-Former President Sirleaf Predicted Hard Time
A little over a year since the coalition for democratic change (CDC) Government took control of state power, its opponents have laid blame for the bad economic state of affairs in the country. And when president George Weah spoke on the economic situation in the Liberia, he announced a gloomy outlook of the situation, amongst others, indicating that he met empty coffers with barely US$5 million for government officials. He was still debunked by his predecessor , Ellen Johnson Sirleaf, who stated she left a very healthy economy and good amount of money in the coffer, though she did not say how much her government left. And she continued that had the new CDC Government looked properly, it would have known the actual economic standing of the country. The Cdcian takes a look at what the economy was during the regime of president Sirleaf and team; and other credible sources, and what it is under the CDC Government as of now.
Former president Sirleaf’s gloomy prediction
At the close of 2015, president Ellen Johnson-Sirleaf of the Unity Party (UP) predicted that Liberia would face difficult economic situation. Liberia faces difficult financial times in the months ahead, said president Ellen Johnson Sirleaf as she bided farewell to outgoing minister of finance and development planning, Amara Konneh.
Mr.Konneh was taking up a position with the World Bank office in Kenya, after serving as Liberia’s minister of finance and subsequently minister of finance and development planning in Sirleaf’s near ending second team.
So to all of you, who are here to honor him, let me join him in thanking you and saying to you that your biggest test is coming,’’ she said. Because in the next several months, we will have some difficult financial times and we will be looking to each and every one of you to give your best –to make sure that you steer the course to deliver- not only for him but for your country’’.
A local paper had reported, ‘’pres. Sirleaf’s monotonous declaration of difficult times ahead comes in the wake of a recent slump of prices of major commodities such as iron ore and rubber on the world market. ‘’ The decline in the prices of these commodities is seeing a boomerang effect in the nation which has just experience another budget shortfall__ the fourth since minister Konneh came to the helm of the ministry, earning him the moniker Amara ‘’Budget shortfall’’ Konneh.
But the same paper quoted Johnson __Sirleaf:
Sometimes in the most difficult circumstances for example, while we are here struggling with the fact that we are going to reduce the level of revenue next year, while we trying to cut back, Amara is out there trying to convince the IMF and the world Bank to give more budgetary support and so it is beginning to work. We have a lot of budgetary support, budgetary support to help us finance our budget.
We could not finance our own budget because our domestic resource mobilization is so low, people do not want to pay taxes here’’, she said.
Cllr. Varney Sherman’s Gloomy prediction
In a commencement address at the convention ceremony of the United Methodist University in December 2015, the chairman of the ruling UP at the time, Cllr. Varney Sherman, said he could not wish the graduates a merry Christmas and a new year. I am sorry I cannot even tell you merry Christmas neither can I wish you a happy and prosperous new year, because to the best of my knowledge and experience, you are graduating at a time which will be difficult for Liberia and all Liberians.
According to Senator Sherman, the $16 billion dollars concession agreement promulgated and signed by the stander bearer of his party has left nothing of worth to be
Desired. I wish to tell you that of the US$ 16 billion investments which her Excellency president Ellen Johnson Sirleaf talked about five years ago, not even one-half of a billion has been invested yet and I don’t expect that much investment will be made in the next five years,’’ said Cllr. Sherman.
Cllr. Sherman stated that the failed promise of government to produce 20,000 jobs per annum was bases on the growing economy at the time. But with the ongoing downturn of the global economy and the Ebola scourge, he said all of that has led to unfulfilled promise; thereby, creating disappointment amongst Liberians. He predicted: ‘’it may there force be said without any reservation that the next few years will be difficult for Liberia and its people. These will be years of difficult experience by all Liberians; and it means that those of you who have had the privilege of a college education would have to lower your expectation, yet strengthen your resolve and then go deep into your resilient mood while experiencing these difficulties.’’
Boima Kamara, Sirleaf’s
Finance minister, Also predicted Gloomy Economy.
And the massages of doom and gloom of the Liberian economy was crowned by finance minister Boima Kamara who took over from Amara Konneh.
Minister Kamara at a well-attended news conference held on December 21, 2016 disclosed that Liberia’s economy was in recession and chances of salvaging it in the short term were farfetched.
The minister of finance and economic planning Boimah Kamara went into details:
‘’slow economic performance owing to lowering global prices for Liberia’s key export commodities, especially iron ore, rubber has triggered downward adjustment of real growth from 2.5% to -0. 5 %.’’
He said this implies difficulties in realizing the full-approved revenue envelop, especially the full tax revenue component. Kamara said National budget had experience a critical breakdown-declining from 6.7 % in fiscal year 2015 2015/2016 to 3.6 % in fiscal year 2016/2017.
Kamara added that the National Budget dropped from US$ 622 million in FY 2015/2016 to US $600 million for FY 2016/2017.
The finance minister disclosed that the ministry was unable to raise the projected budget for FY 2016/2017, due to changes in economic conditions which underpinned the draft budget during early may 2016.
According to Kamara, there was also limited support to then national budget which was triggered by the frontloading of donors’ commitment in 2014 to respond to outbreak of the Ebola Virus Disease.
The former finance minister maintained that government had taken a decision to reduce by five percent its spending cost, while foreign travels had also been cut. Minister Kamara further expressed the need for a shift to be made in Liberia’s economy order to increase better revenue generation and job creation for citizens.
He called for more focus on agriculture and manufacturing as possible ways forward in alleviating the economy from recession. The chief Treasure said building a resilient economy would depend on the good performance of the private sector and improve road connectivity to regions involved in agriculture.
He said Liberia could no longer wholly depend on the extractive sector which was now failing the economy; instead there was a strong need to focus on the agriculture as a means of strengthening economic sustenance. Minister Kamara added that Liberia needed industrialization and turning raw materials extracted from Liberia to finished products for the Liberian market and subsequent exportation.
Former US Ambassador Debora Malac’s Concerns Then
With series of budget shortfall, the United States of America (USA), through its ambassador accredited near Monrovia at the time, Debora Malac, urged the Government of Liberia to discontinue the spending of money it does not have.
Ambassador Malac said the Liberian Government was facing a serious budget shortfall, which had impacted its ability to execute ‘’ambitious activities’’ it had planned to benefit country and people.
The US ambassador noted, ‘’it is hard, when you are impatient to make things happen when the money is not there. Sometimes it is good to take a step back to figure out. What is possible with the funding that is vailable, and then looks and hopes for other ways to look for funding.’’
CDC Government’s Policies Intended to Redeem the Inherited Ailing Economy
One major way to begin moving to the agriculture sector and getting agriculture produce to market is to construct roads. This, the CDC Government headed by president George Weah has started to actualize by constructing major roads in the country-connecting neighborhoods and the interior.
Under the ministry of finance and development planning public sector investment program, the fiscal framework for FY 2017/18 prioritizes GOL’S (Government of Liberia’s) spending on key programs that will stimulate economic recovery and diversify economic growth.
In an effort to enhance macroeconomic stability and expand the corridors of economic growth and development, the budget focuses on programs which are necessary to address existing impacts of the Ebola epidemic. Recover output and growth, strengthen resilience and reduce vulnerability, and invests in critically needed infrastructure to ensure that the economic recovery creates jobs and improves welfare conditions in Liberia.
The ministry of finance and development planning says there are also existing challenges facing resource mobilization, ranging from external borrowing, domestic revenue collection, to donor support aid. Borrowing space has been reducing, while the country’s debt levels have been increasing steadily.
It noted that the domestic revenue envelop is relatively low, and the need to expend domestic investment is creasing. Aid level, inflated by post conflict emergency FY2017/18, 37annual fiscal outturn report/ ministry of finance &development planning support and the front-loading of donor support projects during the Ebola outbreak; have been trending downward although it remains partly substantial. However, there is prospect of growth rebound, particularly in the medium term, as economic activities are projected to increase.
The end of Ebola outbreak, the anticipated increase in global commodity prices, and the planned implementation of good policies-including efforts to support private sector development by prioritizing the of new roads, the maintence of existing roads and the expansion of energy supply would push growth upward throughout the medium term to an expected average growth rate around 7.0 percent.
In the midst of this circumstance, the young CDC –led Government committed itself to maintaining macroeconomic stability through the implementation of a number of fiscal measures, coupled with the implementation of interventions stipulated in the government pro-poor agenda to accelerate the peace of recovery.
The ministry of finance and development planning in a position statement says GOL and its partners remain committed to revitalizing the economy through the provision of funding and technical assistance for the implementation of public investment projects like the RIA( Robert international airport} the runway and terminal , the mount Coffee hydro plant, ongoing road construction etc.
Furthermore, it said the Government remains focused on its policy intervention in terms of maintaining macroeconomic stability, instituting measures for enhance domestic resource mobilization and ensure efficient and effective delivery of services.
In the midst of Microeconomic and resources mobilization constraints, MFDP states that the Government is committed to improving the investment climate to spur private sector growth: connect and expand markets: while mobilizing significant amount of additional domestic resource to increase fiscal space to respond mainly to growing public services demands and expenditures pressures.
To reduce the risk of debt distress which is currently positioned at a moderate level?
It notes that the government intends to negotiate attractive terms and conditions for future debts contract payments.
In addition the ministry states that the government will continue to promote youth employment to improve grater standard of living and at the same time improve governance to ensure effective fiscal transparency and accountability. The ministry of finance and development planning will also maintain coordination with the central bank of Liberia to promote macroeconomic stability and sustain growth, according to the statement.
The ministry of finance &development planning with the ambition to promote investment spending, consistent with the government’s pro-poor agenda, said it is particularly essential to increase the levels of macroeconomic and debt stability since the persistent effects of instability conflicts with the goal poverty reduction as would disproportionately fall on the most vulnerable segments of the Liberian population.
The government will however, ensure that such conflict is avoided by lacking the actual challenges facing development in Liberia rather than focusing merely on their surfaced symptoms.