When CBL And Finance Are At Variance: What Should One Expect?
In the Liberian society, it is often said that “in every rumor there might be some truth in it.” For some times, there have been rumors of a cat-and-mouse relationship between the Minister of Finance, Amara Konneh and the Governor of the Central Bank of Liberia (CBL), Dr. Joseph Mills Jones, on the issue of the country’s fiscal and monetary matters. Frankly, I have been one person who never believes this rumor because of the crucial nature of the two institutions in the viability of the country’s economy.
All of these times with this kind of rumors, I had never imagined that the heads of these two institutions would not work together for the good of the country and its people. I have been doubting this because they are some of the officials of government that I hold in high esteem and do not expect that they would stoop too low to allow such an unhealthy relationship to exist between them, considering what their institutions are expected to do in the country’s post-war recovery program. It was because of this, whenever I heard about this lack of cooperation or poor working relationship between the two, I accepted it with misgiving.
In all fairness, it was only on Wednesday, when I heard it from the President in her address to the nation on the Liberian economy that I now realized that this saying of ‘some truth’ in rumor is true, as she spoke of the lack of cooperation between these two fulcrums of the Liberian economy.
Obviously, there is no way the President can speak on the economy, without mentioning the names of the two institutions which are pivotal in the running of any government, as it is said that the fiscal and monetary policies are those measures that are used by any government to manage their economies. Therefore, it is logical to deduce that she cannot speak of the economy without saying something about the CBL, which handles government’s monetary policy and the Finance Ministry which handles government’s fiscal policy.
As it is common knowledge, the fiscal policy which for short, deals with government’s revenue generation and spending, which is handled by the Ministry of Finance, while the monetary policy, which simply to guard against inflation and also to expand or contract the country’s monetary supply, based on prevailing situation. How be it, this article is not intended to open an economic classroom, but to look at the lack of cooperation and its consequences to the nation’s economy.
Making reference to the two institutions in her address, the Liberian leader said, “moreover, although core targets have been met, decline in the level of anticipated revenues on account of procurement fraud and corruption have combined to delay the payment of government’s financial commitment which, in the absence of full cooperation between the Ministry of Finance and the Central Bank of Liberia, has created stress in the banking system and the depreciation in the exchange rate.
She went on; “You have repeatedly heard and are right to be concerned about shortfalls in the budget. This is a result of a number of factors. Firstly, we are still learning the details of managing a Medium Term Expenditure Framework Budget which is important to securing and protecting important public sector investments such as roads and energy over a three-year period.”
Although the President did not mention the names of the heads of the two institutions, it is logical to deduce that this absence of full cooperation between these two institutions is basically between their heads, as it is said in Liberia that “the fish gets rotten from the head.” Unarguably, if the two heads see eye-to-eye, there is no way that such a lack of cooperation would exist, thereby, undermining government’s recovery efforts.
As stated earlier, government uses the monetary and fiscal policies to manage the economy, meaning that to be able to resolve whatever problem that crops up in the economy, these two institutions charged with this responsibility, should be able to brainstorm or deliberate on possible solutions whatever problem that might come out. And so when there is no cooperation between the two institutions in managing the economy, there are reasons for concern, especially in this country struggling to recover after years of backwardness.
It is not a hyperbole that in recent times, the country’s economy continues to experience serious problems, especially with the issue of budget shortfall and the depreciation of the Liberian dollar to that of the United States Dollar, being fully aware of the duality of our currency. This has heightened the hardship faced by the ordinary citizens, as inflation continues to affect the purchasing power.
Today, what is said to be existing between the two institutions in the executive branch of the government, is not really strange because even as it relates to the three branches of government, there are people in government who do not under the “UNITARY” nature of the government, as they function or exhibit attitudes as if they are not part of the same institution- the government.
The constitution of this country makes it succinctly clear that there are three distinctly branches of government- the executive, legislative and judiciary. But the very constitution makes it clear too that while these three are separate; they have to ‘coordinate’ to ensure the smooth running of the status quo.
The provision in Article Three of the Liberian Constitution states:”Liberia is a Unitary Sovereign State divided into counties for administrative purposes. The form of government is Republican with three separate coordinate branches: The Legislature, the Executive and the Judiciary. Consistent with the principles of Separation of powers and checks and balances, no person holding office in one of these branches shall hold office in or exercise any of the powers assigned to either of the other two branches except as otherwise provided in this Constitution; and no person holding office in one of the said branches shall serve on any autonomous public agency.”
Despite this aspect of the Constitution that speaks of “three separate coordinate branches,” it appears that it is not understood, as some officials are functioning as enemies. Once those in government, no matter the branch one finds himself or herself in, do not work as a team, we are doomed to fail. As for Finance and the CBL, the nation stands to face more hardship and uncertainty once there exists lack of cooperation between these two that handle fiscal and monetary matters.
Until my junior brother Amara and my Sinoe man, Joe, see reason, in the interest of the people and nation to work together for economic growth and development, I Rest My Case.