Liberian President George Weah proposed several economic policies and legislative reforms during his 4th State of the Nation Address in Monrovia on Monday, in an effort to address the country’s worsening economic situation.
“The policy of my government was significantly focused on protecting the purchasing power of our low-income population by aggressively fighting inflation, which reduced from about 30 percent in 2019 to about 12 percent in December 2020,” he said.
Weah, citing a challenging year for the Liberian economy, attributed the decline to Covid-19 lockdowns, restrictions on international travel, disruptions in supply chains and international trade among others.
The president pointed to a contraction of the economy in 2020 by three percent in terms of growth, greater than previously estimated by the government.
Weah said that country’s banknote shortage has not been resolved, but he is appealing to the legislature for solutions.
Liberian monetary authorities have printed about 20 billion Liberian dollars over the past four years, but he said more than 90 percent of the cash is held outside the banks.
“The liquidity pressure on the Liberian dollar was aggravated by increasing demand for the local currency,” said Weah.
Amid distrust in the banking sector, Weah is seeking legislative approval to print a new set of banknotes.
“I respectfully call upon you, Honorable Ladies and Gentlemen, to act swiftly to resolve the situation before the next season of high demand for cash,” he said, adding that he wants Liberians to use mobile money for transactions in order to reduce demands for hard currency.
Alarming debt portfolio
Liberia’s total stock of public debt at the end of 2020 amounts to US$1.5 billion, with domestic debt of US$643 million and external debt hitting US$940 million.
“This increase in domestic debt stock is mainly because of the restructuring and consolidation of the government’s debt to the Central Bank of Liberia,” he said.
“It includes US$170 million that was contracted by the previous administration but never included in official debt statistics,” Weah added, taking a swipe at former President Ellen Johnson Sirleaf’s administration.
The Liberian leader described agriculture as a vehicle for economic revival as he called on potential investors to finance development in the sector.
“Everyone must go back to the soil, in order to utilise agriculture as a vital tool for the revitalisation of the economy,” he told lawmakers on Monday, extolling the virtues of Liberian land, labour and climate.
He projects economic growth of 3.2 percent, reiterating forecasts by the International Monetary Fund published in December.
Pro-poor, more in debt
Weah swept to power in 2017, promising to narrow the gap between the poor and the rich through his government’s Pro-Poor Agenda for Prosperity and Development (PAPD).
The pledge became the most singular slogan of a president who rose from the slums of Monrovia to the presidency.
However, as the 54-year-old marked the half time of his six-year tenure during his State of the Nation address on 22 January, a number of those underprivileged people who championed his landslide victory are not happy over worsening economic hardship.
Additionally, opposition leaders are angry that Weah made no mention of job creation in his address.
Under the Pro-Poor agenda, the government promised to create one million jobs over a period of five years.
“Instead of a job creation strategy as promised in the PADP, the government has actually implemented a job destruction strategy through his administration’s poor governance, lack of accountability and transparency,” said Alexander Cummings, head of Collaborating Political Parties (CPP), a coalition of opposition parties, who spoke to RFI after Weah’s speech.
CPP supporters Cooper Paasewe and Magnus Nian think the president’s economic policies are not realistic, and will not impact the lives of the poor who brought Weah to the presidency.
“I wouldn’t encourage the printing of new currency until the president and his officials can clearly tell us how the first Liberian$16 billion and the recently printed Liberian $4billion was distributed to the commercial banks,” said Paasewe.
Fellow supporter Nian had anticipated that the president would have outlined measures taken to encourage investors as a means of narrowing the unemployment rate, and was disappointed that he did not address this directly.
“All the government can do is to introduce a stronger monetary policy like reducing the waiting times at banks, improving interest rates for depositors among others to control the money in the economy,” he said.
But Weah loyalists Eben Reeves and Jimmy Wahlo believe the policies outlined are necessary to revive the economy with support from all Liberians.
“The president’s speech is very honest. Stressing the need to revamp the agriculture sector to ensure economic growth is cardinal if we can invest in the sector,” said Reeves.
Hope for turning point
They believe that with a boom in road connectivity, along with the agriculture sector, the economy will once again grow.
Opposition CPP head Cummings does not understand Weah’s justification of the increase of more than US$300 million in debt in just one year.
“When international partners are sponsoring all road construction, our entire Covid-19 response was paid for by the international community; so, what was the money borrowed for?” he said.
The opposition leader admits that Weah cannot be held liable for creating all the problems facing the nation but insists he has reportedly contributed to creating some of the issues.
“The truth is that the road ahead to 2023 will be long and difficult, but I can assure you of the commitment of the CPP to remain engaged on behalf of the Liberian people. Together, we will get through the difficulties,” Cummings concluded.
Liberians now hope that the implementation of the economic policies outlined by the president will be the turning point for economic growth in the country.