Guest Commentary: Currency Localization – A Challenge For Liberia

By Jefferson G. Togba |

Mr. Jefferson G. Togba

Many historical writers agreed with me that Liberia as a nation have always used the United States dollars parallel to the Liberian dollars with equal value. After more than fifteen decades, the parallelism of the United States dollars to Liberian dollars are not the same after the civil war. Since the early1990s to date, the local currency has been too weak against the most powerful world’s currency once equally operated alongside.

Today the case is different. The economy has worsened. The government can no longer determine the exchange rate and the sales of goods and services under any political leader and governance since the civil upheaval. The economy struggles to grow while people find it difficult to survive daily.

It’s so ridiculous that the local currency has no significant value. Don’t get me wrong. The problem is not with any specific regime. The local currency has significantly been devalued since 1990s to present. Certainly, it will deeply decline further if nothing is done. At the moment, Liberia is the only country in the sub-region that has no regard for its legal tender notes.

In many ways, major stakeholders, owners of businesses and households prefer the United States dollars than the Local currency for transaction purposes. Policy pronouncements are brilliant for the regime when citizens benefit. Interestingly, the government of Liberia wants to pay out 100 percent remittances in Liberian dollars instead of its 25 percent Liberian dollars and 75 percent United States dollars, a regulation introduced few years ago by Madam Sirleaf administration.

It does sound excellent but not workable, for the mere fact that everything is sold in United States dollars. Why should the people receive their remittances in Liberian dollars when they can’t buy in the receiving currency? Has the government regulations and policy consider all purchases be transacted in the local currency?

The government must prioritize the purchases of goods and services in Liberian dollars. Taking the United States dollars from the local market will then be of less concern to the public. You cannot give them the local currency when it doesn’t have any purchasing power. It’s like promising a child an Aeroplan when you can’t afford bicycle or a car. Pay your salaries, allowances and per diems in Local currency then giving same to those who managed and live on gifts will be absolutely no problem.

Now the diasporas expressed and intended decisions` are largely negative for their relatives. In some instances, government would be affected but not compared to their families who are severely suffering the economic pinch in Liberia.

The proposal to pay all remittances in Liberian dollars must be welcomed as it’s entirely done across the continent. Stakeholders and diasporas groups MUST demand that remittances in Liberian dollars equal purchases in Local currency as well. Getting Liberian dollars indicate buying and selling in the local currency. This adds strength then cutting families supports.

People shouldn’t get their monies in Liberian dollars while they struggle to spend their money. Does government know that More businesses require extra if not additional rates when buying in local currency.  Where does government think citizens get additional burdens imposed by owners of businesses and service providers?

Even in government. Most service fees are charged in United States dollars over its national currency. For instance, the nation’s passport and National Identification Card are obtained in United States dollars.  The questions are, how do citizens accept Liberian dollars when they cannot easily use it to transact?

Recently, the National Elections Commission requested $5.00 for voters Identification Card replacement until the National government stepped in to underwrite the cost.

Traditional/customary and statutory marriages and divorce certificates are charged in United States dollars. Do you really need the local currency when the currency can’t fully serve you? We seek to hold national government accountable and responsible in its duties execution especially when making policy. In most cases if not all, government policies are to improve living standards and not to worsen the lives of citizens as it’s already in Liberia.

We know that policies are meant to consider the economic booms and effects when implemented. You can’t have government approved exchanged rate at commercial banks at a stable rate while licensed forex bureaus have different and absolutely higher rates than what is approved. How do government implement currency localization when there is no control?

It’s a shame to make policy without investigation. We still feel the wrong and negative impact of the Ministry of Finance and Development Planning Minister selfish MOP (up twenty-five million embezzlement tactics) used outside of banking structure and systems. This is still fresh in the people’s minds. Make policies to enhance economic prosperity than harm.

It’s advisable to scale down licensing to Forex Bureaus around the country and use the commercial banks to stabilize the exchange rate and do international trades. Our neighbors Sierra Leone, Guinea, Cote I’voire, Ghana and of course big brother Africa-Nigeria use the banking sector and forex exchange bureaus to act strictly in compliance to government regulations. We think Liberian government hast to set standards too. Let’s do Liberia right.

About The Author:

Jefferson G. Togba is a Former lecturer at the United Methodist University; he holds Master of Arts degree in Diplomacy, Law & Business.

He also read extensively on international Affairs with emphasis on International Political Economy at the Jindal School of international Affairs at the O.P. Jindal Global University in India. He also served as conference panelist during the India-Africa Corporation held in New Delhi in 2014; and he graduated with bachelor degree in Business Administration at the AME Zion University, Liberia

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