– Says Presidential Appointed Team’s Report, But CBL Is Unable to Account for L$2.6bn.
When pundits heard from the Special Presidential team set up to investigate the L$16 billion and later learned on February 28, 2019 that no money was missing or containers of money, they at once wondered then what led to the long haul with the trading of allegations and accusations in several quarters of the society including the government circle featuring former president Ellen Johnson Sirleaf.
Now embracing the latest state-sponsored report the pundits are asking more questions than answers if at all no money did get missing when according to report, extra L$10 billion was printed to be placed in the economy with the believe of drying out the old banknotes in equal amount.
They noted that instead, the equivalent of L$10 billion of the old banknotes were never withdrawn and with additional 10 billion newly printed Liberian dollars infused in the economy adds up to 20 billion old and new Liberian dollars on the market.
However, they pointed out that it then became unthinkable during the Christmas Season; commercial banks had a tough time cashing checks not only due to the shortage of the new banknotes, but even the old Liberian banknotes with the complete posture of total wear and tear, were also in short supply; as many people were turned away under the canopy of no money; while those served were urged to accept the process of rationalization.
The popular question was then where is the new printed money when instead of having surplus which could triggered an infliction, what is being realized portrays massive shortage which again speaks volume; yet no money I missing according to the report.
Touching on discrepancies the report pointed out that given the many discrepancies observed throughout the investigation in relation to the operations of the Central Bank of Liberia in executing is statutory mandate, there is a need to review the standard operational procedures (SOP), banking supervision and internal controls of the central bank of Liberia to curb the possibility of abuse of the money supply of the nation, as well as, enhancing efficiency and productivity.
Accordingly, to further protect currency banknotes in reserve, the Central Bank of Liberia should consider discontinuing the use of the vault at the erstwhile national housing and saving bank down waterside.
At the same time, the report intoned that Crane currency AB of Sweden, contracted by the Central Bank of Liberia in two separate contract to print the total of L$15,000,000,000 (fifteen billion Liberian dollar banknotes) at the total cost of US$15,331,689.20 violated the laws of the Republic of Liberia as follows: knowingly and willfully conspired with officials of the central bank of Liberia o defraud the government of Liberia.
Ignored the terms and conditions of the contract by printing L$18,151,000,000 in complete breached of the contract; and cause the government of Liberia to incur extra cost of US$835,367.72.
Given the many discrepancies noted in the manner in which the mop-up exercise was conducted in relation to the infusion of the US$25 million into the Liberian economy; and the scope, time and financial resource limitations encountered by the PIT-TC, the investigation recommends that the TEMT and the Central Bank of Liberia put a halt to the exercise, and that a forensic investigation of the entire mop-up exercise be conducted without any delay.
It can be recalled that President Ellen Johnson Sirleaf wrote the National Legislature, seeking permission for the Central Bank of Liberia to print additional bank notes.
The CBL under Dr. J. Mills Jones advanced similar request to the Honorable House of Representatives. The communications from the CBL and the President were transferred to relevant committees with a mandate to analyze the request and guide plenary in making informed decisions.
According to the committee report submitted by Chairman Berrian, there were a total of three meetings held to familiarize itself with the issue at hand. Additionally, the committee stated that it conducted series of hearings with relevant stakeholders including the management team of the CBL.
The committee report stated: “During the hearing with the Central Bank, the Committee established that the bank is justified for requesting this authorization. This, in the wisdom of the Joint Committee, will certainly strengthen the reserve position of the bank and capacitate it to respond to the economic needs and demands of government and the general public.”
“The committee also established that the last time the bank undertook similar action was approximately five years ago. It is common knowledge that printed notes are subjected to factors that lead to reduction in their quantity and quality in the circulation. One of such factors is mutilation,” the committee further declared.
(See Letter below)
July 19, 2017
Hon. Milton Weeks
Central Bank of Liberia
Dear Mr. Executive Governor:
We present our compliments and by the Plenaries of Senate and the House of Representatives (IN SESSION) respectively, apprise you that in separate discussions on the declining state of the Liberian Economy, the Legislature has made the following decision to wit:
The Government of Liberia should continue to use the United States Dollars and the Liberian dollars until at such time until the country’s export base has improved significantly;
The Central Bank of Liberia is hereby requested to replace the legacy notes (Liberty) with the newly printed banknotes so that there will be single type of Liberian currency, thus facilitation proper control of the money supply; and
That the Central Bank of Liberia is authorized to introduce coins in lower denominations into the economy to allow fractional transaction which could help to minimize inflation.
In the view of the above, and with the power assigned with the Legislature under Article 35(d) of the Constitution of the Republic of Liberia, this shall constitute your legal and sufficient authority.
Meanwhile, the Legislature would request that you furnish with the appropriate details of the volume and denominations of the replacing banknotes prior to the printing and minting of coins.
Please accept this renewed assurance of our highest consideration and esteem.
Mildred N. Sayon
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