Liberian Central Bank's Stern Regulations Backfire
Posted October 3, 2003
Plans by the Central Bank of Liberia (CBL) to institute a new policy for the payment of Western Union, Money Gram and other money transfers in the country, seems to have been halted following a hectic late night intervention on Tuesday by a loose but powerful coalition of bankers, businessman and government officials, followed by a widespread public outcry.
According to the plan, published in Vol. IV No.14 of the Liberia official Gazette dated October 1, 2003, and circulated to the banks the day before, money transferred into the country through Western Union, Money Gram and similar means would be paid fifty percent in US dollars and the remaining fifty percent in Liberian dollars equivalent at a rate to be set and published by the CBL.
The CBL would provide the Liberian Dollars for the exchange and the retained portion in US dollars would be turned over to the CBL.
The rationale for the new proposed policy was not explained in the Gazette, nor by CBL officials but most commercial banks are said to have been totally surprised when they received the instructions Tuesday afternoon for implementation the next day, October 1st.
According to sources, although the Gazette quoted the GOL as announcing the new policy, CBL had neither consulted nor informed the government. These same sources said even Finance Minister Charles Bright apparently had no inkling of the change until he saw a copy of the Gazette late Tuesday night, and that it also appears that the Executive Mansion had been kept in the dark.
Yesterday, however, the CBL seemed to have backtracked on its plans when Senate President Pro-tempore , Thomas Woewiyu was quoted as saying that CBL Deputy Governor Sandie Cooper had told him that the plan was only being discussed in-house and had further assured him that it would not be implemented.
Bankers, businessmen and others who spoke with this paper said they found it hard to find any rationale for what would have undoubtedly been an unpopular move without any public education especially at such a critical time.
Others speculated that it probably represented a desperate move by the CBL to gain access to foreign exchange at the expense of the banks and citizens who receive remittances from their relations abroad, principally in the United States.
Although the exact total is not known, money transfers through Western Union, Money Gram and other entities have played a vital role in the nation’s economy in recent years. They are said to be in excess of US$20 million and even might exceed the proceeds of the Maritime program.
Up to press time yesterday, the CBL was yet to issue a formal statement on the matter, or to clarify, as represented by Senator Woewiyu, how an "in-house" matter ended up being published as an official Gazette.
However, unconfirmed reports late yesterday, said that the CBL had instructed banks to put a hold on the implementation of the new regulation until further notice.
Meanwhile, the president pro tempore of the Liberian senate, Grand Bassa County Senator Thomas Woewiyou says the financial laws of Liberia are still in-tact.
Clarifying rumors filtering in the media, that the Western Union will effect a change in money received from relatives of Liberians abroad is unacceptable to the Legislature.
Senator Woewuyou said it is unlawful for anyone to promulgate new financial law in the country without notifying the Legislature.
The pro tempore said those involved with money exchange or finance must not create new policies rather they must be left to the NTLA.
He said it is a crucial time in the country therefore no one should bring in laws that will play on the Liberian people.
Senator Woewiyou disclosed that the acting governor of the Central Bank of Liberia Sande Cooper when contacted dispelled the rumor and said that at no such time had instruction been given nor taken by the bank.
He said although Mr. Cooper did not deny having knowledge of such change but he (Cooper) said such concept was discussed but was never passed on to the authorities concern.
Meanwhile, Senator Woewuuyou said the Legislature has to make sure that no one pre-empts any notion to enrich themselves adding, "maybe some people have a lot of Liberian dollars stocked up and want to use this means to change it to the United States dollars."
The Senate pro-tempore warning stems from a recent announcement that citizens will be receiving 50% local currency and the balance in foreign currency from the Western Union Money Exchange.