvious question. Why is the country not spending its limited resources on priority programs?
Many Liberian senators have since provided various answers and explained that President George Weah did not bribe them as alleged by Senior Senator Prince Johnson. Some have claimed that the Executive Branch and the Legislature included the payments within the 2020-2021 budgetary outlay, which both Lawmakers and President Weah signed into Law. Another Senator has asserted the amount was a liability while another has called it “claims”. We tend to agree with the latter.
But a review of the budget on page # xxvii, the Summary by Economic Classification under number 1.6 did not indicate that the amount paid to the upper Lawmakers and/or both lawmakers were included. Item 21 (compensation of employees) shows $322,672,328; $297,000,000; $297,000,000; and $297,000,000 $297,000,000 for fiscal periods 2018-2019, 2019-2020, 2020-2021 and 2021-2022 respectively.
Further, on page # xxxi, the Summary of Classification by Function under number 1.9 gave a combined amount for the executive Branch and the Legislative Branch. Item 0111 (Executive and Legislative Organization) shows $93,984,929; $78,062,720; 78,062,720; and 78,062,720 for fiscal periods 2018-2019, 2019-2020, 2020-2021and 2021-2022 respectively.
However, on page # 2, under the title called “spending Entity,” the Legislative Branch reported amounts as $30,410,392; $25,701,390; $25,701,390; and $25,701,390 for 2018-2019, 2019-2020; 2020-2021; and 2021-2022 . This means therefore, that the allotment to the Legislature was reduced by US$4,709,002 from fiscal years 2018-2019 and 2019-2020 respectively. Why? It is because 2019-2020 covers the month of July 2019 through June 30, 2020. The question here is whether the reduction deprived Legislators from getting their special Operational expenses?
In this regard, it is important to understand that the Liberian Senate has an allotment called “Operational Expenses. As indicated on Page# 6 of the budget, US$497,564 was allotted for fiscal year 2018-2019 while for fiscal year 2019-2020 US$256,501 was allotted and for fiscal year 2020-2021, US$336,868 was allotted while for fiscal year 2021-2022, $335,288 is allotted respectively.
Predictably, legislators will argue that the government appropriated the amount in question. For his part, Senator Dillon has told journalists that the money was allotted, checks were prepared and disbursed accordingly. However, the most important question is, did the government have the money to do so? Or better yet, from where did the government get the money since it has and continues to maintain that government is not collecting adequate revenue to cover its daily expenditure?
We must clarify, though, that a government can borrow cash to finance its operations. So, in principle, it is legal for government to borrow money to cover its daily expenditure, including the special allowance in question. But rather than borrow money from lending institutions, government has since and most regrettably turned to state owned enterprises/entities such as NASSCORP which manages poor people pension funds and which itself is cash strapped.
As reported by the Central Bank of Liberia, the Liberian government took L$560.7M from the Liberian people social security pension funds. As stated, “…the government issued a 1-year indexed treasury bills in the tune of L$560.7 million to the National Social Security Corporation (NASSCORP).” Demanding cash from cash trapped state-owned entities and classifying same as a sale of bonds is indeed very troubling.
For example, the 2019 Central Bank of Liberia Annual Report stated that, “from January 2019 to December 2019, a total of L$1.7 billion was raised through the issuance of government securities to institutional investors with a complementary redemption in the tune of L$837.0 million at a “weighted average yield” of 4.4 percent.
Analysis show that of the total amount, the government issued a 1-year indexed treasury bills in the tune of L$560.7 million to the National Social Security Corporation (NASSCORP) and L$300 million to a commercial bank on behalf of the Rubbers Planters Association of Liberia (RPAL), respectively. The remaining L$837 million was raised through the 91-day T-bill”. But why, for example is the government of Liberia financing RPAL which is neither a public corporation nor an agency of government?
The public ought to know that poor Liberian farmers are compelled to surrender portion of their earnings to the RPAL from which they derive no benefits or in which they hold no real stake. The public also ought to know that during the Sirleaf administration the RPAL was a virtual cash cow for government officials. Fights for control over its finances have been an enduring problem which may have led to the brutal killing of Keith Juba, appointed by former President Sirleaf to oversee its operations.
In view of this, the public ought to know just how the L$300 million treasury bill issued to the RPAL is going to be redeemed. Also how can the Central Bank of Liberia justify the siphoning of poor people pension savings from NASSCORP under the bogus pretext of a “sale of bonds” in order to finance government operations? What will then become of poor people pensions savings should government find itself unable to redeem those bonds in the near or short term?
This is a matter of grave public concern, a recipe for trouble, social unrest which could very well undermine the legitimacy of this government. Moreover, the National Legislature whose responsibility it is to provide oversight appears to have failed its fiduciary responsibility and surrendered same to the Central Bank of Liberia (CBL), which is regrettable and most unfortunate.
This kind of “dig hole, cover hole” mentality of our national policy makers is hurting the country. Taking poor pensioners’ money to finance government operations, i.e. the US$6.5k payout to legislators, is unthinkable and tantamount to “cutting the nose to spite the face”.