President Weah Should Explain Why Gov’t Increased By 170% (USD $49M/USD $28M) It Payments To Domestic Creditors

 

The Liberian People’s Party (LPP) calls on President George Weah to explain why the government reduced public spending by 63%, from USD $115M in 2019/20 to USD $42M in 2021, 2022, and 2023; and subsequently increased payments by 170% to domestic creditors in 2021, 2022, and 2023 respectively.

LPP accepts the theory and practice that government can cut allocations for “Use of Goods and Services” and increase payments to creditors. Yet, such a cut should not undermine the smooth operation of government, neither strangulate the economy. The 63% ($115M minus $73M) cuts in “Use of Goods and Services in 2021, 2022, and 2023 as depicted within the Budget will affect both government operations and the economy, LPP predicts.

These cuts are not good because it reduced cash flow of small businesses such as newspapers, office equipment and supplies stores, gasoline stations, restaurants, local farmers, etc. Also, a substantial cut (i.e., 63%) in “Use of Goods and Services”) might not affect the payment of monthly salaries. However, paid employees might not function effectively because office supplies are limited, visitations and inspections of outstations are postponed, meetings with expatriates become difficult, etc.  

HERE IS THE SCHEDULE FROM THE 2019/20, 2020/21, 2021/22 AND 2022/23 BUDGET

If LPP may ask, why did you cut 63% in “Use of Goods and Services” to increase payments by 170% to domestic creditors 170%? For Budget line # 41 ( Domestic creditors), payment increased from USD $28M in 2019/20 to USD $77M  in 2020/21, to USD $77M in 2021/22, and to USD $77M in 2022/23. Who are the domestic creditors? Is the Central Bank of Liberia (CBL),

government-state-owned bank, one of the domestic creditors, as reported under “Total Debt Stock on page # 58 of the CBL 2020 Annual Report? If the 2020 Annual Report is correct, Liberia’s state-owned bank (CBL) owns USD $487M of the total domestic debts of USD $644M. CBL records also indicate that a significant portion of the debts owed to CBL was incurred many years ago. Therefore, LPP does not accept the decision to reduce public spending and use the savings to pay debts owed to Liberia’s state-owned entity (CBL). Conventionally, businesses, households or governments usually borrow money or use money saved from reduction in debt payments to finance programs, etc.

LPP, also, calls on President Weah to explain why the Budgetary documents do not report cash (i.e., proceeds of T-Bills sold to domestic creditors) as sources of funding within 2019/20, 2020/21, 2021/22, 2022/23 respectively. The record of Government, that is page #58 of the 2020 Annual Report of CBL below, indicates that government received USD $10M, USD $65M, and USD $98M  in 2018, 2019 and 2020 respectively. Yet, the budgetary documents do not report cash as sources of funding in 2019, 2020, 2021, 2022 and 2023, with the exception of USD $8.5M reported in 2021.

THE BUDGETARY DOCUMENTS BELOW DID NOT INCLUDE CASH FROM DOMESTIC CREDITORS.

The Liberian People’s Party is pleading with Lawmakers and the Executive Branch to adjust these projections. Our leaders can adjust these projections and reduce any economic pain. Let us remember that rallies and demonstrations become inevitable if government does not repair vehicles for law enforcement departments, does not buy medical supplies, school supplies, equipment for fire department, does not build bridges, etc.

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About Cholo Brooks 16097 Articles
Joel Cholo Brooks is a Liberian journalist who previously worked for several international news outlets including the BBC African Service. He is the CEO of the Global News Network which publishes two local weeklies, The Star and The GNN-Liberia Newspapers. He is a member of the Press Union Of Liberia (PUL) since 1986, and several other international organizations of journalists, and is currently contributing to the South Africa Broadcasting Corporation as Liberia Correspondent.

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