“We’ve Removed CBL from TEMT,” President Weah Reports Efforts Making Central Bank More Independent

Monday, 27th January 2020
Dr. George Manneh Weah
Dr. George Manneh Weah
Photo Credit: Executive Mansion

(Monrovia, Liberia):The President of the Republic, Dr. George Manneh Weah has announced yet another radical measure aimed at addressing the country’s monetary quagmire much of which comes from low public confidence in the country’s central bank. 

 

In addition to the full restructuring of the Central Bank of Liberia and efforts to digitize the Liberian economy, the President has announced the withdrawal of the Bank from Government’s Technical Economic Management Team (TEMT).

 

Delivering his State of the Nation Address to the National Legislature Monday, January 27, the Liberian Leader said this will make the Central Bank of Liberia more effective in its operations, without further interference.

 

“The TEMT will hereafter discuss all but fiscal policy issues, leaving monetary policy fully to the Board and Management of the Central Bank of Liberia,” President Weah asserted, further imploring the Legislature that “The CBL Act has also been revised and submitted to your August Body for your favorable consideration and passage into law.”

 

President Weah said the action was intended to strengthen the operational independence of the Bank and reinforce its newly developed monetary policy framework aimed at promoting price stability.

 

He assured Liberians of an improved monetary condition in 2020 and beyond, aimed at promoting a stable macroeconomic environment.

 

“My Government will remain committed to non-borrowing from the CBL and non-interference in its operations as an assurance of the operational independence of the Bank,” the Chief Executive stated further. “It will work with relevant partners, including the IMF, to strengthen the financial sector by strengthening the operations of commercial banks, and fast-tracking the digitization of our economy in order to make access to finance easy.”

 

He announced that large stock of public debt places limits on the government’s ability to borrow to finance new investments, but emphasized that the government was also committed to keeping our non-concessional borrowing within limits under the IMF-supported program and are working towards Public-Private financing arrangements to ease the burden on public debt.

 

“With these foundations in place, we see no reason why the year 2020 cannot see positive growth,” President Weah said.

 

“We will work with determination, vigor, and focus, to stabilize the macroeconomy, reduce inflation and put Liberians to work in agriculture and other key sectors.”

 

 

The President submitted that the year 2019 was marked by global economic uncertainty, and recovery in global economic momentum remained slow, largely due to trade and geopolitical tensions, as well as country specific effects. These constraints adversely impacted the performance of our domestic economy.

 

He announced that foreign reserve position of less 3 than months of import cover was not strong enough to support the regular financing of essential imports of goods and services.

 

The President blamed the situation on limited inflows of foreign exchange due to low export earnings, declining aid flows, slow direct foreign investment, and lower-than expected inflows of remittances.

 

He declared: “Consequently, the Liberian dollar has persistently weakened in recent years, stabilizing only briefly during November and December of 2019, due largely to a scarcity of Liberian dollars in the banking system, and weak business activity.” 

 

However, the Liberian leader indicated that the CBL in close consonance with relevant stakeholders took the measures to remedy the situation including the importation of US$20 million from its account at the Federal Reserve Bank of New York to meet the Liberian dollar demand of the commercial banks, promotion of the wider usage of electronic payments such as mobile money and point of sales terminals as alternative means of payment as opposed to cash and temporary suspension of the remittance-split policy to help ease the demand for Liberian dollar from commercial banks.