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Where are the millions?

-As Ellen reports US$517.2M revenues

Questions have abound over the reported 4% increase in revenue as announced by President Ellen Johnson-Sirleaf despite the Ebola crisis that saw a drastic decline in economic activities here.

Many Liberians are beginning to ask where are the millions, suggesting that such increase is yet to impact their lives.

President Ellen Johnson-Sirleaf disclosed that in spite of the numerous challenges faced by the country in 2014 as a result of the outbreak of the Ebola Virus Disease, the Government of Liberia generated total revenues of US$517.2 million, representing 4 percent increase in Tax Revenue and 14 percent increase in Non-Tax Revenue, including US$12.8 million from State owned Enterprises.

Delivering her Annual Message on the State of the Republic before the Liberian Legislature on Monday, 26 January at the Capitol in Monrovia, President Sirleaf said the Liberia Revenue Authority (LRA), solely responsible to collect all government revenues, commenced work on July 1, 2014, the peak of the Ebola outbreak.

The annual event, which is a constitutional requirement, was graced by officials of government, members of the diplomatic Corps, including of representatives of UN Agencies, AU and ECOWAS.

“Our hope is that with better governance, leadership and an incentive structure, our tax Administration will significantly improve revenue performance”, the President said.

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However, she reminded that this will require cooperation and support from government officials and political authorities accepting that just as the state pursues ordinary people and businesses to pay taxes, the same treatment will be extended to officials of all three branches of Government, who should commit to bearing their fair share of the tax burden.

The Liberian leader stressed that this is the only sustainable way to finance the country’s national development and improve service delivery to the citizens.

She said expenditure for the same period totalled US$530.7 million, an increase of 10.6 percent over the previous year, while recurrent expenditure totalled US$363.5 million of which wages and salaries claimed US$206.8 million or 39 percent, and goods and services US$156.7 million or 30 percent, adding, “These two items continue to crowd out the fiscal space required for capital expenditure to expand the economy.”

President Sirleaf said capital expenditure in the Public Sector Investment Plan (PSIP) include US$230 million for the Mount Coffee Hydroelectric plant and US$66 million for three HFO plants and an additional US$200 million directed to the West Africa Power Pool project between Côte d’Ivoire, Liberia, Sierra Leone and Guinea (CLSG) as well as settlement to various contractors for road works.

The Liberian leader noted that loans contracted from external sources totalled approximately US$138.26 million and approximately US$19.95 million from domestic sources, while external debt service was US$8.56 million with domestic debt service totalling approximately US$41.17 million, including settlement of the Central Bank of Liberia’s US$11.8 million overdraft facilities and US$29.37 million for other domestic debts.

She said Government was cautious in contracting debt, and by working with key development partners, a Medium Term Debt Strategy (MTDS) was adopted as an essential tool in accounting for and analyzing the costs and risks associated with borrowing and ensuring a balance with funding needs without compromising debt sustainability.

She said total debt stock increased from US$628.45 million to US$759.46 million, of which US$290 Million is owed to the Central Bank of Liberia, representing 22 percent of GDP.

The Liberian leader told members of the Liberian Legislature that international partners, who she noted, granted significant debt relief,  have viewed as ironic, the country’s inability to convince its own public institutions and private sector entities, who have made significant profits over many years to act similarly by relieving the State of debt incurred many years ago under previous administrations.

“Our development partners have been good friends not only in the fight against Ebola, but in our overall development progress over the past ten years.”

Madam Sirleaf said prior to the Ebola outbreak, between January and June 2014, partners committed a total of US$197.6 million in Official Development Assistance (ODA) to support the Government’s ambitious economic plan, Agenda for Transformation, adding that about two-thirds of that amount was invested in the Economic Transformation Pillar to support important infrastructure.

But disbursements, she said, were significantly reduced during the second half of the year, due to the outbreak.

President Sirleaf said although project activities continued sporadically, attention was shifted from national response to the epidemic, noting that to date, a total of US$244.2 million has been spent on the Ebola response, by Government and international partners – 49.4 percent is being expended by US Government entities, 24.4 percent by United Nations (UN) entities, 13.3 percent by NGOs, and 12.9 percent by the Government.

The Liberian Legislature granted a special spending authority of US$20 million and the flexibility to raise resources to intensify the fight against the outbreak. “We came together like never before to protect, defend and advance the collective interest of our country and people. Nothing has made us more proud than the urgency and unity which was applied to save our country.”

President detailed that under the authorized spending of US$20 million, Government contributed US$9 million to establish Ebola Trust Fund, and US$6 million for the restoration of basic health services for a total of US$15 million.

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