The Currency Issue Needs Urgent Action, Not too Much Talk

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A major challenge faced by the George Weah Administration is the depreciation in the value of the Liberian dollar which adversely impacts the prices of basic commodities. This is the first time in Liberia that the exchange rate of the Liberian dollar to the US dollar has climbed as high as LD$160.00 to US$1.00.

In fact, the rise in the exchange rate appears to be on the increase daily, thus breeding much public anxiety. The most vexing issue facing people amidst the economic crisis is transportation and that is determined by the price of gasoline and fuel.

At most filling stations in Monrovia, a gallon of gasoline is sold for LD$535 while diesel fuel is sold for LD$545. Some vendors selling on sidewalks also sell a gallon of gasoline for LD$575 in some places.

This leaves drivers with no option but to increase fares of transportation in consonance with the reality of the day in order to meet their daily quotas. But what happens to the ordinary people by whom a government is popularly elected?

These are the people whose support and votes our politicians including the President, Senators and Representatives canvassed for unceasingly. The people voted them in power, expecting them to make things better.

But amid growing economic hardships, hopes appear to be fast fading that their leaders can indeed make things better. There are, however, a number of factors experts and observers say are responsible for the current economic decline.

Dr. Somah Paygai, vice president for administration at the African Methodist Episcopal University and former chairperson of the National Investment Commission (NIC), observes that the “abrupt increased supply of the Liberian dollar on the market” is one of the main factors responsible for the depreciating rate of the local currency.

Paygai further said most commodities are priced in US dollars, thus creating an unusually high demand for it. On the other hand, those with little or no knowledge of Economics are of the view that previous and current administrations have failed to control prices of commodities and fares of transportation in the country — thereby leaving business people to arbitrarily fix prices of goods and services.

Additionally, there have been recent reports of arrest of Nigerian nationals and others with huge amounts of counterfeit dollars, while some Fulani traders are said to be refusing the Liberian dollar.

As we have repeatedly stated in a number of editorials, this government assured Liberians that it knew the problems that they were going to encounter, and was prepared to bring a change to positively impact the citizens.

During their campaign for office, members of the Coalition for Democratic Change conveyed the impression that they were going to improve the living standard of Liberians as quickly as possible.

Now is the time more than ever to do so since the CDC holds the reins of power. We therefore call on the CDC-led Government to consult as widely as possible to find solutions to the economic problems facing the country. And lest we become remiss, Government officials should avoid too much loud but empty talk and get down to the real business of governing.

Authors

4 COMMENTS

  1. First and foremost, you need to Audit the Central Bank’s operations. No, I don’t mean an audit of the Bank’s financial statements. What I mean is, a complete review of the bank’s monetary policies.

    Look. The Central Bank plays a big role in our economy. It controls the money supply and has the power and authority to “issue legal tender banknotes and coins”…. But they CANNOT “issue legal tender banknotes (print money) of out thin air!!

    Today, there is EXCESS supply of Liberian dollars (money) in the economy. If there is more money chasing the SAME amount of goods, businesses will jack up their prices!! That’s why prices of goods have skyrocketed in Liberia.

    Memo to “cold water” lawmakers: Audit the CBL now, you idiots!

  2. A stranger reading this obviously slanted editorial would think that the Weah government took a silly action which triggered a supposedly unprecedented spike in the exchange rate, or the losing ruling party – under whose leadership the economic downturn started – would’ve urgently solved the problem had it retained power.

    Ironically, in 2017, while elections were going on, the governor of CBL alarmed that US $513 million was illegally transfered into accounts abroad. Needless to say, we don’t know how much other hidden loots were being cartered away too. And since unexplained wealth is a probable cause for initiating fraud investigation, one thought that LACC would’ve contacted Governor Weeks.

    But having been assured of “tenure”, the LACC leadership cared less about the possibility of a major economic sabotage. Of course, in spite of several comments on the issue, the previous government showed no interest. We therefore had a situation whereby there was a significant illegal flight of hard currency and no one in power gave a bloody damn. Then we wonder why never mind the usual bookish talk nothing hardly gets done correctly anywhere.

    Mr. Martin Scott’s suggestion is worth considering, but the issue demands a multi-pronged approach. We need a taskforce comprising of government’s economic team to urgently evaluate the issue and propose measures to mitigate the deteriorating situation. While we are at it, perhaps this is time to consider reconstituting the Ministry of Planning and Economic Affairs; merging it with Finance Ministry was a mistake, let’s make the correction.

  3. This is a very positive article, the kind I will like to see more of. I like to address the concerns raised by Martin and Sylvester. If you read the article, you can see it is very factual in what’s stated. The first paragraph addresses the current exchange rate in the country. That’s a factual statement. The second paragraph mentions the daily increase in the exchange rate. That’s also a statement that can be proven true or false. The 3rd paragraph relayed information about the cost of gasoline at most filling station. Also factual. The fourth paragraph also is factual. It state an expected result of what happened due to the reasons in the previous paragraph. The 5th, 6th and 7th paragraphs have nothing that’s politically leaning against the government on a partisan basis. In fact, the last paragraph suggests the very thing Sylvester is suggesting in his comment; that a group of diverse experts be formed to ascertain the best way to improve the economy.

  4. I think there is too much speculation as to what caused the problem and how to fix it. I highly doubt this problem has a singular cause, such as the CBL printing too much money. There are some good ideas, however. But what I observe, and which is unacceptable is the lack of leadership on the issue. By now you would think President Weah would have come out and give a speech to the country to reassure the citizens that his government is working to fix the problem. Absence of leadership on the issue is causing much anxiety and substantial decrease in confidence by the business sector, and the public at large. President Weah needs to stop hiding and come out to explain to the people what is going on with the economy and provide solutions. Absent of that approach, the economy will continue to deteriorate. The government is inept, no doubt.

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