The Central Bank of Liberia under current Executive Governor J. Aloysius Tarlue, Jr. is asking lawmakers on Capitol Hill to grant it unilateral authority to print Liberian banknotes and make report to the Legislature after every two years in total contravention of the Act that creates the Bank and the Constitution of Liberia.
Several senators have vehemently objected to the call, including Cllr. Varney Sherman of Grand Cape Mount County and Conmany B. Wesseh of River Gee County, who argued in Plenary this week that the request is an attempt to render the Legislature toothless in the operations of the Bank.
CBL Deputy Governor for Economic Policy, Dr. Musa Dukuly argued that the suggestion to maintain such power is to fast track the process of monitor and control and for the Bank to be up to her game, though he conceded that it is impossible for the Central Bank to print currency without approval of the legislature.
Dr. Dukuly further argued that the aspect of making financial report after every two years outside of the CBL Act does not mean the Bank will act absolutely without input from lawmakers on Capitol Hill. He did not provide convincing explanations.
Part (X) No. 45 of the CBL Act of 1999 under the title “Financial Provisions and Reporting” requires that the financial year of the Central Bank shall commence on January 1 and end on December 31 of the same year.
Article 34 (ii) of the 1986 Constitution of Liberia clearly states, “no monies shall be drawn from the treasure except in consequence of appropriations made by legislative enactment and upon warrant of the President; and no coin shall be minted or national currency issued except by the expressed authority of the Legislature. An annual statement and account of the expenditure of all public monies shall be submitted by the office of the President to the Legislature and published once a year”.
The request to single-handedly print banknotes is coming from the Central Bank when the ‘Bankers’ Bank’ is poised to print L$4 billion for subsequent circulation in the economy.
But Liberians are apprehensive about granting absolute power to the Central Bank to print money when L$15.506 billion printed by the former administration is yet to be properly accounted for amid evidence of excess printing and lack of full disclosure.
The issue came to light after public outcry and pressure that forced the George Weah administration to constitute and probe and subsequently appealed to international partners, including the United States Government to assist with the investigation.
An independent investigation commissioned by USAID thru Kroll Associates, Inc. an American firm, established that the CBL ordered new currency totaling LRD 15.0 billion from Crane AB, an American company in two tranches in 2016 and 2017, respectively.
The Kroll audit established that communications between the CBL and the Legislature indicate there was no clear or consistent strategy driving the process to circulate new banknotes from inception to conclusion thus, raising serious risk of unintended negative economic effects, including high inflation and the rapid depreciation of the LRD.
The report cites that Legislature approval was granted on May 17, 2016 for the CBL to print new banknotes totaling LRD 5.0 billion, but CraneAB was awarded an initial contract on May 6,
2016 by the CBL to print new banknotes totaling LRD 5.0 billion, eleven days before the
Legislature approval was granted. Legislative approval was not granted in the same manner as 2016 for the CBL to print a second tranche of new banknotes totaling LRD 10.0 billion in 2017.
Kroll also notes that Crane AB was awarded the second contract in June 2017 by the CBL to print new banknotes totaling LRD 10.0 billion, four weeks before two officials from the Legislature requested that the CBL replace all legacy banknotes.
According to Kroll, the CBL procured the services of Crane AB for both contracts without adhering to its own internal tendering policies for procurement. The actual value of new banknotes printed by Crane AB to Liberia totaled LRD 15.506 billion, therefore new banknotes totaling LRD 0.506 billion were printed by Crane AB above the initial contractual amount of LRD 15.0 billion.
Former executives and board of governors of the CBL under ex-President Ellen Johnson Sirleaf, including ex-Executive Governor Milton Weeks and his deputy Charles Sirleaf, were charged with multiple crimes, including Economic Sabotage and Money Laundering but were subsequently released by the court.
However, Weeks and the former board of governors are being bragged to court on new charges in a scandal that has left a deep scar on the image of the Central Bank. Story by Jonathan Browne