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Simeon Freeman projects a huge budget shortfall

--Amid Legislature’s US$46,451,000 extra resources discovery 

The opposition warns that there will be an increase in the prices of commodities, leading to a decrease in the capacity of consumer purchasing power, which will drop revenues and most likely cause a budget shortfall. 

By Lincoln G. Peters 

Monrovia, May 16, 2024: Opposition Movement for Progressive Change (MPC) political leader Mr. Simeone Freeman has predicted a huge budget shortfall under President Joseph Nyumah Boakai’s first budget year.

His prediction comes in the wake of the 55th Legislature’s discovery of an additional US$46,451,000 million. 

The Liberian Senate’s plenary unanimously concurred with the House of Representatives recently in passing the 2024 National Budget, totaling S$738,859,827.

The Senate’s passage of the budget included adjustments and the discovery of an additional revenue envelope of US$46,451,000.

In his report before the Senate’s concurrence, the Chairperson of the committee on Ways, Means, Finance and Budget, Bong County Senator Prince K. Moye, disclosed that there was an adjustment made to domestic debt obligations, creating a net fiscal space of US$ 96,101,000.

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According to Chairman Moye, key considerations were given to Social Development, US$15.5 million; security and Rule of Law, US$12.3 million; and infrastructure and Basic Services, US$8.9 million.

Also under consideration were Municipal Government, US$7.4 million; energy and Environment, US$7.1 million; agriculture, US$3.4 million; education, US$3.3 million; and transparency and Accountability, US$1.7 million, including Industry and Commerce, US$1.6 Million, and US$4 million for rehabilitation of disadvantaged youth, respectively. 

Speaking from Lagos, Nigeria, in an interview with journalists on Tuesday, 14 May 2024, Mr. Freeman said that this administration will have a huge budget shortfall.

He predicted the shortfall due to the Legislature’s extra resources identified, which will not be realized, and international trade factors. 

Mr. Freeman pointed out that the Legislature doesn’t have a functional revenue office, which should comprise a team of at least ten financial experts with access to data and information. 

He wondered how, if the Liberia Revenue Authority (LRA), a dedicated institution, could not identify such a huge amount, it did that.  

The MPC political leader lamented that there was no disrespect to the Legislature, but they are not telling the truth and are unrealistic. He said he doesn’t know the Legislature’s method to do that.

He disclosed that lawmakers always identify extra resources, which are never realized for several reasons. 

“The Legislature told Liberians that they could identify additional US$46,451,000  million extra resources in the budget. This was the same thing that happened during the administration of former President Ellen Johnson Sirleaf, and we saw a huge budget shortfall under the administration of [former] Finance Minister Amara Konneh,” he recalled. 

“Also, we saw that under the administration of former President George M. Weah because those resources claimed to have been identified by the Legislature [were] never realized,” he added. 

Mr. Freeman argued that Liberia doesn’t have any budget performance history to demonstrate that when the Legislature says it identifies extra resources, it’s properly allocated and spent.

Rather, Mr. Freeman lamented that it has only led to a budget shortfall in the country, evidenced by the many shortfalls under President Sirleaf’s and Weah’s administrations.

For the fact that the House has a former Finance Minister and others who worked in the financial sector, he argued that it doesn’t mean they have access and information to current data.

“For them to say they have identified extra resources for US$51 million, it’s not true, and the government will not realize it,” Mr. Freeman warned. 

“Let’s see if this government will collect that money. Even with the US$ 692 or 40 borrowed, US$649 will be collected out of the budget, which still doesn’t have [a] guarantee that the money will be collected,” Mr. Freeman argued. 

Explaining his doubt, Mr. Freeman noted that Liberia is an import-dependent economy. Therefore, any movement in the export sector is going to affect Liberia’s economy. 

He disclosed that a current attack on ships in the Indian Ocean is having a great impact on shipments of goods and services to Liberia.

With that, Mr. Freeman stated that there will be an increase in the prices of commodities, which will lead to a decrease in the capacity of consumer purchasing power, leading to a drop in revenue that is most likely to cause a budget shortfall. 

“In that budget, two hundred and thirty more million United States Dollars is anticipated for income and profit while about one hundred million plus for international trade.”

“So, if businesses shut down and they are not selling, if there is a drop in the frequency in the importation of selling, it will affect the budget. And so, do we expect a budget shortfall? Yes, a huge one,” Mr. Freeman argued.

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