Senate’s CBL Hearing- Constitutional or Political?

The micro-loan scheme currently being implemented by the Central Bank of Liberia in support of the Liberia Business Association, market women, as well as other non-financial institutions across the country may discontinue if the Committee on Banking and Currency of the Liberian Senate considers a recent recommendation for the Senate to halt such financial assistance. Senate’s Committee on Banking and Currency  will, this week, report back to plenary after being mandated by Plenary to probe a call by Grand Gedeh County  Senator Alphonso Gaye for a ‘moratorium’ to be placed immediately on the micro-loan scheme being implemented Central Bank of Liberia or CBL.

Sen. Gaye recently requested the Senate’s Plenary to place a halt to the micro-loan scheme, printing of bank notes and minting of coins by the CBL “pending the conclusion of the ongoing  investigation and hearing” currently being conducted by the committee in a communication and read during the 46th day sitting of the second session of that august body.

Gaye also appealed to his fellow Senators to mandate the Committee on Banking and Currency to request from the CBL a report detailing the amount of the loan given out, recipients and their addresses, as well as the interest rate and payback period of the scheme. The committee is also considering the request for the CBL to give account of bank notes printed or coins minted with a detail on the dates, as well as point out the actual amount of bank notes printed or coins imprinted.

The probe is against the backdrop of University of Liberia Professor Wilson K. Tarpeh’s recent assertion that the approach being used to give micro-loans to the Liberia Business Association, market women, as well as non-financial institutions across the country by the Executive Governor of the CBL, Dr. J. Mills Jones was wrong. According to Prof. Tarpeh, the Act establishing the CBL and its institutional practices mandates the bank to lend money only to recognized financial commercial banking institutions, which will in turn loan same to private businesses and individuals for economic growth.

The UL Professor also noted that it was prudent for Governor Jones to have consulted the Liberian Legislature before minting coins and issuing bank notes on the Liberian market because the Legislature had the constitutional authority to mint coins, and authorize issuance of bank notes on the Liberian market, indicating that as good as it  may sound, what the Bank was doing was wrong because the result of fusing money in the economy through individuals and non-recognized well established financial institution  is going to be short term.

While many well-meaning Liberians may be in agreement with the Senate that the ongoing exercise (public hearing) is intended to established whether or not the Governor of the CBL has the authority to give out loans, mint and print bills and coins; and that if he was exercising that authority in keeping with the Act creating the Central Bank, others may also be skeptical about what the Senate has said about the purpose of the hearing.

Considering the fact that the Liberian Senate must be well knowledgeable about Constitution, as well as the Act establishing the CBL, especially the provisions which deal with the issues being handled by the Committee on Banking and Currency, some may even be wondering whether or not a public hearing was necessary on this matter or the Senators needed “a Wilson Tarpeh” to tell them what the CBL Act says.

If and only if the Senators were on top of the mandate of the CBL and its Governor, Dr. J. Mills Jones would not have even attempted on the path on which he chose to thrive in the first place. Probably as the result of circumstances they may not have comprehended, the CBL Governor was allowed the “holidays” has enjoyed for the past five years.

The Senators could be on the right trajectory if their ongoing action against the CBL did not have political motive(s). Owing to the fact that Governor Jones may be harbouring a Presidential ambition in 2017 (probably with the support of President Ellen Johnson-Sirleaf), many of the Senators, including Alphonso Gaye of Grand Gedeh County may have developed the perception that the micro-loan scheme could be a strategy by the CBL Governor to market himself to grass root and people-driven organizations as he’s currently doing. If the foregoing is what Senator Alphonso Gaye et al are pursuing to stop, then, the path on which they are thriving is very dangerous; but if it is sincerely in consonance with the Act creating the Central Bank of Liberia, such move is welcomed.