Home Economy From Liberians Oversea: Remittances Hit US$ 531.6m Here

From Liberians Oversea: Remittances Hit US$ 531.6m Here

by News Manager

MONROVIA: President George Manneh Weah has disclosed that Liberia remains one of the major destinations of remittances in Africa.

According to the Liberian President, net personal remittances for eleven-month period (January to November, 2022), including remittances terminated through mobile money wallets, expanded by 31.8% percent to US$531.6 million in Liberia.

Weah pointed out that this is an increase from the US$403.2 million recorded for the corresponding period in 2021. “This is contributing significantly to our national development efforts,” he added.

Addressing the 54th National Legislature on Capitol Hill in Monrovia when delivered his Sixth State of the Nation Address (SONA), the Liberian President lauded Liberians in the Diaspora, “for their support in this direction.”

“We have endeavored to keep our banking system stable and sound as part of our efforts to enhance confidence. During the year under review, the system continued to be capitalized and liquid, with increased lending to the private sector, as well as growth in private deposits,” he indicated.

However, according to President Weah, the rising level of non-performing loans poses the single most important risk to the profitability and overall stability of the banking system.

“In this regard, the government will give full support to the Central Bank in pursuing delinquent borrowers in line with the law and in the interest of the public good.

“For the year 2022, our external sector showed strong performance. Our trade deficit narrowed due to growth in exports, despite the significant rise in our import’s payments, especially for petroleum products. Our current account deficit also improved. Despite the challenges with our current account balance, my Government, through the CBL, has made significant efforts in building Liberia’s international reserves position to over four (4) months of import coverage, largely due to Special Drawing Rights allocation from the International Monetary Funds (IMF),” he revealed.

This target, Weah maintains, exceeds both the ECOWAS reserves threshold of at least three months of import cover, and the target set under the IMF-Extended Credit Facility.

Weah: “This achievement means that Liberia is in a strong position to withstand any potential external shock in protecting the value of the Liberian dollar and promoting macroeconomic stability. I am pleased to inform you that, for the first time in the history of Liberia’s financial system, my Government has established a secondary market to redeem public debts.”

He narrated that the Central Bank of Liberia (CBL), licensed the Liberia Merchant Capital Limited to own and operate a discount house, which will provide additional liquidity to respond to the demand of our economy.

This effort, in addition to the issuance of CBL bills and government’s Treasury bills, will further support the development of the money market and a functioning financial market in Liberia in the medium-term.

“In addition to ensuring that there are adequate banknotes and coins to serve the needs of the economy in both the short and medium-term, my Government is also promoting the National Payments System Program. The digitization of our financial services and transactions is important not only for achieving our financial inclusion agenda, but also enhancing efficiency in our public financial management,” stressed President Weah.

In this regard, he disclosed that the government, through the Central Bank of Liberia (CBL), has secured up to US$7.0 million from the World Bank to finance the upgrading of our National Electronic Payments Switch.

This project will significantly help in promoting inter-operability among the different players in the payments system space, promote regional trade through the Pan-African Payment System infrastructure, and promote effective and transparent public financial management through improved revenue collection and payments for expenditures.

In May 2021, the 54th National Legislature, through a Joint Resolution, and with approval of the President’s Office, authorized the CBL to implement a comprehensive currency reform program.

This mandate called for the full replacement of the then Liberian banknotes and the legacy coins which are assumed to be in circulation, with a new family of banknotes and to introduce new coins.

“As we all know, this is a major national task, critical not only to addressing the perennial problem of shortage of Liberian dollar in the banking system, but also supporting our broader objective of promoting de-dollarization of the Liberian economy over time,” President Weah further told the Nation.

Weah: “I am pleased to commend the efforts of the CBL under the leadership of the Board of Governors and the Management for the achievement thus far. The currency reform project has been proceeding well, and according to plan. Notwithstanding all the many challenges, the CBL has worked with both the printing and minting companies to ensure that the quantities of banknotes and coins planned to be brought into the country in 2022 were all delivered before the end of 2022, adhering to the stipulation of the Joint Resolution of the National Legislature that no new currency shall be brought into the country in the 2023 elections year.”

He disclosed that the total currency brought into the country during 2021 and 2022 was nearly L$34 billion Liberian dollars in banknotes and coins and that this amount represents 71.8% percent of the total L$48.73 billion Liberian dollars that has been approved by the Legislature.

According to President Weah, the consignments brought into the country covered all the denominations, including L$1000, L$500, L$100, L$50 and L$20 for the banknotes and L$10 and L$5 for the coins. The remaining amount of the approved banknotes and coins, representing about 28.2% percent, will be brought into the country in 2024. It is worth noting that as at end-December 2022, the Bank had withdrawn and destroyed a total of L$10.41 billion Liberian dollar legacy banknotes from circulation.

In line with the bank-approved plan, he stressed that the currency exchange exercise is being implemented in a gradual process through the commercial banks.

“The CBL has also informed me that it has also taken measures to decentralize the exchange exercise across the country, through the utilization of its Gbarnga Cash Hub in Bong, and plans to extend to Voinjama and Zwedru; Lofa and Grand Gedeh counties respectively, by the first quarter of this year. In addition, the CBL has reached an agreement with the commercial banks to ensure the exchange of the new currency in all parts of the country.

Meanwhile, the CBL has been engaged with various stakeholders, including the public, to educate and sensitize the population on the currency reform program, the features of the new currency, and the implementation process, the President averred.

These engagements, President Weah added, have helped both in managing public expectations, and in protecting the integrity of the exchange process. While the CBL has not announced a specific time-line for the exchange exercise to be completed, the Bank is optimistic of replacing a significant portion, if not all, of the old banknotes and coins by the end of the first quarter of this year

Weah: As a Government, it is important that we acknowledge the policy advice and technical support of our partners, notably the United States Agency for International Development (USAID) for hiring the services of Kroll, and the IMF, who provided the needed technical assistance to the CBL throughout this process. We want to say to USAID and the IMF that the Government and People of Liberia are grateful to you for your support and assistance.”

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