President Weah, You Cannot Have Your Cake and Eat It

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Dear President Weah:

I admire your recent honesty that you were aware of the challenges that were present with the national economy when you decided to contest the presidency. It tells everyone, including me, that you are not surprised by what you’ve got to clean up right now. If I heard you clearly, sir, you related these economic issues to the fallen prices of Liberia’s key exports, rubber and iron ore, coupled with the withdrawal of the United Nation Mission in Liberia (UNMIL). You’ve also stated clearly that we remain in this quagmire due to the lack of non-value added to our exports for generations, which you intend to address.

Mr. President, honesty and earnestness have a way to payback those who believe and live by these principles. What these do for those who live by those principles is to help them identify where in life they are and how far they have to go; in essence, it helps them uncover problems and find solutions. I’m not sure if everyone agrees with you. But there are some who want us to believe our current state of the economy, especially the monetary situation, is a result of theft by former President Ellen Johnson-Sirleaf. I wonder why you did not name the former president as cause but instead spoke of other issues? I know those are the actual cause of the situation the country faces.

Let me not make this letter appear like an issue about the former President. Mr President, this has nothing to do with your predecessor but a common advice I’m trying to pass on. I have found that in addition to the salient points raised in your address to the nation on July 16, 2018, one major guide rail missing to stabilize the economy was the surrendering of foreign exchange coming into the country. This decision is going to be unpopular, but I strongly encourage you to take the bull by the horn and mandate it to surrender 100%.

Mr President, along with that 100% forex surrender should be the following measures:

  1. All transactions in Liberia must be carried out in Liberian dollar. Any business found transacting in US dollar should face hefty fines on the first offense and license revoked on the second;
  2. All salaries for public and private employees must be paid 100% in Liberian dollar; from the President to the janitors in public offices and the managers to sweepers in private businesses;
  3. Outlaw the US dollar as legal tender in Liberia.

You have the power, sir, use it. Make this work. From this fiscal year 2018/2019, let’s have all salaries paid in Liberian dollars. I think by doing these things we will remove the relevance of the US dollar from the local market and only importers of goods and services and foreign travels would need forex exchange. This should ease the pressure on the Central Bank of Liberia tremendously.

Mr President, imagine you have provided US$25M to mop up excess liquidity and that exercise is ongoing. Do you know that after all the excess Liberian dollars are collected from the street corners and returned to the CBL the next place they go from the CBL vaults would be back in the streets? When you need to pay salaries and request US dollars from the CBL those notes are going to get pumped into the streets again. This time it’ll not be just Government looking to pay salaries. Businesses would be looking for forex to bring in goods. They may pump excess notes into the streets, the common market for US dollars. The rate may be just where we had it before the mopping up exercise. It may appear that you did nothing when you actually did much. But that much would not be enough, sir.

I think once the US dollar is removed as legal tender the better. You will not believe this but taxi drivers charge for charter on their taxi in US dollar, and even “cold bowl” shops sell dumboy in US dollar. We can’t blame those people when the car is sold in US dollar and the pig feet and onion bags are sold in US dollar.This confusion in the market have to stop. Let the petty traders and the five star hotels all sell goods and services in Liberian dollar only.

Mr. President, on the forex bureaux end, we must bring some sanity and order. How do we do this? Let us have at least four or five companies or franchises registered with the CBL to conduct this business throughout the country. From Pleebo, Maryland County to Duala on Bushrod Island; from Robertsport in Cape Mount to Yekepa in Nimba County; from Ganta in Nimba to Kaloken in Maryland County every forex bureau must be owned and operated by a certified company or franchise.

These companies or franchises are to be held for the rates their branches would offer customers. They should be provided a CBL certified rate and have that communicated to the branches. Communication should be the least of their worries, given the current mobile telecommunications infrastructure in the country. Companies or franchises engaging in acts to cause volatility to the market should face fines on a number of occasions and license terminated for repeated offenses.

Mr. President, each of the CBL Governors since it’s creation in 1999 has struggled with the dual currency regime in the country, yet none ended that regime. These men recognized dual currency as negative consequences on the economy but failed to end it. I urge you to drive the final nail into the coffin of this monetary taboo with the stroke of your pen. We don’t need a law for that, just an executive order is enough.

I am not sure if these are things you might want to do; however,  I thought to let you know as we are going nowhere with the dual currency; 30-70 US to LD salaries payment of salaries; transactions in US dollars, including selling dumboy.

Thanks for all the efforts thus far but you can’t have your cake and eat it.

Cheechiay Jablasone
Journalist & Political Commentator

Authors

3 COMMENTS

  1. After reading the Author’s letter, I found it non-compelling at all to bring about any short term relief to the economy while sustaining long term growth potential for the economy. The Author makes many assumptions without providing any factual predicate to how and why he arrived at those concluded with those assumptions (i.e., theft by Ellen Sirleaf’s administration as reason for the current state of the economy). The three point suggestions can hardly bring stability to the economy. The letter does not provide how those policies would trigger down an economic revival and turn around the inflationary pressure, while preventing potential deflationary results. One has to be careful not to suggest and encourage the President to make policy decisions that impact the economy based on narrow observations of events as described in the letter (e.g., observation of collected Liberian dollar in CBL vault ending up on the street, controlling forex bureau rather than allowing the market demand of such services, and executive order affecting market activities). The government should concentrate on expenditure and tax policies to control employment, while the Central Bank is allowed the opportunity and mandate to control the money supply in its function as an independent expert institution. In this role, the CBL, through its own independent analysis by subject matter expects will understand the micro and macro economics impact of current market activities of exchange rates fluctuations, and imbalance of trade agreements and transactions amongst businesses and with banking institutions, as well as have a view into the implication of how counterfeit currencies are impacting the legally tender notes in circulation. With that at its disposal, the CBL can implement measures to then control the economy. It also allows create trust in the financial system of the country by businesses, both local and foreign investors. I read comments that are sometimes critical of the prior administration for making decisions in economic matters that should have been left alone to the free market mechanism, yet the same comments are asking this President to get involved directly in similar decision making. As suggested in this comment, the President and his administration have at their disposal the ability to control government expenditure and govern tax policies and that should be their focus. As I stated in an earlier comment, there was no clarification on the direction of the $25m infusion (e.g., what sector was it geared for, and if not sector oriented, how was it to be appropriated?). To borrow from a more advanced economy, the U.S., Congress controls the power of the purse, and so the Legislature controls the power of the purse in Liberia. But how often are these Legislators meeting with their constituencies to understand the actual cause of the economic plights in these communities and how are they aggregating those concerns into legislative package for passage into law or stop guard measures to improve the economy in areas that are hard pressed in the short term? I will critique the President when I see it necessary, but also provide defense when necessary not because of any particular like or dislike for the person holding the office. Rather I am more interesting in contributing to defining how we look at the office of the presidency. We should at a minimum demand that he appoints people to offices from all walks of life who are qualified, and not just those who are politically aligned with hi political party.

  2. Mr. Cheechiay Jablasone

    Imagine the political gridlock and the economic paralysis that would have followed and thus stalled the national development and progress of the great United States of America if every president that ever succeeded an outgoing president would instead of finding ways to move the country forward, began to waste his political capital, time and energy and the country’s resources on unfounded and unsubstantiated claims to bring the former leader to justice.

    Is this what you are suggesting? A case in point: When former President Obama inherited an economy that was ravaged by one of the biggest financial scandals in world history from former President Bush, Jr., he (Obama) did not impanel a world court to hold Bush accountable for an economy that was already in an “economic depression”.

    Obama knew that in this game of politics, you “do not only talk the talk, but you must walk the walk”. What happens then when the going gets tough? The tough must get going brother!

    The primary purpose of Weah running for the Liberian presidency was to improve the economy and better the lives of everyday people. That is why he wasted no time in articulating to the people that his government would be a, “Pro-poor Government.”

    Weah fully realizes that the ball is now in his court; and that he must use his education, experience, and his ability to tap the proper talents to bring the country out of this situation.

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