Did President Weah Pump The 3/23/18 L$374b Into The Economy Without Recording As President Sirleaf Has Claimed In 2016 And 2017?

By J. Yanqui Zaza
Economy Editor

The Perspective
Atlanta, Georgia
October 21, 2018

                  

Two Liberia’s money-documents circulating local media outlets after the “#BRING OUR MONEY BACK” demonstration held on Monday, September 24, 2018, might reveal a troubling problem in Liberia, the failure to record business transactions, thereby making it difficult to audit, investigate and, or prosecute. Let us use an analogy: “Recordkeeping (leading to financial) to a business is the equivalent of the dashboard displaying flight instruments to an airplane pilot.” Or as stated by an expert, it is extremely important to have good accounting, because “…you cannot run a business if you don’t know whether you are being profitable or not. Also, bad record keeping invites fraud. Hence, the record is crucial.”

The first document is a photocopy of L$374 million allegedly received by President George Weah government in March of 2018. Instead of providing records of accounting and, or deposit, Weah’s lieutenants are giving contradicting statements. For example, the Minister of Finance, Mr. Samuel Tweah continues to argue that no money is missing. But, the Minister of Justice, Mr. Musa Dean stated that “…the investigation is not about missing container(s). The investigation is to probe moneys brought into the country to establish whether they were properly received, reported, logged and deposited into the Central Bank’s vault.”

The second set of documents is the authority given by the Legislature in 2016 to print L$5B and in 2017 to print L$10B to replace mitigated notes and address declining economic conditions. The former President Sirleaf, preoccupied with her legacy, is arguing about someone impugning her character and, or is giving unwanted advice such as that the government should “…take time and check the facts, take time and go through the process.” What is needed from former President is for her to assist her successor to obtain records such as copies of the deposit slip(s) of the money printed, and importantly, the value of the money printed to replace the mitigated notes and, or more money CBL pumped into the economy if any.

The accounting entries for replacing the mitigated notes and, or adding more money to the economy would have been transposed onto CBL’s 2016 and 2017 balance sheets as depicted below. However, if numbers and Financial Notes within the 2016 and 2017 audited financial statements do not reflect any information about the L$5b and L$10B, was it due to an error or an official decision to omit such relevant information? If yes, why the omission? Two separate external Audit Firms (PWC) and KPMG examined these records in 2016 and 2017 respectively.

Before reviewing the numbers, I should inform you that CBL, in violation of the Authority of Liberian Legislature, did not disclose any information, including Financial Notes within the audited financial statements to indicate the value of the money printed in 2016 and 2017 respectively.  However, in another document, CBL 2016 mentioned the different kinds of denominations (L$5, L$10, L$20, L$50, L$100, L$500) of money printed, but it did not disclose the amount of mitigated Liberian dollars destroyed and replaced or the amount of money pumped into the economy, if any.

In accordance with International Financial Reporting System (IFRS) and Generally Accepted Accounting Principles (GAAP), CBL included 31Notes within page # 14 through page # 60 and explained each of the items within the balance sheets and income statement, but there was no information about the L$16B. Had CBL made accounting entries to reflect addition money, there would have been an increase in the account of “Cash Deposited with Other Central Banks.” Even if the total money printed was solely for replacing the mitigated notes, an accounting entry and financial notes were required.
Interestingly, CBL pumped more money into the Liberian economy comprising of proceeds from the sale of government securities and the drawdown of government’s accounts. It got combined money of the sale of securities, again not disclosed within the audited financial statements, of L$6.6B in 2016 and L$2.2B in 2017 respectively. (Open Source # 1). Also, CBL withdrew about L$6B (L$12B in 2016 minus L$6B in 2017) from government agencies in 2017 and withdrew another L$3B (L$5B in 2016 minus L$1.5B in 2017) from State-owned entities in 2017 as per the below table. In the same 2017, CBL withdrew L$6B from Cash Deposited with Other Central Banks. (L$23B in 2016 minus L$17B in 2017).  

The decision by Liberian officials to exclude any relevant information about the L$16B, if my observation is right, is more than the act of stealing resources from the country. Therefore, investigators should search for motives for the exclusion and those who are responsible for excluding the proper recording of the L$16B, which the Liberian Legislature authorized.

1. TREASURY BILLS AND TREASURY BONDS SOLD FROM 2014 THROUGH 2018 SCHEDULE (https://www.cbl.org.lr/doc/cblbillsnotesbrochure.pdf

2. CENTRAL BANK OF LIBERIA 2016 ANNUAL REPORT, NOT AUDITED FINANCIAL STATEMENTS (https://www.cbl.org.lr/doc/2016%20Annual%20Report%20for%20website.pdf)

3. CENTRAL BANK OF LIBERIA 2016 AUDITED FINANCIAL STATEMENTS, NOT ANNUAL REPORTS (http://www.cbl.org.lr/doc/f_statement_2016.pdf)

4. CENTRAL BANK OF LIBERIA 2017 ANNUAL REPORT, NOT AUDITED FINANCIAL STATEMENTS (https://www.cbl.org.lr/doc/annualreport_2017.pdf)

6. CENTRAL BANK OF LIBERIA 2017 AUDITED FINANCIAL STATEMENTS, NOT THE ANNUAL REPORT. (https://www.cbl.org.lr/doc/2017%20Financial%20Statements.pdf)