Monrovia, Liberia: President George Weah has addressed the nation on the state of the economy and swiftly announced series of measures aimed at remedying the current harsh economic situation fuelled by steep rise in the exchange rate between the Liberian and United States dollars.
Key measures announced by the Liberian leader include:
- An immediate infusion by the Central Bank of Twenty-Five Million United States Dollars into the economy to mop up the excess liquidity of Liberian dollars;
- A mandate to the Central Bank to provide more effective supervision and regulation of money-changers or foreign exchange bureau;
- A mandate to the Central Bank to provide more robust oversight of banks under its supervision;
- Conduct a comprehensive review of regulations on the hoarding of both Liberian dollars and U.S. dollars outside the banking system, and provide incentives and safeguards to encourage the utilization of the banking system, including financial instruments.
The last couple of months have witnessed an unprecedented disturbing hike in the prices of local commodities on the market, resulting to hardship and undermining the government’s Pro-Poor Agenda.
Besides these actions, President Weah told the nation that his government is working to find longstanding solution through its Economic Management Team (EMT) and in close collaboration with the Central Bank of Liberia (CBL).
“The government will announce a series of monetary and fiscal measures that we believe should help reverse the decline in the value of the Liberian dollar,” President Weah declared. He added that the government also intends to engage the minds of the best and the brightest Liberian economists, both at home and abroad and even seek advice and active support from our international partners.
“As a first step in this direction, we have placed emphasis and urgency on the formulation of a comprehensive development strategy that will be supported by a strategic implementation plan. The development strategy, to be known as the Pro-Poor Agenda for Prosperity and Development, is nearing completion, and will very shortly be presented to all stakeholders, including our foreign development partners, the private sector, and the general public, for consultation, input, and buy-in, before being finalized into a strategic implementation plan,” President Weah announced.
President Weah said development strategy and implementation plan will serve as a road-map for the urgent and important next-steps to be taken in giving direction to our economic recovery, and will consist of short-term interventions, medium-term reforms, and long-term restructuring of the Liberian economy.
The Liberian leader said: “I am fully aware that we are faced with a very difficult macroeconomic situation in Liberia. For many decades, we have incurred trade deficits because we import more than we export.”
“We also have an economy based on traditional exports such as iron ore, rubber, coffee, etc., which are shipped to foreign buyers in their raw state, without any value-added propositions which could have also contributed significantly to industrialization and employment.”
“Additionally, the prices and demand for our exports are determined and affected by factors beyond our borders, and are therefore beyond our control. Slumps in demand for the products which utilize our raw materials will always result in externally-generated shocks to our economy.”
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President Weah noted the situation being faced is not totally unique to Liberia as the world as a whole is facing new economic challenges, mentioning the trade wars between the major manufacturing countries could also reduce demand and place downward pressure on the prices of our major exports.
He said finding lasting solutions to the present macroeconomic challenges will take some time, because nothing less than the structural transformation of the Liberian economy will produce sustainable recovery and growth.
President Weah said: “The key to success in this endeavor is for Liberians to produce more goods and services locally, so that we reduce our importation of goods and services from abroad, whilst at the same time increasing our exports and adding value to the raw materials that we ship to the world.”
“In this regard, our Government intends to embark upon a major push to ensure that Liberia becomes more competitive in terms of domestic production. And in so doing, we intend to encourage and empower Liberian businessmen and Liberian-owned businesses to lead the transformation of the Liberian economy.”
“We will enable them to become more competitive, by providing affirmative policies and support, including ready access to finance and expertise. The aim and intention of this approach is to encourage import substitution and manufacturing for export, as well as sustainable wealth and job creation.”
He said it was a medium-to-long term solution, and noted it will be an urgent imperative to devise and implement short-term fixes to the current problem to lessen the immediate negative impact on our people.