A team of forensic financial investigators hired by the Government of the United States of America to unearth the alleged missing LD16 billion and the $25 million, said to have been infused into the economy to strengthen the depreciating local Liberian currency, has finally released its preliminary findings, and from the look of things, the Central Bank of Liberia and the Ministry of Finance have been fingered for allowing major financial discrepancies.
According to the Kroll investigation, discrepancies were discovered at every stage of the process for controlling the movement of banknotes into and out of the Central Bank during the Independent Review, including: the Legislature approval for printing new banknotes; the procurement and contracting of Crane AB; the shipping of new banknotes to Liberia; the delivery of new banknotes to CBL; and, the movement of funds within and out of the CBL vaults.
Kroll’s Independent Review discovered that the CBL ordered new currency totaling LRD 15 billion from Crane Currency in two tranches in 2016 and 2017. “Communications from the CBL and the Legislature indicate that there was no clear or consistent strategy driving the process to circulate new banknotes from inception to conclusion. As a result, this raised the risk of unintended negative economic effects, including high inflation and the rapid depreciation of the LRD,” Kroll stated.
Kroll also noted that although Legislature approval under “Senate Resolution #002” was granted on May 17, 2016 for the CBL to print new banknotes LRD 5 billion, CBL under former Governor Milton Weeks had already awarded an initial contract to Crane Currency on May 6, 2016 to print new banknotes, eleven days before the Legislative approval was granted.
The Independent Reviewers also discovered that for the printing of the second tranche of LRD 10 billion, no Legislative approval was granted as in 2016.
Surprisingly, the CBL at the time procured the services of Crane AB for both printing contracts without adhering to its own internal tendering policies for procurement, the Reviewers noted, disclosing further that the actual value of the new banknotes printed by Crane to Liberia totaled LRD 15.506 billion; meaning Crane printed an excess of LRD 506 million above the initial contractual amount of LRD 15 billion.
The Group also discovered that of the printed LRD 15.506 billion, the CBL had infused LRD 10.146 billion into the Liberian economy without removing from circulation and destroying the equivalent quantity/value of legacy banknotes.
Interestingly, regarding the US$25 million, the Kroll Independent Reviewers stated, “Under the direction of the Minister of Finance, the President’s Economic Management Team conducted a separate USD25 million exercise to “mop up” excess LRD banknotes with USD banknotes. At the time of the Kroll review, this resulted in LRD 2.3 billon (USD 15 million) being purchased by the CBL from local businesses and foreign exchange bureaus, in an attempt to address the depreciation of the Liberian Dollar. This action was taken by the CBL without a clearly documented strategy,” the report noted.
Clearly, the issue of the USD25 million and the method of its infusion has been contentious. Opposition politicians and legislators have incessantly called on Finance Minister Samuel Tweah to provide documentary evidence detailing a list of foreign exchange bureaus that participated in the exercise, but to no avail.
The rather damning Kroll review discovered that independent counts of the physical cash balances in each of the CBL’s three operational vaults could not be reconciled with the CBL’s corresponding financial accounting records.
Financial pundits, having ready the report, are left wondering as to the amount of unreconciled discrepancies between the CBL vault contents and its financial accounting records. People have already started questioning reasons why the Kroll Independent Reviewers decided to redact portion of the Report.
Although the report itself did not make recommendations for punitive actions against anyone, nor did it imply anywhere that LRD16 billion got missing as had been reported in the Media, the Report is however clear about discrepancies and financial missteps in CBL and Ministry of Finance handling of Liberia finances that could portend doom for the economy if left unchecked.
It remains to be seen however what steps President George Weah and his government would take to bring sanity to Liberia’s worsening economic situation by clogging all loopholes that drain the economy.