Where are the missing millions of Liberia?

Liberians are unhappy with the apparent disappearance of public funds – and plan to hold a protest march Friday to demand answers.

Their anger is centered on two scandals:

1. Last year's revelations that Liberian $ 15.5 billion ($ 104 million) in fresh money had disappeared from Liberian ports
2. Mismanagement of an injection of funds of 25 million US dollars in the economy last year.

What happened?

In September 2018, local media reported that shipping containers filled with newly printed Liberian dollars from the Swedish manufacturer of Crane AB banknotes had disappeared from the ports of entry of Liberia between 2016 and 2017.

The Central Bank of Liberia denied these accusations and said the money was stored in safes throughout the city.

Just months before the revelation, President George Weah, who took office in January 2018, announced that the central bank would inject $ 25 million into the economy to replace the old Liberian dollars.

The Liberian dollar is losing value – or depreciating – since July 2017. This has led to higher import costs and inflation, which means that consumer goods have become much more expensive. for the average citizen in the country.

The president's "cleansing" exercise, as he was baptized, took place between July and October of last year. It aimed to reduce the amount of local currency in the economy in order to slow down the depreciation.

However, the exercise raised many concerns and unanswered questions about remittances to Liberia. Two reports were commissioned to review the details. The presidential investigation team (PIT) of the government has completed one. Risk consulting company Kroll, the other.

Both found major flaws in the implementation of government policy in each case, and neither the PIT nor Kroll were able to account for any newly printed Liberian dollars or additional US dollars in the country.

What were the results?

According to Kroll, only 5 billion out of a total of 15.5 billion were printed and distributed in accordance with Liberian legislation. The central bank has not received legislative approval for the rest of the cash, but has signed another contract with Crane, who nonetheless proceeded to the printing and delivery of the l & 39; money in Liberia.

Kroll also found that a surplus of 2.6 billion LL had been printed in addition to what had been leaked initially. The PIT report recorded a similar conclusion.

There is still little information about what happened to this excess, but former Central Bank executive governor Milton Weeks and his former deputy, Charles Sirleaf – both heads of the central bank at the time. the order – were arrested in March. on the recommendation of the PIT.

Mr. Sirleaf, son of former President Ellen Johnson-Sirleaf, and Mr. Weeks are scheduled to appear in court for the opening of the trial in the coming weeks, when they will be called to plead their charges.

Former President Sirleaf said that her son, who had been released from prison with Mr Weeks but banned from leaving the country, had been wrongfully and illegally charged. With respect to US dollars injected into the Liberian economy, each report differs slightly.

According to Kroll, the central bank sold $ 15 million for $ 2.3 billion. This means that US dollars have replaced the old Liberian banknotes in the economy. The PIT report, however, indicated that in addition to the $ 15 million, an additional $ 2 million was sold to the oil and gas company Total.

But the PIT also pointed out that 15 of the companies listed by the central bank as having participated in the "cleansing" exercise have denied any involvement. Eight other companies cited by the central bank were not active at the time of the PIT visit.

So where did all the extra money go?

Euler Bropleh, a Liberian national and founder and managing director of VestedWorld, a private equity firm that invests throughout Africa, said the most likely answer was that she was in the pocket of interested persons. .

This has not been proven yet and remains a speculation at the moment.

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As for the $ 15 to $ 17 million committed as part of the "cleansing" exercise, they may be even harder to calculate. Some of the money has been distributed to a number of companies, but the proper records have not been kept.

Indeed, the distribution of cash "deviated from conventional best practices," according to the PIT. For example, many recordings were written by hand, which could lead to a number of errors.

According to Kroll, this exercise left the country open to "a possible embezzlement of banknotes, money laundering opportunities and the potential execution of transactions with illegal businesses".

In other words, money can never be counted. But that does not stop there.

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The BBC announced that the president had received a letter from nine ambbadadors fearing that his government would take money away from programs funded by foreign donors from the central bank.

The World Bank is also complaining that millions of dollars have been withdrawn from accounts intended for distribution of drinking water or projects such as the Ebola crisis response. Calculating all the missing money in Liberia will require another rigorous audit, requested by the President.

In the meantime, the PIT recommends a demonetisation exercise – the removal of current Liberian dollars from circulation and its replacement by an alternative – in order to reduce illegal activities and stabilize the economy.

What is happening now?

If one of the main goals of Liberia's policymakers was to prevent the currency from losing more value against the dollar, their actions actually had the opposite effect.

Kroll said more than 10 billion LDs had been injected into the Liberian economy without removing older notes. Of this amount, $ 5 million was also injected into the economy with no withdrawal of the local currency.

In fact, Kroll also reported that the old Liberian dollars had been reintroduced into the economy within six months of their withdrawal from circulation.

"Inflation continues to rise and the Liberian economy is in free fall," said Taa Wongbe, executive member of the Alternative National Congress and senior advisor to the leader of the opposition party.

"Regarding the fight against corruption, the needle has not progressed dramatically and we are waiting for changes," he said.

The situation is sobering for the government as Mr Bropleh warned that people will not want to take the risk of investing in Liberia at the moment, so the economy may be struggling further.

The protesters hope that the next audit will allow the president and the government to take action against the decision makers who are still accountable.