President Ellen Johnson Sirleaf on Wednesday, May 21, submitted the draft national budget of US$557 million to the 53rd National Legislature.
The new austerity budget cuts wastes in government and channels more funds to infrastructure development as set out in the Agenda for Transformation.
The budget focuses on investing in key areas, including energy, roads, ports, security, technology, health, education, etc. that have the potential for massive social and economic returns to transform the Liberian economy.
“This draft Budget calls for a period of national sacrifice – a sacrifice that calls for better efficiency in the allocation of available resources – as government combines aggressive revenue generation with careful debt management and scaled up spending in security, energy and the road network,” said President Ellen Johnson in her budget statement issued Wednesday.
The President said the new draft budget also focuses on programs and projects as the regular costs of running ministries and agencies have been cut drastically and savings moved into key public investment programs that will benefit the Liberian people.
The draft budget was developed after several months of consultations and hearings with all spending entities.
A Finance Ministry press release issued here late Wednesday said the Government has also been able to reduce fraud and waste totaling about US$4 million through the clean-up of the payroll by the Civil Service Agency.
The release said the Government has also been able to improve service delivery by increased resource allocation to health, education and security.
The release quotes Finance Minister Amara Konneh as saying that the austerity measures in the budget show the Executive branch’s strict determination to allocate money to more pressing areas.
Minister Konneh said economic growth and development begins with fiscal discipline, and stressed that the draft budget will invest in areas that hold the greatest potential for inclusive economic growth, expansion and development in Liberia.
He also assured that government will track public expenditure aggressively.
“The Ministry of Finance worked closely with the Liberia Revenue Authority, revenue generating sector Ministries, private sector actors and other relevant stakeholders to derive a more realistic revenue envelop for the Fiscal Year 2014/15 draft budget of US$557million considering the level of projected economic activities in the economy.
“The revenue numbers reported in the draft budget are the best estimates to which planned expenditures have been aligned to mitigate the risk of budgetary shortfalls during execution,” the release said.
It said in order to realize the projected revenue, Government will broaden the tax base, strengthen enforcement and eliminate fraud.
This, according to the release, is expected to intensify further as the Liberian Revenue Authority comes on-line on July
Total revenue, including tax, non-tax and budget support grants, amounts to US$529 million. This is four percent higher than the updated projection of US$486 million for total revenues for this fiscal year, but 12 percent below the 2013/14 budget.
“The 2014/15 projection has been made as realistic as possible, to reduce the likelihood of having to repeat disruptive mid-year expenditure cuts. The Government of Liberia has reintroduced contingent revenue lines in order to help manage revenue that is considered uncertain. For example, US$24 million has been classified in dividends from State-Owned Enterprises (SOEs) and US$28 million in borrowing as contingent revenue,” the state added.