95% Of Money Out OF Banking System … MFDP Minister Reveals

The Minister of Finance, Development and Planning, Samuel Tweah, has disclosed plans that government is instituting new policy to stimulate Liberians to save their monies in the banking sector- a decision he said, would help government to have control of the monies in the economy. It has been noted that Liberians including foreign entity owners have lost confidence in the banking sector, and as a result, they are keeping their savings outside of the banking system but Minister Tweah assured that the new policy to increase interest rate and guarantee customers’ savings will restore hope to the banking sector.
Minister Tweah asserted that government is taking the move because over 99 percent of the local currency in the economy is out of the banking system- in which he said, is one of the contributing factors leading to the inflow in economy.
Appearing on the State Radio yesterday, November 4, 2019 Talk-show, Minister Tweah described the Liberian Economy as challenging.
He said the support of the IMF Program is geared towards resuscitating economy and to reach IMF’s benchmark. “ I think what we are trying to do with the program is to address the Macro-situation because macro situation has to be stable even when we talk about investment, macro stability sends, is a good signal for investments, “ Tweah said.
Minister Tweah who spoke on variety of national issues said government is exerting efforts to ensure what he called “macro stability”.
He said as part measure in ensuring Macro-stability, government is working not to contribute to inflation.
He said, the new fiscal measure is intended to shun government borrowing from the CBL’s reserve adding, “When government borrows or when government spends beyond its bounds adds to the inflation pressure,”.
According to him, the inflation pressure with large inflows of Liberian dollars into the economy currently confronting this government, began 2017 April immediately when the President took over.
Tweah said, this government with support from IMF has embarked on a new framework to avoid government borrowing from the Central Bank of Liberia as was done five years ago, “Because we have to be using reserve to stabilize the economy,”
“We could have done that five years ago, when our reserve was much stronger, because of UNMIL presence and high commodity prices,” Tweah tickled the audience.
“Today, looking at environment, we cannot borrow from the bank again because the reserve is low. So, we have to move to a framework where we will start using interest rate a framework that we are going to deploy under IMF program,” he said.
Speaking on the fiscal aspect of the government, Tweah intoned further that there are measures taken that conform to IMF’s program. “We need to pass the credible budget – that means, we should spend what we have or, our budget should be closed to our revenues and that has been our problem.”
According to Tweah, without knowing the economic constraint, there are other Liberians craving for more allotments in the Agriculture sector but in actual sense no money.
“There is no way to fund Agriculture now until we have to clean-up through the harmonization scheme because the IMF says, this is the direction that is sending good signals,” Minister Tweah concluded.