President Ellen Johnson-Sirleaf, on May 13, 2016, communicates, in a letter, with the Legislature, expressing the desire of the Liberian Government to increase domestic expenditure in Liberian dollar. Constrained to do so, according to Sirleaf’s communication, the payments for all government employees, including cabinet ministers, will be affected by the decision.
One justification provided by the President in her communication was that currently, the level between Liberian Dollars and the US Dollars is 20% to 80% respectively for salaries, Presidential officials and uniform 50% for the general civil service.
She further indicated that by this measure, the government would be increasing the ration of payment made in Liberian Dollars for salaries, goods and services, including payments to contractors and leasors.
The President attributed such economic decision to the sudden increase in the intake of the Liberian dollars, noting that this is also due to the fact that it has become necessary to increase the sale of the United States Dollars to the Central Bank of Liberia to restore their reserves to required target level as agreed with the International Monetary Fund.
“Operating a dual currency regime with the United States and Liberian dollars as legal tenders, fluctuations in the exchange rate greatly affect the prices of basic commodities that are mostly sold in Liberian dollars, but traders have to purchase in United States dollars on foreign markets,” President Sirleaf told Members of the Legislature, further justifying that to compensate for the loss in value in the Liberian dollars when exchanged to United States dollars, traders increase the prices of their commodities, leaving the consumers to feel the pinch.
Even though the latest decision by the government may just be too late, attaching some level of value to the Liberian currency matters most. With the emphasis placed on paying the salaries of all government employees, including cabinet ministers and less emphasis on all commodities, is also very worrisome.
Many had hoped that Madam President, in her communication to the Legislature, would have indicated that all market transactions nation-wide would be Liberian dollars, and that acquisition of the U.S Dollars for foreign transactions would be through the Central Bank of Liberia.
This is where the need for massive public awareness from a community-based approach and radio network across the country to provide a clearer picture of such economic decision for the population cannot be over-emphasized.
Endorsement of the decision by the Liberian Senate and House of Representatives may be smooth, but how well the people understand and adhere to such decision is also a necessity. Moreover, the decision to place emphasis on “all employees of government, including cabinet ministers” may be in reference to only employees of the Executive Branch of Government.
If we should succeed in such economic venture, all employees of government, including cabinet ministers, Members of the Legislature and Justices of the Supreme Court must be affected. We are also of the fervent belief that access to the U.S Dollars by all traders and foreign business people operating in Liberia must be through the CBL – and that must be one of the emphasis of various Committees on Banking and Currency of the Senate and House of Representatives to strike the balance so that there will not be illegal transactions to undermine the Liberian Dollars as it is currently.