The Little Boy and the Poo-poo Palm Kernel: Any Lessons Learnt?

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Just what is the fate of the investigation launched since early October by the Government of Liberia into the case of the alleged disappearance of 16 billion Liberian dollar banknotes remains unclear at this point. The public has been taken for a virtual roller coaster ride thus leaving many to question whether the Government of Liberia is indeed serious about uncovering the mystery of the missing money.

Added to that is the case of the US$25 million said by the Finance Minister to have been infused in the economy. Questions are therefore being asked who actually conducts monetary policy, whether it is the Central Bank of Liberia (CBL) or the Minister of Finance.

Resultantly, recent attempts by the Minister of Finance to provide explanations to the Liberian Senate about the missing billions have only left the public confused, not knowing what to make of the conflicting and contradictory accounts.

In one breath the Minister said his previous declaration that ‘no L$16 billion was missing’ did not in any way mean that no money was missing. The Minister continued: “If we are investigating something missing my clue to you is that we are going to find something more. That was a general statement in caution. The media is here, let me clarify to you that I said no L$16 billion is missing, I didn’t say no money is missing. Those two statements are different”.

Aside from that, the Liberian public is anxious to know just how much money is actually in circulation. The Finance Minister is on record for having declared that the total amount of money (Liberian dollar banknotes) in circulation is L$16 billion plus. Reasons for their anxiety stem from concerns about the continued depreciation of the Liberian dollar (LRD) against the US dollar (USD).

It is important to note that the depreciation of the Liberian dollar against the US dollar began even before the coming of the Weah admnistration to power. The CBL in its 2016 annual report observed that the its attempt to mitigate the exchange rate volatility fell below the total interventions for 2015.

The CBL further noted that its attempts to mitigate exchange rate volatility was given a strong shot in the arm by net inward remittances on which the Government of Liberia imposed a 25 percent surrender to be paid in Liberian dollars at a rate determined by the CBL.

Additionally, the Government of Liberia issued Treasury bills (T-bill) and introduced Treasury bonds (T-Bonds). The CBL further noted that, by the end of 2015, the average exchange rate had depreciated by 13.9 percent to L$100 to US$1, largely on account of high demand for imports.

The CBL also observed that in 2016, it sought and obtained Legislative approval to print additional Liberian dollar banknotes in the denominations of L$5, L$10, L$20, L$50, L$100 and L$500.

According to the CBL, the main purpose of the approval sought from the Legislature was to replace the mutilated notes currently on the market. By the end of 2016, the amount of Liberian dollars in circulation amounted to ten billion, eight-hundred thirty million, eight hundred thousand Liberian dollars. (L$10,830,800,000).

The CBL attributed the growth in currency in circulation at the time to a 2.9 percent increase in currency held outside the banks, thus accounting for 91.7 percent.

Only less than two years later, the value of the Liberian dollar had depreciated sharply against the US dollar with the exchange rate currently hovering around L$156 to US$1.

The continued rapid fall of the Liberian dollar against the US dollar alarmed the public and, in response, the Governor of the Central Bank (CBL) in a press conference held on October 2, 2018 announced that it planned to infuse US$25 million in the economy in an attempt to halt the downslide in the value of the Liberian dollar.

But rather than the CBL acting on its pronouncement, it delegated its statutory authority and responsibility to effect monetary policy to the Minister of Finance which, in the opinion of legal analysts, constituted a blatant violation of the law.

And in keeping with the law and best practices, the money should have been infused in the economy through the commercial banks. However in a highly unprecedented but illegal move and contrary to best practices, the Finance Minister admitted to having bought excess cash directly from individuals believed to have been in possession of large amounts of Liberian dollars.

What this newspaper finds disturbing is the potential danger inherent in such surreptitious arrangements and misconduct of public policy are creeping signs of the reemergence of a nascent dictatorship under President Weah.

When, for example, media institutions are penalized (denied legitimate payments for service rendered, withdrawal of adverts, etc.) for reporting the truth and asking hard questions, we cannot help but warn that these actions are but symptomatic of a clear and present danger lurking in the shadows.

For those individuals countenancing and harboring such inclinations, this newspaper can only remind them of the ancient wisdom in the folk story of the little boy and the poo-poo palm kernel who was warned that the palm kernel he was attempting to crush was encrusted with poo-poo (feces), but who retorted that the poo-poo was on the husk and not the kernel itself.

To his shocking dismay but much too late, he experienced the nauseating taste of poo-poo with its obnoxious smell lingering all over his face. But then it was much too late. So Beware, Good Friends!

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