Borrowed $53m in 2019 From Local Banks, Yet President Weah Illegally Used a $28m Road Fund

By J. Yanqui Zaza

President George M. Weah

The Liberian People’s Party (LPP), once again, calls on Liberian Lawmakers to prevent President George Manneh Weah’s Administration from further violating the Liberian 2009 Public Finance Management (PFM) Law, such as the illegal and controversial use of the USD25 Million from the Road Fund in 2019 for unexplained purposes. The General Auditing Commission (GAC) revealed that the Weah Administration used USD25 Million for unexplained purposes in blatant violation of Section 2.2 of the Act establishing the National Road Fund.

This information is revealed in GAC Audit Report for two fiscal periods, 7/1/2018 to 6/30/2020.

In August of 2021, LPP, in its Press Release published in local newspapers, called on President George Weah to explain why the government reduced public spending by 63%, from USD115 Million in 2019/20 to USD42 Million in 2021, 2022, and 2023; and subsequently increased payments by 170% to the State-owned bank, Central Bank of Liberia (CBL) in the four fiscal periods. LPP added that it accepts the theory and practice that government can cut allocations for priority programs such as allocations for “Goods and Services” and increase payments to creditors. Yet, the 63% (USD115Million minus USD73Million) cuts in appropriations for “Goods and Services” in 2021, 2022, and 2023 have affected and will continue to affect both government operations and the economy in general, LPP predicted then and continues to project the same scenario today.

President Weah’s Administration, at the Legislative Hearing concerning the transfer of funds from appropriations for “Goods and Services” to the State-owned bank (CBL), did not provide any reasons until when it appeared on Radio Talk Show to justify the illegal use of the USD25 Million Road Fund.

And the government assertion was that the government was cash-strapped in 2019; therefore, it used the “legally restricted” Road Funds. On Sunday evening, 22 May  2022, on Spoon FM 107.5 Talk Show, the Minister of Finance and Development Planning (MFDP), Mr. Samuel D. Tweah, stated that the government was broke, and so the government used a portion of the Road Funds to finance public expenditure. The FrontpageAfrica Newspaper quoting Mr. Tweah reported that “Tweah noted that it is no secret that 2019 was the toughest year of the Administration of President George Weah…salaries were current in 2018 until the time in 2019…salary arrears were piling up,” and we began “…to look for ways to solve the crisis.”

The budgetary transactions in 2019 do not support the assertions that the government was broke:

President Weah’s Administration received USD65Million from foreign creditors and USD53Million from local commercial banks in 2019. (See page 53 of the 2019 Central Bank of Liberia (CBL) Annual Report).

CBL printed LD4.0Billion additional banknotes, according to page 2 of the 2019 Annual Report of CBL.

The government reported that its revenue surplus increased from USD 22 Million in 2018 to USD42 Million in 2019. (See page 50 of the 2019 CBL Annual Report).

The government’s LD16.5 Billion banknotes (i.e., additional cash owned by the government) were infused into the Liberian Economy, according to U.S. Embassy Press Release published on 28 February 2019.

President Weah’s Administration paid USD35 Million to the Central Bank of Liberia (i.e., state-owned bank) in 2019/2020, evident that the Administration was not cash-strapped as claimed by Minister Tweah (See Page # XVII of the 2019/2020 National Budget).

Donors gave about USD584 Million in 2018/2019 to Liberia, which nongovernmental agencies and some governmental agencies spent on government programs. (See page 9 of the Citizens Guide Budget of 2018/2019 prepared by the MFDP).

The lesson from these different budgetary records indicates that President Weah’s Administration is not following Liberia’s 2009 PFM Law. For instance, President Weah’s Administration borrowed USD53 Million from commercial banks; however, its 2019/2020 budget did not project any borrowing from domestic sources. (See page XI of the 2019/20 National Budget). Moreover, the Administration is regularly defaulting on redeeming Treasury bonds and Treasury Bills, strangulating commercial banks, in violation of the six-month pay-back requirement, according to Section 46(2) of the 1999 CBL Act amended on 20 October 2020.

The Liberian People’s Party was not the only entity that pointed out that President Weah’s Administration blatantly circumvented the 2009 PFM Law. In June of 2021, under the Topic “2021 Fiscal Transparency Report: Liberia, U.S. Treasury Department stated that “…the government did not make its budget documents…publicly available in a reasonable period of time… significant deviations between projected and actual revenues during the review period undercut the reliability of budget information.”

Why transferred USD25 Million from the Road Fund to pay part of the USD37 Million debts owed to the state-owned CBL? Why borrowed USD53 Million from commercial banks to pay USD37 Million debts owed to the state-owned bank, CBL? Why does the government claim to have realized surpluses of USD22 Million in 2018 and USD42 Million in 2019, but argues that it was broke in 2019? In 2020, officials of the Weah Administration were giving different statements about Liberia’s cash position. For instance, while officials of the Finance Ministry argued that the country was broke, other officials at the Liberian Revenue Authority stated Liberia was generating more revenue than projected.

Lawmakers should revisit the 2022 budget and review significant appropriations.

LPP is pleased to resubmit many of the recommendations outlined by U.S. Officials from the Treasury Department reported in June 2021:

LPP calls upon the Liberian Legislature to:

1) Meticulously review National Budgets and demand answers from the Executive Branch;

2) Publish financial statements of state-owned enterprises, including debt and contingent liabilities;

3) Publish off-budget accounts (i.e., money donated by donors and are managed by non-governmental agencies) and ensure that they are subject to adequate audit and oversight;

and 4), Produce and publish any supplemental budget when actual revenues and expenditures do not correspond to those in the lawful budget.

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