Liberian President Seeks to Clean Up Central Bank After Scandals

(Bloomberg) -- Liberian President George Weah announced an overhaul of the central bank’s leadership to restore confidence in a institution that has been beset by scandals and is hampering efforts to deal with an economic crisis.

Executive Governor Nathaniel Patray will retire within the next three months and his deputy for economic policy, Mounir Siaplay, tendered his resignation with immediate effect, Weah said Wednesday in a speech on state broadcaster Liberia Broadcasting System. Patray was appointed in July 2018.

The government will open nominations for a vetting committee to appoint the bank’s new leadership, said Weah.

In July 2018, Weah ordered a $25-million injection into the economy to mop-up excess Liberian dollars. An investigation by the state auditor found that only $17 million was used for this purpose. A separate inquiry into the alleged disappearance of about $100 million in cash that was printed abroad found that while no money was missing, there were lapses in the accuracy and completeness of the central bank’s internal records.

Major Lapse

“All of these reports point to a major lapse of controls at the Central Bank of Liberia,” said Weah. It “calls into question the ability of its present leadership to effectively revamp its internal mechanism to provide greater accountability and professionalism.”

The West African nation’s economy has failed to reignite in the five years since the worst-ever outbreak of Ebola brought growth to a standstill. The Liberian dollar depreciated by more than a quarter in 2018, causing inflation to accelerate to 28% by December and the International Monetary Fund to revise its economic growth forecast to this year to 0.4%, from 4.7%.

Weah also pledged that the government would no longer borrow from the central bank for its equity needs -- a recommendation made in March by the IMF, which said that “strong policy actions” were needed to reduce inflation and boost growth.

Faced with a decline in grants and external assistance, Liberia’s wage bill, which accounts for two-thirds of government spending, is “no longer a tenable situation,” the Washington-based lender said.

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

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

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