-Says ‘It’s Not Time To Blame Past Administration’
By Reuben Sei Waylaun
What appears to be a frank response to critics of former President Ellen Johnson Sirleaf was made by President George Manneh Weah Monday when he said the current situation in the country doesn’t require blaming the past regimes.
Prior to the President’s speech, some officials of the governing Coalition for Democratic Change (CDC) including House Speaker Bhofal Chambers, Deputy Information Minister for Public Affairs, Eugene Fahngon, the chairman of the party, Mulbah Morlu among others have accused the administration of former President Ellen Johnson Sirleaf for allegedly creating the current economic hardship in the country, a statement yet to be proven by them.
They also accused the Sirleaf’s administration of depleting the coffers of the Central Bank of Liberia (CBL) which has reportedly caused the national reserved to be at the brink of insolvency.
Currently the exchange rate of the United States dollars to the Liberian dollars is fluctuating with US$1.00 to LRD 162.00, LRD163.00, LRD164.00 among others across the country. This has caused the Liberian dollars to be terribly devalued and the prices of basic commodities skyrocketing on a daily basis without price control from the Liberian Government. The demand for the United States Dollars has become so hard on the local market as money changers taking all street corners for transactions.
It is also alleged that counterfeit banknotes of the local currency are high on the market.
However, addressing the nation on the state of the economy Monday, President George Weah reminded Liberians and his followers that it is not time to complain about the bleak situation they inherited or to cast blame upon previous administrations.
“It is not for us to complain about the bleak situation we inherited; or to cast blame upon previous administrations. Ours is a duty and responsibility to find new and sustainable solutions to these age-old problems that have stubbornly defied solution in the past. We were very aware of these systemic problems when we decided to run for the high office of President of Liberia, and so we are not surprised,” he said.
Speaking further, the Liberian chief executive said they were fully of the challenges of today when they were in opposition for twelve consecutive years in the country.
“We are fully aware that we were elected with the expectation that we will solve these challenges. This is a task that we are now embarked upon with strong determination, focus, and commitment. As a first step in this direction, we have placed emphasis and urgency on the formulation of a comprehensive development strategy that will be supported by a strategic implementation plan.
“The development strategy, to be known as the Pro-Poor Agenda for Prosperity and Development, is nearing completion, and will very shortly be presented to all stakeholders, including our foreign development partners, the private sector, and the general public, for consultation, input, and buy-in, before being finalized into a strategic implementation plan,” he added.
According to him, the development strategy and implementation plan will serve as a road-map for the urgent and important next-steps to be taken in giving direction to the economic recovery, and will consist of short-term interventions, medium-term reforms, and long-term restructuring of the Liberian economy.
The Economic Situation In The country:
He said they are fully aware of the difficult macroeconomic situation in the country reminding Liberians that this has been for many decades, which has caused the country to have incurred trade deficits because Liberia as a country imports more than we export.
“We also have an economy based on traditional exports such as iron ore, rubber, coffee, etc., which are shipped to foreign buyers in their raw state, without any value-added propositions which could have also contributed significantly to industrialization and employment. Additionally, the prices and demand for our exports are determined and affected by factors beyond our borders and are therefore beyond our control.
“Slumps in demand for the products which utilize our raw materials will always result in externally-generated shocks to our economy. The world as a whole is facing new economic challenges. Of late, trade wars between the major manufacturing countries could also reduce demand and place downward pressure on the prices of our major exports,” he further explained.
Meanwhile, President Weah said on a positive note regarding investor confidence, the country has moved to a new level of sustainable peace, which he said has led to the withdrawal of the United Nations Peacekeeping Mission in Liberia (UNMIL)
This, he however said has some negative impact on real estate, and inflows into the economy of the US Dollars spent by the former Peacekeepers.
“Finding lasting solutions to the present macroeconomic challenges will take some time, because nothing less than the structural transformation of the Liberian economy will produce sustainable recovery and growth.
The key to success in this endeavor is for Liberians to produce more goods and services locally, so that we reduce our importation of goods and services from abroad, whilst at the same time increasing our exports and adding value to the raw materials that we ship to the world.
In this regard, our government intends to embark upon a major push to ensure that Liberia becomes more competitive in terms of domestic production. And in so doing, we intend to encourage and empower Liberian businessmen and Liberian-owned businesses to lead the transformation of the Liberian economy. We will enable them to become more competitive, by providing affirmative policies and support, including ready access to finance and expertise,” he assured.
He said the aim and intention of this approach is to encourage import substitution and manufacturing for export, as well as sustainable wealth and job creation.
But this, he said is a medium-to-long term solution. But to lessen the immediate negative impact on the people, it will be an urgent imperative to devise and implement short-term fixes to the current problem.
The Local Currency And Its Depreciation:
President Weah reminded Liberians that since 2016 the Liberian dollar has been on a consistent depreciating trend, while prices have been on an upward trend.
He said by December 2017, the Liberian Dollar had depreciated by 25 percent saying “Since January 2018, it has depreciated further by another 25 percent.”
“This recent depreciation in the value of the Liberian Dollar has increased, inflation by 4 percentage points to 21 percent, from 17 percent back in February 2018. I am fully aware of the negative impact of the declining exchange rate on the economic well-being of the Liberian people, and the serious hardship that this is beginning to cause.
“Let me assure you, that government has resolved to take the necessary and urgent measures to address the situation. While the fall in the prices of our traditional exports and the UNMIL drawdown have contributed significantly to this situation, we believe a stronger and more aggressive enforcement of monetary policy, along with the relevant fiscal instruments, should go a long way to partly address the problem. I am advised that the short-term measure that could have the most immediate and positive impact is the aggressive enforcement of existing monetary policy,” he added.
He further indicated that within few weeks, several measures will be taken through the Economic Management Team, and in close collaboration with the Central Bank of Liberia.
According to the Liberian leader, the team will announce a series of monetary and fiscal measures that they believe will help reverse the decline in the value of the Liberian Dollar.
These measures he said will include, but not be limited to: an immediate infusion by the Central Bank of Twenty-Five Million United States Dollars into the economy to mop up the excess liquidity of Liberian dollars. A mandate to the Central Bank to provide more effective supervision and regulation of money-changers or foreign exchange bureau. A mandate to the Central Bank to provide more robust oversight of banks under its supervision and to Conduct a comprehensive review of regulations on the hoarding of both Liberian dollars and U.S. dollars outside the banking system and provide incentives and safeguards to encourage the utilization of the banking system, including financial instruments.
“The above measures and many more currently being considered, are critical steps toward the goal of arresting the rapid deterioration of the Liberian dollar. However, the ultimate solution for strengthening the Liberian dollar is to ensure domestic economic competitiveness and the existence of a strong private sector that is oriented towards domestic consumption, import substitution, and export. This is a goal we seek to achieve in the Pro-Poor Agenda for Prosperity and Development. The road to this transformation will be long, and sometimes difficult, and so we ask our people for patience.
“We fully understand the urgency and critical nature of the situation, and we are fully focused in trying to solve these problems, some of which have existed for many decades. Let us all work together to lift our people out of poverty. We will confront the challenges that have defied us for generations, with strong resolve, and together, we will overcome them, and move on to achieving even greater things for all Liberians,” he concluded.