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Liberia: 2013-2014 FY Budget Signed into Law but Independent Group Says Finance Ministry Fails Its Statutory Responsibility, Misleads Public and Outsources Development to Donors

President Ellen Johnson-Sirleaf,  under a low profile ceremony yesterday signed into law Liberia’s fiscal budget for 2013-2014. According to a release by the President’s Press Secretary, Jerolinkmah Piah, the President signed the fiscal budget into law at her Foreign Ministry/ Executive Mansion office.

ChriSpEAH

Christian T L Peah
Executive Director/LIPO

The 2013-2014 fiscal budget is put to half of billion United States dollars ( US$553,262,413) but according to an independent report released by a civil society group, the Liberian Institute of Public Opinion, LIPO has termed the  fiscal budget as misleading and outsources national development to donors and entices financial misappropriation and corruption, concluding that “the Ministry of Finance has failed its statutory responsibilities as custodian of the PSIP and the budget preparatory entity that approves ministries and agencies budgets by not implementing the PSIP”.  LIPO observes that “most government institutions for the 2013-2014 fiscal period will not be able to do any tangible work because nearly their entire budget is just on salary and goods and service, meaning, there will be extremely low output by those institutions since they will have no project to implement as directed b y the PSIP”, contained in the 2009 Act of the Agenda for Transformation (AfT) and Public Sector Investment Plan (PSIP), a basis by which the fiscal budgets must be crafted to cover 2012-2013,2013-2014 and 2014-2015 respectively.

According to the report, LIPO reveals the Finance Ministry intentionally misleads the public by not disclosing the true amount of the 2013-2014 fiscal budget which is not the figure announced by the Legislature and President when signed it into law. LIPO says contrary to the Liberian government official figure of the budget announced and known to the public, the true amount of the 2013-204 fiscal budget signed law is US$1.2 billion and not US$545,000,000.00.

LIPO’s independent studies of the budget found that the Finance Ministry, Legislature, and President Sirleaf intentionally failed to inform the public about the true projected budget amount for the fiscal year, revealing the budget’s revenue projection comes from two sources. The report names donors (international community) as one of the revenue projection sources and the Liberian government itself.

The independent report asserts that donor’s (international community) contribution to the budget is US$709,926,448, a 54% of the national budget while the Liberian government’s contribution is US$545,000,000.00,  a 46% of the national budget and both revenue projections amount to US$1,202,028,984.

LIPO’s independent analysis of the 2013 fiscal budget also retains that donor’s portion of contribution to the budget comes in three folds, namely, Us$61,000,000.00 to direct budget support, a 9% of the national budget, 81% of US$648,766,568.00 in grants and US$133,293,454.00 (10%) in loan as direct budgetary support, increasing donor’s direct budget support to 19% to the budget announced  signed into law by the government. “Twenty-six  government entities will be beneficiaries of donors project aid support to implement twenty-seven projects”, LIPO report maintains, leaving 108 projects unimplemented for the fiscal year.

The independent report frowns on the finding which found that that though the government inserted the 134 projects it is under obligation to implement this fiscal year into the budget,but it did not allot budgetary allocations and its share of contribution to the budget does not fund any national development which it ought to by law, but leaves reconstruction and national development to donors while they fund salaries and goods and services.

The Liberian civil society group stressed that its independent study of the found that the government only allotted US$111,113,176.00 of the US$545,000,000.00 though it is  to borrow US$133,000,000,00 for fiscal year 2013-2014 from donors as stipulated in their revenue projection contribution. This loan will effectively cover the cost of the government project, releasing any stress of expenditure on its share of contribution to the budget, thereby only servicing salaries and goods and services.

The LIPO’s report further found that 10 funds are established, could be funded by suspicion  by donors funding since they are not allotted  in the budget but three of the funds do not specify which projects they fund and where are they directed, totaling millions of dollars in donor money that will be borrowed.

Under the government budget, the report noted that the budget has the total of US$ 87,012,573.00 for  General and National Claim, Ministry of Finance allotted US$45,116,141.00, Ministry of Planning US$52,000.00, Civil Service Agency  US$7,475,000.00, General Services Agency US$350,000,00.00,  and LISGIS  US$1,000,000.00 while National Claim is US$17, 205,00.00.

Under the National Claim, Ministry of Health is allotted US$1,613,397.00, University of Liberia US$100,000.00, Ministry of Public Works and US$94,771.00, totaling  US$87,012,573.00 for General Claim. According the report, the civil society group says “what is not known is what constitutes General and National claims that are costing the Government of Liberia this huge sum”.

The group emphasized that “there is a need to clearly state what are the General claim and national Claim are line by line per budget item in the  budget so that the Government spending in no way undermine development. There is a need to ensure the amount placed in the  budget for General and national claims are surely accounted for line by line justifiably  be re allocated to fund Public Sector Investment Plan projects”.

The report also makes  the following  recommendations:

1. The National Legislature must ensure that lines Ministries and agencies budget aligned with the Public Sector Investment Plan for 2013-2014.

2. The Minister of Finance should be invited to the Legislature to show cause why he did not allot money to the PSIP Projects.

3. Straight orders should be given to public institutions that as of this budget period all line ministries and agencies must follow the PSIP project document in the preparation of their respective budgets.

4. Government should announce and inform the Liberia people that the actual Grand total of the draft budget to the public as it is written as US$1,202,028,980.00 and not US$541,058,413.00 as previously announced.

5. The Minister of Finance should not submit the draft national budget to the Legislature again or any of his deputies, because submission of the budget to Legislature by officials of the Ministry of Finance is a violation of sections Of the Public Financial Management Act of 2009, this is  exclusively statutory mandate for the president to perform and not the Finance Minister or his deputies.

The “2013-2-14 National Budget Analysis” , according to the LIPO was commissioned and directed under the watchful guidance of its Executive Director, Christian T L Peah, a Senior Research Fellow and Policy Expert to measure whether the budget conforms to the following objectives as stipulated by statue and goals as determine below

  •  Whether  the  national budget is in line with government Public Sector Investment Plan
  • Whether Funds for unspecified spending is in the budget
  • Whether government is committed to  implementing the PSIP
  • To determine whether the national budget is program driven per government allocation
  • Whether the open budget initiative information is actual realistic from the dimension of the PSIP
  •  To determine whether the Ministry of Finance in the preparation of the budget ever use the PSIP as guide
  • To provide information for the budget debate process and Civil society for advocacy purpose on the budget

The report concludes that “the national  budget should be seen  as a complete program driven not by words but by deeds if Liberia is to achieve the dream of becoming a middle income country by 2030 which is the fulcrum of the Agenda for Transformation (AfT). This policy document should not be like numerous policies that we as a nation and people are noted to prepare but lack the willingness to implement.The Aft and the PSIP are good policy documents that intend to improve the equality of life of Liberians by saving and spending, removing one-off payments from operational budget in order to finance PSIP projects”, the report stressed.

About LIPO:

The Liberia Institute of Public Opinion, LIPO is a civil society group founded in 1997 by twin  brothers, J K K Peah and Christian T L Peah, to help in the growth and development of Liberia’s young democracy inspired by the ravage of 1996 civil war while seeking refuge at the SOS Children Village. LIPO is credited for Liberia’s 1997 Proportional Representation election (PR election). The civil society group found that despite the many peace conferences that were held during the civil to broker peace, stakeholders and the country as a hold did not know that the majoratirian system of election s inscribed in the Liberian constitution was not conceivable. LIPO   developed a project tailored to bring together all the stakeholders to the conflict and the Liberian civil society to acquaint them with the improbability of the election under the constitution and to reach a common ground to adopting an electoral system that was practical to the prevailing realities and climate the country found itself.

The project was embraced by the United Embassy and European who then recommend the Election Commission, under the Chairmanship of Cllr. Glory Scott spearhead the project and conduct the forum that will bring together stakeholders since resources to the project to civil group were not available and would take long time to mobilize knowing that the push for election by stakeholders of the conflict was time constraint.

The forum was conducted at the Monrovia by the Elections Commission under the guardianship of EU Democracy Officer Paul Harrington and the Open PR election system modeled  after South was adopted and forward for recommendation to ECOWAS for adoption for Liberia’s 1997 election.

LIPO is also noted as  pioneer of domestic election monitoring and observation and voter education in Liberia as the institution is the first known group to develop program and projects for election monitoring and voter education in  the country 1997 election.

CLICK FOR: LIPO’S   LIBERIA’S 2013-2014 BUDGET ANALYSIS

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