At Budget Hearing: CBL Clarifies US$22.5m Loan Scheme
By Alva M. Wolokolie
At day three of the budget hearing taking place at the Capitol Building, Central Bank of Liberia, Governor Dr. Joseph Mills Jones has clarified to members on the Ways, Means and Finance Committee that the US$22.5m giving out to the private sector is meant to make an intervention to the economy for growth and development.During his presentation yesterday to explain the revenue components of the 2013/2014 draft budget, Dr. Jones said the CBL has not received money from the budget but instead it has contributed US$20m to government during the period under review for developmental purposes.
CBL Jones guided by his financial lieutenants told the committee that the CBL does not pay interest rate on government’s deposit but provides balances to the Ministry of Finance on a daily basis.
Commenting on the breakdown of the amount, Governor Jones disclosed that US$7.5m has been disbursed to agriculture, US$10m to mortgage and US$10m was given out as loan. This in total is US$22.5 made available to the private sector which is considered as the ‘engine of growth”.
When he was asked by the committee to give his source of authority vested in him to disburse thousands of dollars to non financial institutions, Dr. Jones referred the committee members to part 2, count 3, count 4, number 4 and 3 of the CBL Act which authorized him to do so.
With questions being bombarded from sides of the committee members seated right before the eyes of the CBL boss in the Richard R. Tolbert Joint Chambers, Mills Jones indicated that the bank’s intervention in the economy is in compliance with the law.
He said the CBL in its wisdom is doing just what the law says and that anyone who has doubt should be informed that the bank be audited every year by an international firm and such report goes to the President as it is stated by law.
The committee has been concerned about the measures or security put in place to ensure the payment of loans sent out by the CBL because they as lawmakers have that oversight over government agencies to make sure that the Liberian people’s money is used properly.
To answer the curiosity of the lawmakers, Dr. Jones disclosed that the CBL microfinance section has been working with market groupings to establish a credit union because no banking institution can be found in the village or town.
“Yes, there has been system put in place to monitor and ensure that the money is paid back. They have started paying already. We have published the first round of result in the newspaper,” CBL Jones told the lawmakers.
He further said there are people down the line that do not have the ability to contribute to the informal sector, so as per the Act that created the CBL mainly page 8, part 2 which authorizes the CBL to credit, monitor has been the reliance of the initiatives.
“Government does not pay interest on deposit at CBL but benefits from CBL balances. We provide balances to Finance Ministry every day,” he added.
After a long debate followed by questions and answers from both the high table and some members of the public who went to observe the hearing, the committee chair Rep. Emmanuel Nuquay of Margibi County requested the CBL Governor to submit to that committee financial statement of its operation on Monday June 1, 2013. The statement as mandated by the committee should establish whether there was profit made or not during the fiscal year.
Rep. Nuquay on behalf of his colleagues also asked Dr. Jones to present an audit report, a comprehensive report on the US$22.5 m intervention made to the economy, report on the US$30m spent on new offices and report to the committee on the security measures or system put in place to get those monies back.
In response, Dr. Jones accepted the mandate and expressed that he would be happy to do so only if the committee can also accept that certain provisions are prohibited under the CBL Act and the Public Financial Management (PFM) rules.