President Weah’s 2022 Budget: $513m Presented In July, $785m In November, Why So?

The Perspective
Atlanta, Georgia
November 26, 2021

President George Weah, through his Minister of Finance and Development Planning (MFPD), Mr. Samuel D. Tweah, presented $785,587,340.00 for the calendar/fiscal year 2022 on 18 November 2021, which is about $272M more than the $513M projected in June 2021 for the fiscal year 2022 as per the revenue component (See Page XIII of Special Budget [July-December 2021]). The MFDP Minister says that the increase in the budget indicates that there are better days ahead for Liberians.
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The Liberian People’s Party (LPP) craves your indulgence here to do some reality checks; let us remind Liberians that experts and ordinary citizens often use and/or manipulate numbers all the time for hidden purposes. For instance, an individual might embellish a self-appraised value of his/her assets to meet certain financial requirements. Some companies on Wall Street and/or other financial markets sometimes erroneously add dividends as part of their regular business receipts to meet revenue targets or they might reduce their liabilities to impress moneylenders.

Former President Ellen Johnson used the “Number Game” during her administration. For example, the country was owing the Central Bank of Liberia $260M by 31 December 2016. Yet, she asserted in 2018 that Liberia had $153M in excess cash reserves. Moreover, her Administration impressed upon the gullible minds that Special Drawing Rights were not debts owed to the International Monetary Fund (IMF), but that such values were money owned by Liberia.

Presumably, to present a rosy revenue outlook, President Weah’s Administration has projected an increase in government revenues by $272 in 2022, less than five months after it previously projected $513M as revenues for 2022. How did the CDC-led Administration compute that amount? It is so obvious that they are using the “Number Game” as was frequently done by their predecessor.

Why do we analyze so and what is their game plan? The CDC-led Administration asserted that it would borrow $145M from foreign creditors in 2022. Unfortunately, it has not provided any explanation as to the basis of the increase from a projected loan of $18M in 2019/20 (See page  XI) or a projected loan of $19M in 2020/21 (See page # XIII). Moreover, it had projected that the government will not borrow money in 2022 and 2023 to finance its programs.

The next “Number Game” was to increase the Nontax revenue by $65M ($148M minus $83M). Did the CDC-led Administration assume that it will generate bonuses and/or more royalties and rents from concessionary agreements in 2022? If not, can the CDC-led Administration provide evidence for the 78% increase ($65m/$83M) in the nontax revenue? LPP did not find any documentary evidence to explain any such increase.

Nontax revenue such as Property income (i.e., income from mining, forestry, agriculture, road funds, or administrative fees.) is predictable and errors can be reduced. Also, the yearly collection is almost on the average, meaning, the increase/decrease might not be so significant.

The use of the” Number Game” does not end at the credit side (revenue), but it is also used on the debit side (expenditure). Item  F, under the caption 1.3 Preface on page v of the 2022 Budget, the CDC-led Administration stated that debt service was projected at $120M, meaning it will use $120M of the $785M to pay creditors (domestic $85M and foreign $35M). However, the Special Budget presented in July of 2021 reported domestic payment to be $32M ($20M-principal and $12M-interest). For foreign debt payment, it was $30M ($23M-principal and $7M-interest). Is the CDC-led Administration indicating that its payment capacity had changed within the last three months?  

Now, what was the benefit of increasing the debt payment from $62M ($32M and $30M)? The higher revenue picture indicates that things will be better because the government has more money to do things. Another item was the $125M appropriated for “Use for Goods and services.”  Again, within the Special Budget of semi-fiscal (July-December 2021), the amount was $42M, $52M for calendar/fiscal year 2022, and USD 65M for calendar/fiscal year 2023.

LPP calls upon the relevant legislative oversight committees to robustly and diligently scrutinize this fiscal Budget of 2022, which the CDC-led Administration boasts about as being a novelty in post-war Liberia lest the economy delves into a tailspin of irreversibility.  The Public Accounts and Expenditures Committee and the Committee on Ways, Means, and Finance of the House of Representatives should thoroughly investigate whether Liberia is poised to collect a windfall of a higher amount of revenues, as Minister Tweah is leading us to believe.

Also, the legislative Committees should question the wisdom of the CDC Economic Management Team to include $80M (i.e., an amount from the IMF called Rapid Credit Facility) as revenue. The “Rapid Credit Facility” is an emergency economic privilege that the IMF gives to a country that is experiencing cash shortfalls, but only after the country presents a request and the IMF approves. So, why did the tax experts include $80M as cash-in-take in 2022 since the cash shortfalls have not occurred as yet? Or, is the CDC Economic Team confirming the inevitability of cash shortfall(s) in 2022?

Given the sudden astronomical jump in the projection of 65% (from $513M projected in June 2021 to $785M being projected in November for the fiscal period 2022), coupled with the lack of evidential basis and inconsistencies emanating from the CDC Economic Team,  LPP urges the Legislature to forensically examine the 2022 Budget before giving its final stamp of approval.

 

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