Monrovia – In his first nationwide address on the state of the country’s deteriorating economy, President George Manneh Weah, has promised to work closely with the Central Bank of Liberia to infuse US$25 million in the economy.
Report by Lennart Dodoo, ldodoo@frontpageafricaonline.com
The move, he said, is intended to mop up the excess liquidity of Liberian dollars.
According to the President, over the next few weeks, his government through its Economic Management Team which would comprise economic experts both at home, abroad and international partners, and in close consultation with the Central Bank of Liberia will announce series of monetary and fiscal measures that would reverse the decline in the value of the Liberian dollar.
Pres. Weah: “Since 2016 the Liberian dollar has been on a consistent depreciating trend, while prices have been on an upward trend.
“By December 2017, the Liberian Dollar had depreciated by 25 percent. Since January 2018, it has depreciated further by another 25 percent.
“This recent depreciation in the value of the Liberian Dollar has increased, inflation by 4 percentage points to 21 percent, from 17 percent back in February 2018.
“I am fully aware of the negative impact of the declining exchange rate on the economic well-being of the Liberian people, and the serious hardship that this is beginning to cause.”
President Weah blamed the declining state of the country’s economy on the slump in prices of traditional export commodities and the drawdown of the United Nations Mission in Liberia (UNMIL) which he said contributed significantly to the economic decline.
“We believe a stronger and more aggressive enforcement of monetary policy, along with the relevant fiscal instruments, should go a long way to partly address the problem,” he said.
As part of an immediate term strategy to resuscitate the economy, Pres. Weah said, there would be an aggressive enforcement of existing monetary policy.
“It is clear that our monetary policy regime over the past several years has been too lax,” he said, adding, “In fact, it could well be said that we do not have the capability to exert effective control over our monetary policy, since more than 90 percent of the money supply is held out of the banking system.”
He disclosed that there would be a mandate to the Central Bank to provide more effective supervision and regulation of money-changers or foreign exchange bureau.
The Central Bank would also provide more robust oversight of banks under its supervision and at the same time, conduct a comprehensive review of regulations on the hoarding of Liberian dollars and U.S. Dollars outside the banking system, and provide incentives and safeguards to encourage the utilization of the banking system.
He mentioned the need to ensure domestic competitiveness and the existence of a strong private sector that would be oriented towards domestic consumption, import substitution and export.
“This is a goal we seek to achieve in the Pro-Poor Agenda for Prosperity and Development,” he said.
Pres. Weah further disclosed that his government would embark on a major push to ensure that Liberia becomes competitive in terms of domestic production.
This, he said is a part of a medium-term strategy to empower Liberian businesses to lead the transformation of the country’s economy.
Pres. Weah: “We will enable them to become more competitive, by providing affirmative policies and support, including ready access to finance and expertise.
“The aim and intention of this approach is to encourage import substitution and manufacturing for export, as well as sustainable wealth and job creation.”
