The House of Representatives took its time from January to March this year to deliberate on the merits of the CBL’s latest printing request. And, as might have been expected, their depth of scrutiny of the matter before passage appears to be ankle-deep at best. Now is the Senate’s turn to weigh in and we have some observations that we hope they will take into account.
1. Why “a new family of notes?” Don’t tell us Mr. Weah wants to waste all that money pulling an S.K.D., just to get his face on a banknote. We agree the legacy bills are dirty and tattered. That is why the CBL printed newer ones – let’s call them 2nd Generation (Gen. 2) – between 2016 and 2019. The point there was to keep printing until they had fully replaced the older notes. What purpose would it serve to replace the new with the newer and thus waste all the money we have already spent? Where is the IMF when we need them to speak truth to power? Haven’t they been pushing the CBL to cut costs for the last three plus years? What happened?
2. Does CBL expect counterfeiters to retire once this project concludes? The Bank claims a new design “with stronger security features” will stop duplication. Since when? We’ve got news for Mr. Tarlue: Criminals will criminal, criminally. You have lived and worked in the US and should know about those yellow pens they use in supermarkets to authenticate green backs. Teach the public how to tell a good note from a dupe.
To be fair, the public was initially frustrated with the 2nd Generation L$10s and L$500s, both blue, being easily mistaken one for the other, so there was talk of redesigning those. But Liberian people are not stupid. Those who lost L$500 once, remembered to check the next time. Then, they spread the word and we all got used to it. Quickly. Similarly, the US Dollar is our original legal tender and we have long been used to all its denominations being the same color. So, spare us with that drivel about a new design. Keep the latest currency and let’s move forward, because…
3. It has been FIVE YEARS since we began this currency replacement process. The point was to print in installments because resources were tight. Now the CBL wants to make this a NINE-YEAR sojourn, at least. Yes, our count is accurate. While the Bank intends to conclude this by 2023, we recall that it took several months to complete design for the 2nd Generation notes. So, we don’t expect to see the 3rd Generation off the press until December or January 2022, at the earliest. Especially given the slow speed at which the Legislature tends to make its most urgent decisions. And, while we wait for the full L$48.733 billion to manifest…
4. Our old ma them will be checking which money to fold in their lappas on what day. Remember when the CBL released L$5 billion of the 2nd Generation banknotes in 2016? With both versions circulating at the same time, Gen. 2 rendering the Gen. 1 undesirable. Foreign exchange bureaus began assigning each family of notes a different exchange rate. Put a third generation of notes in the mix and a similar monetary policy crisis is sure to ensue. And yes, the public will eventually get used to the situation and the multiple exchange rates will reconverge. But what will remain damaged is their perception of the CBL’ competency, because…
5. The value of the Liberian Dollar is just a litmus test for the public’s perception about the institutions that govern our economy – not just their perception of the banking system, as Finance Minister Samuel Tweah earlier suggested. When foreign politicians, economists and financiers refer to “low confidence” in our currency, that’s just a diplomatic way of saying our Government cannot manage our economy, either due to incompetence, corruption, or both.
6. Speaking of incompetence and corruption, if President Weah wants to raise the value of the currency, he can start by shedding the dead weight in his Cabinet and across Government. Let’s start with his having appointed a novice to head the CBL. Weah needs to fix that by April 2021, which is when Milton Weeks’ uncompleted five-year term ends. Prosecuting Mr. Tweah and all the other functionaries involved in the US$25 million mop up that went awry would also be much cheaper and a far more effective means of restoring public confidence.
7. Staying on corruption, the estimated US$45.5 million price tag on this printing project begs the following questions: who stands to benefit from the crumbs that will inevitably fall from the edges? And who gets a piece from the middle? Did our readers notice the caveat in Governor Tarlue’s statement regarding the House’s approval of the printing? On March 19, 2021, the Daily Observer quoted him as saying, “this estimated cost doesn’t include domestic logistics requirements for the replacement and the costs of the designs, quality, and security features.” So, then we’re talking far more than US$45.5 million.
8. Let’s zoom in on the “design, quality and security features” that Tarlue jammed in at the end of his statement. That refers to the preliminary steps toward printing the 3rd Generation notes. Why has the CBL not made clear the estimated cost of that portion of the operation? We would wager that it constitutes a significant percentage of the total cost; it certainly constitutes the least necessary.
9. If the CBL weren’t designing a whole new Generation from L$5 through L$500, the cost would undoubtedly be far lower. If they were to continue printing 2nd Gen. notes to reach the L$48.733 billion mark, its very first installment of L$35.769 billion would far exceed the needed amount.
Let’s do that arithmetic.
(L$5bn in 2016) + (L$10bn in 2017) + ($4bn in 2019) = L$19bn printed
(L$48.733 billion total needed) – (L$19bn already printed) = L$29.733bn to be printed.
No calculus involved.
10. We tend to agree that a new L$1,000 would help. Restricting the new printing to L$100, L$500 and L$1,000 notes only would give us even more bang for our buck. Printing houses charge based on the cost of the paper they use, not the face value of the note. It should cost about the same amount for a L$100 as it does the L$1,000 note, barring the expense of security features.
Let’s do more math. Tarlue said “The estimated cost of printing the full L$48.733 billion (569.023 million pieces of paper banknotes) for the three years is approximately US$45.522 million. That’s about US$0.08 per note. So, if we print fewer notes and each note has a higher face value, we get more for less. No?
So, we’re throwing Weah a bone here. If he wants his face on money so badly, let him slap it on a L$1,000 note and keep the rest of our money as it is. That is how much his ego is worth to us. A cool US$5.88 at an exchange rate of L$170/US$1.
11. Lastly, we are in the 21st year of the 21st century, folks. How about some technological advancement toward a cashless society to deal with our liquidity issues? Sure, we need our own currency. But the rest of the money our mathematical genius has just saved from cutting our currency management costs could pay for the upgrade of our payment systems. The Daily Observer demands that this government refrain from mentioning this as an afterthought sandwiched in between statements about the need for cash. Weah, inexplicably popular as he still is in a diminishing cross-section of our society, needs to use his voice to promote mobile money as the preferred mode of transaction. But again, if he will maximize his credibility to achieve that feat, he may first need to fire Tweah and Tarlue.