Categories
Economy News Opinion

Former Finance Minister, Amara Konneh Gives Suggestions on Fixing the Economy

We’re here to help. Our comments here are directed at him (Mr. Tweah), the entire EMT and the Central Bank Governor. We hope this will be received in good faith and help them do more than just finally admit what Liberian experts have been saying for three years now.So, let’s talk solutions today. We offer six below:

1. ๐ˆ๐๐ž๐ง๐ญ๐ข๐Ÿ๐ฒ ๐ญ๐ก๐ž ๐ซ๐ž๐š๐ฅ ๐ฉ๐ซ๐จ๐›๐ฅ๐ž๐ฆ: ๐†๐Ž๐‹ ๐ฌ๐ญ๐ข๐ฅ๐ฅ ๐๐จ๐ž๐ฌ๐ง’๐ญ ๐ค๐ง๐จ๐ฐ ๐ก๐จ๐ฐ ๐ฆ๐ฎ๐œ๐ก ๐ฅ๐จ๐œ๐š๐ฅ ๐œ๐ฎ๐ซ๐ซ๐ž๐ง๐œ๐ฒ ๐ข๐ฌ ๐ข๐ง ๐œ๐ข๐ซ๐œ๐ฎ๐ฅ๐š๐ญ๐ข๐จ๐ง. Here’s why this matters. The money supply, in Liberia’s unique case, is the total amount of LD and USD inside and outside banks. Our continual challenge is to ensure that the supply of money is equal to our demand for it – what they call equilibrium. When you’re at the bank and you want your LD but they’re telling you “no money,” that means the LD supply is low. This may explain why the LD/USD exchange rate has been dropping of late. When there’s too much LD circulating, the rate goes up. When money is circulating at equilibrium, we don’t have to waste time chasing it. It’s readily available, so the economy tends to accelerate because businesses have easy access to financing. If the money supply is above equilibrium, inflation kicks in. The LD loses its value and so prices go up. The opposite is true if LD is more scarce. But how can we know and control where we are, if we are not sure how much currency is actually out there?

2. ๐ƒ๐ซ๐จ๐ฉ ๐ญ๐ก๐ข๐ฌ ๐Ÿ๐ข๐ฑ๐š๐ญ๐ข๐จ๐ง ๐จ๐ง ๐ญ๐ก๐ž ๐ž๐ฑ๐œ๐ก๐š๐ง๐ ๐ž ๐ซ๐š๐ญ๐ž. This is for GOL and the Liberian people: the FX rate is not our real problem. It is a symptom. If you have cancer and all you do is take pain killers, are you saving your problem?No need for me to elaborate on this one. My former colleague Alieu Fuad Nyei has already published a masterpiece on this subject. You can find it on his Facebook page. Alieu was one of our brightest stars at MFDP. He lives in Liberia. Boakai Jaleiba and many others who I canโ€™t name all in here have also offered sound policy suggestions – all in good faith. It’s time we all expand the basket of voices we listen to, and fill it with real thought leaders who offer solutions, not just partisan rhetoric.

3. ๐ƒ๐ข๐ ๐ข๐ญ๐ข๐ณ๐ž ๐ญ๐ก๐ž ๐ž๐œ๐จ๐ง๐จ๐ฆ๐ฒ – We made major strides, up to 2017, to develop modern payment systems. By the end of UP’s second term, LRA was accepting online tax payments, and businesses were accepting payments with debit cards and mobile money. That trend has only grown, especially with the cash shortage. What has been slow is the MFDP’s digitization of public transactions including a salary payments of about LD$4.9 billion every month. In 2021, we’re still using paper checks, which are expensive to import, and a manual disbursement process. You know why we haven’t made progress? Because digital payment of salaries forces transparency. Trust me when I tell you that they nearly killed a consultant we brought in 2013 through USAIDโ€™s support to digitize the Ministry of Educationโ€™s payroll. The poor guy was so traumatized by this experience that he opted out of the contract and left the country. Now that the office of the Comptroller and Accountant General has been elevated to a department within MFDP, let’s see what they do about that. This doesn’t end with MFDP, though. Digitization requires GOL completing the expansion of the electrical grid across the country and working with LTA and GSM companies to affordably expand network and fiber optic cable coverage. We spent nearly a half of a billion dollars in restoring electricity generation to above pre-war levels and expanded it into rural Liberia for the first time through the cross-border and rural electrification programs. We also invested $25 million in landing a high-speed Internet cable on the beaches behind the BTC Barracks in Monrovia from Europe, under the Atlantic Ocean. Now, let’s expand that too. That way, rural and urban dwellers can use mobile money to transact business from anywhere. Guess what happens when you do that: nobody complains about cash anymore because they don’t need it. This is not a pipe dream. It’s already happening for those who have access to this technology on their bonanza and smart phones. Letโ€™s make sure they work for everyone.

4. ๐ƒ๐ž๐ฏ๐ž๐ฅ๐จ๐ฉ ๐ญ๐ก๐ž ๐œ๐š๐ฉ๐ข๐ญ๐š๐ฅ ๐ฆ๐š๐ซ๐ค๐ž๐ญ – Mr. Samuel Tweah says the Liberian people don’t have confidence in the banking system. Heโ€™s also right about that. Historically (and globally) confidence in banks directly depends on confidence in governments. So I have to lay that wreath at the casket of GOL’s integrity. This government is heavily indebted to the commercial banks and is doing nothing to repay them. Part of that debt is owed in Treasury Bills (T-Bills) which we introduced as a first step towards developing a capital market in Liberia. You need to expand it! T-Bills are certificates government gives to banks in exchange for money. They are short term IOUs or an informal document acknowledging debt. They say “give GOL money today and we’ll pay you back in one year (or less) with interest. We started issuing T-Bills in 2012 when I was Finance Minister and consistently honored them on time. This administration has not followed suit. Thankfully, the CBL Bills (same arrangement) are repaid on time. But GOL’s poor credit record undermines the CBL’s credibility in the market for public debt instruments.Why does this matter? Because the first thing we use T- Bills and CBL Bills for is monetary policy. When we want to reduce money in circulation, we issue Bills and just hold the LD we get from the market in the vaults at CBL, for a year or less. We call it sterilization. It drives down money supply and increases the LD’s value. See #1 above.Sources tell me that the GOL has stopped issuing T-Bills, so only CBL Bills are available. Commercial banks are the biggest investors, but they also help their depositors participate. How does the CBL make it attractive? By offering competitive interest rates, higher than what banks offer for deposits. It worked for us!While public interest in these instruments is growing, most Liberians are wary of putting their cash into a system that won’t give it back when they need it. Between liquidity squeezes and GOL’s debt management problems, it’s just too risky. GOL cannot afford to keep kicking this problem down the road. It needs to expand the investor base to include ordinary people with the capacity and willingness to invest. The more Liberians trust GOL and buy its debt instruments, the more LD comes into the baking system. Then we’ll have a more accurate count of how much money we have in the system. This is why the mop-up policy and the additional LD$4 billion the CBL printed didnโ€™t solve the problem.

5. ๐‚๐๐‹’๐ฌ ๐“๐š๐ซ๐ฅ๐ฎ๐ž ๐ง๐ž๐ž๐๐ฌ ๐ญ๐จ ๐ฌ๐ญ๐ž๐ฉ ๐ฎ๐ฉ – The biggest causes of our economic crisis stem from fiscal policy, not monetary. Minister Tweah has undermined the relatively stable macroeconomic environment he inherited, and now excuses it away by telling perennial “since 1847” political tales to appease his boss. So, it’s only fair he’s taking most of the beating for the economic slump. But, the CBL and its Executive Governor Mr. Aloysius Tarlue need to step up too. Monetary policy works best when the public understands what the authorities are doing. In a time when financial inclusion is a global priority, CBL needs to lead the charge in promoting the Liberian people’s financial literacy. The CBL also must drive the public’s paradigm shift from a fixation on cash to a focus on digital transactions. This will help eliminate this cyclical liquidity squeeze we have every July and December, our peak economic seasons.

6. ๐“๐ซ๐ž๐š๐ญ ๐ฉ๐จ๐จ๐ซ ๐ฉ๐จ๐ฅ๐ข๐ญ๐ข๐œ๐š๐ฅ ๐ ๐จ๐ฏ๐ž๐ซ๐ง๐š๐ง๐œ๐ž ๐š๐ง๐ ๐ฎ๐ง๐ซ๐ž๐ฌ๐ญ ๐š๐ฌ ๐ž๐œ๐จ๐ง๐จ๐ฆ๐ข๐œ ๐ข๐ฌ๐ฌ๐ฎ๐ž๐ฌ, ๐›๐ž๐œ๐š๐ฎ๐ฌ๐ž ๐ญ๐ก๐ž๐ฒ ๐š๐ซ๐ž – The GOL and we the Liberian people need to ask ourselves this traditional Liberian question: “if house won’t sell us, who will buy us?” When I speak of buyers, I’m not just referring to the many foreign direct investment opportunities we’ve lost, in the last three years because of unnecessary noise, instability, incompetence and corruption. I’m also referring first to domestic investors and consumers who are too smart to invest in such a shaky environment. Take civil servants, for example. Theyโ€™re collectively the biggest s buyers in the economy. When you cut their salaries illegally, just to make room to hire your partisans, they stop spending as much as they used to. If you cut 10% from their paycheck, they’ll spend 30% less. That means, your partisans who are petty traders and used to show up for your (CDC) political rallies at midnight after selling to the civil servants the UP Government paid regularly when you were an opposition party, earn less from what civil servants buy today. This is one of the reasons why youโ€™re losing their support. Itโ€™s that simple!Also, when todayโ€™s opposition candidates and critics face life threatening attacks just because they criticize you, a population traumatized by war (CDCians included) gets emotionally and psychologically triggered and stops spending as much. Better, they think, to save, just in case we have to start running again. And theirs is a sophosticaed assessment of the current situation. This is precisely why some of us stood in the middle of the Liberian political theatre so we could touch everyone much to the disliking of our UP colleagues. We wanted to relax exclusion, a key driver of conflict.Today, some of those we worked with in the opposition in the interest of inclusion and a stable political economy say either they โ€œusedโ€ us or they suspected that we wanted to โ€œbreak upโ€ their parties. Far from the truth. They consider this action a political mistake and vow not to repeat it by including others from the opposition in the governance process. The choice is theirs. Our inclusionary policy helped us to keep the peace for 12 years and therefore, a stable political economy minus Ebola, and for the first time since the tenure of Tubman (1944 – 1971), one living President peacefully transferred power to another living President in two generations, both elected by the Liberian people. Thatโ€™s all that counts. Who โ€œusedโ€ who is immaterial. Political governance is as important as economic governance.We’re not saying all this to trigger distracting and unproductive legislative hearings or to fuel public outcry. All we want is for our government to make progress for our people.So, we will pause our ‘Fact Check’ series until it becomes necessary to correct further distortions. We have series on health, education, security, CDF and SDF, and actual disbursements the Legislative and Judicial branches received between 2006 and 2019. We also have a series of financial, monetary, and external sectors and ‘doing business’ indicators for 2005 to 2020. Truth telling and commitment to transparency can only make our democracy and governance policies work for everyone.

 383 total views

Categories
News Opinion

LIBERIA: DEMOCRACY PUSHED, TESTED, THREATENED, PROVED TO BE RESILIENT, TRUE, & STRONG

Over the past week, members and officials in each county, commonwealth, and district, without regard to party or political preference have congratulated their winning candidates.
Last week, members of the various political parties representing their candidates, cast their votes for senatorial candidates of their respective counties.


And once again in Liberia, the rule of law, our Constitution, and the will of the people have prevailed.
Our democracy, pushed, tested, threatened, proved to be resilient, true, and strong.


The 2020 Senatorial Election which occurred last Tuesday, December 8 reflects the fact that even in the face of a public health crisis unlike anything we have experienced in our lifetimes, the people voted.
They voted in record numbers. More Liberians in Montserrado voted this year than have ever voted in any senatorial election in the history of our country. Over 347 thousand Liberians in the mother county were determined to have their voices heard and their votes counted.
At the start of the pandemic crisis, many were wondering how many Liberians would vote at all. But those fears proved to be unfounded.
We saw something very few predicted or even thought possible โ€” one of the biggest senatorial voter turnout in Montserrado ever in the history of the country.


Numbers so big that this election now ranks as the clearest demonstration of the true will of the Liberian people โ€” one of the most amazing demonstrations of civic duty we have ever seen in our country. It should be celebrated, not attacked.


More than 200 thousand of those votes were cast for the opposition candidate in Montserrado.
This too is a record number. One of more votes than any senatorial ticket has received in the history of Liberia.
It represented a winning margin of more than 85,900 votes almost the total number of votes cast for the candidate of the Coalition for Democratic Change.


Altogether, the opposition candidate earned 206,368 votes, well exceeding the 173,502 total votes needed to secure victory.
206,368 votes is more than the number of votes George Weah received in 2014.
At that time, we, CDCians called this senatorial tally a landslide. By our own standards, these numbers represented a clear victory then.
And we respectfully suggest we do so now. If anyone didnโ€™t know it before, they know it now.
What beats deep in the hearts of the Liberian people is this: Democracy.
The right to be heard. To have your vote counted. To choose the leaders of this nation. To govern ourselves.
In Liberia, politicians donโ€™t take power, the people grant power to them.
The flame of democracy was lit in this nation a long time ago. And we now know that nothing, not even a pandemic or an abuse of power, can extinguish that flame.


Time and again, in 2017, when the Coalition for Democratic Change massively defeated the Unity Party, Liberty Party, Alternative National Congress, All Liberian Party, in the first round of the General and Presidential Elections, their lawyers presented their arguments to state officials, state legislatures, and ultimately to the Supreme Court of Liberia.
They were heard by more than 10 judges across the country.
And in every case, no cause or evidence was found to reverse or question or dispute the results.


The fifteen sub-political divisions went to the presidential runoff. All of the counts were confirmed.
And yet none of this stopped baseless claims about the legitimacy of the results. George Weah was announced president.
Even more stunning, in the 2019 representative by-election in District 15, Montserrado, opposition leaders actually signed on to a communication filed by the Collaborating Political Parties. It asked the National Elections Commission to reject the certified vote counts in some polling places in the district.


This legal maneuver was an effort by CPP officials to try to get the Supreme Court of Liberia to wipe out the votes of more than one thousand Liberians in the district and to hand the representative seat to Telia Urey, a CPP candidate who lost the district, lost the popular trust of the people, and lost each and every one of the communities whose votes they were trying to reverse.


Itโ€™s a position so extreme we have never seen it before. A position that refused to respect the will of the people, refused to respect the rule of law, and refused to honor our Constitution.
Respecting the will of the people is at the heart of our democracy โ€” even when we find those results hard to accept.
But that is the obligation of those who have taken a sworn duty to uphold our Constitution.


Six years ago, as a credible institution in Liberia, it was the National Elections Commissionโ€™s responsibility to announce the tally of the votes that elected George Weah as Senator of Montserrado. They did their job.
And we are pleased, but not surprised, that a number of our colleagues in the CDC-led government have acknowledged the results of the senatorial election.
We thank them. We are convinced we can work together for the collective good of the nation.
Now it is time to turn the page as we have done throughout our history. To unite. To progress.
As we said through this campaign, we will be leaders for all Liberians.
We will work just as hard for those of you who didnโ€™t vote for CDC, as we will for those who did. There is urgent work in front of us all.


Getting the pandemic under control and getting the nation victorious against this virus.
Delivering immediate economic help so badly needed by so many Liberians who are hurting today, and then building our economy back better than ever.
In doing so, we need to work together, give each other a chance, and lower the temperature.


And most of all, we need to stand in solidarity as fellow Liberians. To see each other, our pains, our struggles, our hopes, our dreams. We are a great nation. We are a good people. We may come from different places and hold different beliefs, but we share a love for this country. A belief in its limitless possibilities.


And so, as we start the hard work to be done, may this moment give us the strength to rebuild this house of ours upon a rock that can never be washed away.
And as in the Prayer of St. Francis, for where there is discord, union; where there is doubt, faith, where there is darkness, light.
This is who we are as a nation. This is the Liberia we love. And that is the Liberia we will be. May God bless Liberia and its citizenry.
May God protect our nation and people and all those who stand watch over our democracy.

 188 total views