News that the two years old Coalition government of President George Manneh Weah has run short of banknotes, leaving commercial banks in Monrovia with no money to meet customers’ demands is not only disappointing but scaring. The Government of Liberia is in an economic squeeze to the extent that it desperately needs money to pay salaries and fund its operations or risks shutdown.
How the new administration reached this grey line in its first 24 months is the question many Liberians and perhaps international partners are seeking answers to. In the first 12 months of the government, financial expenditures of the President himself and many of his key officials, most whom have reneged in publicly declaring their assets raised suspicions of a looming crash in the operations of the state.
Today, the realities are beginning to unfold everywhere both in the public and private sectors, as the economy faces an imminent nose-dive. Employees of various state functionaries, including the Judiciary, the Legislature and even the Executive have not received salaries for the last three months or more.
President Weah formally wrote the Legislature recently, calling lawmakers currently on annual break to report at the Capitol to execute urgent matters of State, including approval for the printing of new Liberian banknotes to enable the government pay salaries.
Ruling Coalition for Democratic Change lawmaker from Montserrado County District#8 Moses Acarous Gray posted recently on facebook printing of new banknotes is a must to enable the administration to pay salary, particularly during these Christmas and New Year holidays when there will be a rush at various commercial banks for cash.
But the government should beware that merely printing banknotes does not immediately heal an economy that has been stifled by corruption, lack of transparency and bad policies. The ruling Coalition should have known that overly staffing or bloating the Civil Service with partisans would have inflated the wage bill hence, the need for sources of funding to accommodate the partisan employees.
In the short run, the printing of new banknotes may bring some level of relief to the government in terms of easing the current pressure brought about by the huge demand for cash. But inflation could even go beyond three digits if other austerity measures, particularly in the monetary sector are not introduced and adhered to.
Unless the government sincerely sees the agriculture sector as one of the potential areas to invest for both cash and food crops, which may lead to self-sufficiency in food and eventually exportation, the economy would continue to stagnate.
New banknotes in themselves would not resuscitate the economy if we don’t swift from being an import-based to an export-based nation. This is important because it helps to generating badly needed foreign exchange.
Besides, the government should weight the economic rationale of spending US$31 million to print 35 billion Liberian banknotes that could become mere papers in the hands of citizens with no value to get essential goods on the shelf.