A common ground between Finance, Central Bank

One of attracting elements of President Ellen Johnson-Sirleaf’s address to the nation on Wednesday, May 28, 2014, was her acknowledgement of the existing rift between the Ministry of Finance and Central Bank of Liberia. Even though President Sirleaf attributed the dwindling shape of the current Liberian economy to the decline in the level of anticipated revenues, she placed a ‘red mark’ in the absence of full cooperation between the Finance Ministry and CBL for creating stress in the banking system and depreciation in the exchange rate.

While the Liberian Leader may not explained in detail the “absence of full cooperation between the Ministry of Finance and Central Bank of Liberia,” it is an open fact that the relationship between the two national financial institutions has not been cordial for more than two years. A testimony to the above is accusations and counter-accusations which publicly ensued a few months ago between Finance Minister Amara Konneh and Central Bank Executive Governor Mills Jones about the sky-rocketing increase in the exchange rate, especially against the Liberian dollar. In their war of words, Minister Konneh attributed the unfortunate economic situation to the manner in which the CBL was executing its financial policies, including its loan scheme; Governor Jones resisted such blame as “lack of understanding of financial issues on the part of Minister Konneh.”

At the core of this row were the high exchange rate between the United States and Liberian dollars, huge rise in the prices of goods and services and the current hardship being encountered by majority of the Liberian people. Even though the President expressed confidence that the economy remained fundamentally strong and poised to achieve the potentials her administration has identified, further explanation is needed to actually understand how such confidence would manifest in recovery when the two most important national financial institutions are at loggerheads for reasons best known to them to the detriment of the administration and people they serve.

We wholeheartedly do go along with the President that the administration was ‘undertaking bolder and tougher measures to continue streamlining priorities to reduce wasteful spending create additional savings and increase revenues. The need to provide in-depth clarity on these measures and how they positively impact the price system, exchange rate and general welfare of the citizenry cannot be over-emphasized.

The success of any administration is about teamwork, and that the possibility for growth and development of a ‘house divided within itself’ is always slime– and that’s the unfortunate situation currently being experienced by our nation today as the direct result of the row between the Ministry of Finance and Central Bank of Liberia.

In as much as we appreciate the fact that President Ellen Johnson Sirleaf could be bold in identifying the two key regulators of our economy as the problem, it is important and in our national interest that a common ground be found between the Finance Ministry and CBL for the country’s economy to progress; again, if the President could lead such effort, it would definitely serve the nation’s best interest.