The Government of Liberia has spent nearly US$15 million out of the US$25 million economic stimulus package announced about three months ago by President George Manneh Weah, according to Finance and Development Planning Minister Samuel D. Tweah.
It was clocking seven months after his inauguration as President of Liberia when the Weah-led regime began to witness a tough economic situation ignited by depreciation of the Liberian currency against the United States dollar.
This eventually led President Weah to the pronouncement of a US$25 million economic stimulus package to mop up the excess liquidity of Liberian dollars.
The free-fall of the Liberian currency coupled with attending exogenous economic factors, which lashed at the infant regime of President Weah, obviously became a menace to tackle, leading the Liberian leader to vow in July that his government will endeavor to proffer enduring solutions through the Economic Management Team (EMT) and in consultation with the Central Bank of Liberia (CBL).
Since the government began the battle to stabilize the exchange rate, a total of about US$15 million have been injected into the economy, said Tweah, who spoke on State-run radio on Tuesday, disclosing that the government has since been able to stabilize the exchange rate in the neighborhood of L$152 to US$1.
This disclosure by Tweah refutes some media reports that the government through the EMT and the CBL have already infused the US$25 million into the nation’s economy with no resultant impact, although the current buying and selling rate is far better than what it was prior to the government’s intervention.
Amidst earnest strides by the government to overturn the challenging economic ordeal, Tweah averred that a lot of work and consultations have been happening in the microeconomic space of Liberia, specifically with the observation of the fiscal space so as to address the volatility.
Believing that the most noticeable complication of the nation’s economic woes as observed by the public is the decline in the Liberian dollar, Tweah maintained that this has a “pass-through impact” on prices and that the condition has a direct effect on the economy because it makes goods and services expensive.
Alluding to how the government is infusing the money into the economy, Tweah said, “We have been able to stabilize the exchange rate from L$163 to L$152. The way it normally works is that the CBL has normal option prices where they give importers and people who are demanding foreign exchange United States dollars and they surrender their Liberian dollars.”
Tweah explained that because of the rapid way in which the exchange rate was rising, the government elected not to use the normal commercial process as the goal of the president’s mandate was to extract the Liberian dollars directly from the market and not to take the Liberian dollars that are in the banks.
Although this method being used by the EMT and CBL to clean up the excess Liberian dollar from the market was termed as a violation by some government critics, the Finance Minister is of the opinion that it is best not to continue to use one method that failed to yield good result in solving the same problem.
The infusion of the US$25 million into the economy is a temporary measure, Tweah said, assuring Liberian that the recently launched Pro-Poor Agenda for Prosperity and Development will address in a holistic way the plight of the Liberian people over the next five years.