Liberia's Weah Faces Protest as Economic Crisis Deepens: Q&A

(Bloomberg) -- Liberian President George Weah is facing widespread discontent over high food and fuel prices and government corruption as his administration struggles to contain a deepening economic crisis.

Opposition supporters took to the streets Friday for the first time since the former AC Milan soccer star won elections 18 months ago. Protesters gathered from 8 a.m. near the presidency and will present their grievances later in the afternoon.

What Are They Protesting About? 

The economy is in bad shape. The International Monetary Fund in March revised its economic growth forecast for the year to 0.4% from an earlier projection of 4.7%. Inflation peaked at 28.5% in December. People are also frustrated about corruption. Weah’s close alliances with controversial figures who played key roles in the country’s devastating 1989-2003 civil war are angering many who believed he’d be different from establishment politicians.  

Wasn’t The Economy Weak Already? 

Liberia’s economy has yet to recover from the double blow of the worst-ever Ebola epidemic and a sharp drop in iron-ore prices that resulted in zero growth between 2014 and 2016. Last year’s withdrawal of the United Nations peacekeeping mission, which at its height had 15,000 troops stationed in the country, didn’t help. But Weah has made some crucial mistakes. A decision to mop up excess Liberian dollars with $25 million of reserves to curb inflation and stabilize the currency achieved the opposite. An investigation showed the central bank used only $17 million for the purpose and can’t account for all of the funds. Weah also exposed himself to criticism through his involvement in the construction of a luxury housing estate and costly renovations of his private homes.

What Are The Concerns of Investors?

Foreign donors are certainly unhappy. Last month, ambassadors from the U.S. to Japan and the European Union warned Weah in a joint letter that “irregular withdrawals” by members of his government from accounts designated for aid projects was damaging donor confidence and could negatively impact assistance to the country. Aid has been crucial to Liberia since the end of the civil war. Donor funds already dropped to 15% of gross domestic product from 20% last year. 

How Serious is This For Weah as a Fairly New Leader?

Since his first bid for the presidency in 2005, Weah, who grew up in a slum in the capital, Monrovia, has had a hard time convincing skeptics he’s capable of managing an economy. He finally got elected in 2017 on promises to fight poverty and wage war on corruption. So far he hasn’t delivered, and he’s seen by many analysts as someone who’s surrounded by bad advisers.

What Can He Do About It?

Weah has ordered an overhaul of the leadership of the central bank, which may go some way toward stabilizing the exchange rate. He’s been urged by the IMF to cut the wage bill, which accounts for two-thirds of government spending. There are calls for the replacement of Finance Minister Samuel Tweah. Weah still has political capital, says Liberian analyst Ibrahim Nyei, but he’ll need to take some immediate steps such as publicly declaring his assets if he wants to overcome growing doubts about his willingness to fight corruption.  

To contact the reporters on this story: Katarina Hoije in Abidjan at khoije@bloomberg.net;Festus Poquie in Johannesburg at fpoqie@bloomberg.net

To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Pauline Bax

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