Central Bank Reacts Defensively to Government’s PIT Report

MONROVIA, Montserrado – The Central Bank of Liberia has reacted to the report submitted by the Presidential Investigation Team on the US$25 million mop-up exercise, which was carried out by the Technical Economic Management Team through the Central Bank.

In a statement issued on Tuesday, the Central Bank appeared to be defending its actions against criticisms that have already surfaced. The Central Bank also revealed additional information that was not included in either the USAID-sponsored investigative report or the government-sponsored one.

Contrary to the US$14 million that the Presidential Investigation Team noted that the Central Bank had used during the exercise, or the US$15 million that the USAID report mentioned, the Central Bank’s clarification statement said US$17 million had been used for the mop-up exercise, including US$15 million from outside the banking system and US$2 million through a major petroleum importers.

“Therefore, the CBL notes that the US$17.0 million used is fully accounted for, and the remaining US$8.0 million is with the CBL,” the statement read.

The Central Bank also sought to make it clear that neither Finance Minister Samuel Tweah nor any member of the Technical Economic Management Team was ever involved with the direct mopping operations. This statement comes amid calls from some members of the public that Tweah and Central Bank executive governor Nathaniel Patray should both be arrested for their roles in the exercise, which both reports have flagged as flawed and deviating from best practice which calls for the use of legitimate banking institutions and licensed foreign exchange bureaus or sale auctions instead of engaging unlicensed foreign exchange bureaus and local businesses.

The Central Bank further explained that even though the economic management team mandated that the mopped-up money be kept out of circulation for one year, demand from the public prompted the entity to release the money back into circulation.

“However, due to complaints from commercial banks and customers during the Christmas season that they could not withdraw Liberian dollars from the banks, the TEMP authorized the CBL to give L$1.3 billion of the sterilized L$2,303,898 billion to the commercial banks to meet the Liberian dollar demand for the Christmas season,” it disclosed. “The CBL gave the money to the commercial banks, and records of these transactions are available.”

The Central Bank emphasized that all monies it mentioned in the statement are fully accounted for and that it would allow any further scrutiny from the government or external actors.

The Central Bank is facing public scrutiny because the government’s investigation established that the teams set up to carry out the mop-up exercise had no standard criteria for the participation of businesses, in terms of legitimacy, such as licenses and legal registrations. Additional, the report said the process created room for illicit exchange or money laundering.

“A review of the report submitted by the six (6) teams responsible for the disbursement/ exchange of the United States dollars with the Liberian dollars show that some foreign exchange bureaus and businesses were not duly registered, while other businesses received cash without proper identification,” the report revealed.

“For example, report submitted by the leader of Team 2, Mr. Kontar Richards, shows that there was no evidence of transactions with business entities, such as business registration document and address of these entities.”

At the same time, the report said businesses mentioned received lesser amounts than what was reported by the Central Bank. The Bank’s statement, however, did not address those allegations.

Given the many breaches of standard operational procedures and discrepancies identified during the process, both the government report and the USAID report recommended further scrutiny on the US$25 million mop-up exercises.

Featured photo by Jefferson Krua

Gbatemah Senah

Gbatemah is a graduate of the University of Liberia and a recipient of the Jonathan P. Hicks Scholarship for Mass Communications. In 2017, Senah won three Press Union of Liberia awards: Women's Rights Reporter of the Year, Legislative Reporter of the Year, and Land Rights Reporter of the Year. In 2018, he was also recognized as the Land Rights Reporter of the Year.

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