The attention of this newspaper is drawn to a story carried in its March 12m 2019 edition written by reporter Joaquin Sendolo headlined “Gross Decline May Pose Further Hardship, Says IMF”.
According to the story the International Monetary Fund(IMF), has observed that the growth in the country’s economy has declined and it has further predicted increased hardships on the Liberian people as the result of the decline in growth.
The IMF predicts that while growth for 2018 was estimated at 1.2 percent, for 2019 this outlook has been revised downwards from 4.7 percent to 0.4 percent. The IMF further noted that the exchange rate depreciated by 24 percent in 2018 while inflation rose to 28 percent by the close of December 2018.
This, according to the IMF, is detrimental to most Liberians who earn and spend primarily in Liberian dollars. Further, according to the IMF, productive spending is being crowded out by a high wage bill including discretionary allowances which together amount to two thirds of total government expenditure. Quite clearly, according to the IMF, this situation, if left unchecked, portends danger for the realization of the Pro Poor Agenda for Prosperity and Development.
While this newspaper holds some reservations about the IMF’s observations and recommendations, it is however compelled, by force of evidence to agree that discretionary spending especially on perks and allowances and the mass infusion of CDC partisans to the national wage bill, irrespective of qualification, is unsustainable and could lead to or provoke civil unrest especially if government finds itself unable to meet its monthly wage bill.
This newspaper has consistently warned President Weah about the dangers of ignoring calls for accountability especially of past and current officials who are perceived as having acquired huge but unexplained wealth. Also, this newspaper has unfailingly called on President Weah to take stern measures against corrupt officials as a way of enhancing greater prospects for the attainment of his Pro Poor Agenda.
For example this newspaper, once having become apprised of the newly introduced charges under the compulsory Cargo Tracking Number system operated by a Sierra Leone based company, and the opposition of virtually the entire business community to the new scheme, called on President Weah in its February 12, 2019 editorial to heed the warnings of the Liberia Chamber of Commerce and scrap the CGTN deal.
To the best of available information, this nebulous arrangement with the Sierra Leone based company has already been actualized as the National Port Authority (NPA) has promulgated announcements to the effect that all importers have to comply with the regulation. And as the business community has warned, such action will more likely than not lead to increased hardships as the prices of commodities will rise and shortages may ensue. But it appears as though President Weah is not listening.
At this stage, it remains unclear whether the Legislature has approved the agreement and, in case it has not received legislative approval, the public needs to know. The Legislature is in fact implored to not grant its approval to the deal.
This newspaper must again warn against proceeding with the CGTN deal because it will be sure to induce hardships which will certainly prove unbearable for the people. And such could likely provoke anti-government popular mass action replete with unforeseen consequences.
In the opinion of this newspaper, both the Kroll and the PIT reports provide an excellent window of opportunity for President Weah to absolve his administration of blame and accusations of culpability in the “missing billions” affair.
This is indeed a critical requirement to creating the appropriate preconditions for growth as recommended by the IMF, for effectively tackling corruption means creating and building confidence in the economy. Currently, government relies heavily on borrowing from the Central Bank to finance its operations.
According to the IMF, this practice has to stop if any meaningful progress is to be achieved. This is because financing of the provision of public services will require policies that will curtail wasteful spending and ultimately expand the government’s resource envelope. But to the contrary, when public officials keep behaving in ways that reflect a gross lack of appreciation of the dire economic straits in which the country now finds itself, then there is little reason to hope that there will be an upturn in the economic situation anytime soon.
Officials of the Central Bank of Liberia (CBL), for example, need to explain just why they kept investigators at bay and prevented them from doing an actual count of currency banknotes both local and foreign in its vaults if this administration indeed has nothing to hide.
And to the IMF, the Liberian people need to know just why it failed to warn that things were not going right at the Central Bank during the reign of President Sirleaf. The IMF, for example, was fully aware that financial transactions especially those involving the sale of bonds and securities were not being documented, yet it maintained silent.
But more to that, the IMF must be also aware that the financial mess in which this current government finds itself is largely the making of the previous government. We cannot continue to make pretenses of the fact that the economic miracle hoped for by the promise of over $US16 billion in direct foreign investment was nothing more than a mirage under whose cloud the country was to be milked by predator investors including the International Finance Corporation that had shares in the exploitative Kinjor gold mining operations in Grand Cape Mount County.
As often said and repeated, President Weah must take charge and lead or accept to be led to an untimely and unkind fate. We needn’t say more!