As hard times grip Liberians senate dodge austerity to budget

MONROVIA—The Liberian Senate is said to be hell bent on doing anything possible to dodge its share of spending cuts initiated by the government, through the Ministry of Finance and Development Planning, to mend the crippled economy.

Sources close to the National Legislature have indicated to FPA that although the Senate itself remains divided over whether or not to order the detention of Minister Konneh on contempt charges when he reappears Tuesday, they just might end up sending Konneh to jail in order to halt the expenditure revision process that expects to slash their spending by US$1.2 million.

It all started January 21, 2016 when the Ministry of Finance and Development through its Deputy Minister for Fiscal Affairs, James F. Kollie, wrote the Liberian Senate informing them that after careful review and analysis of the impact of the global economic downturn on the Liberian economy, the revenue forecast for FY2015/16 was being revised downward by a whopping US$69.9 million.

The Ministry in that letter cited the drop in global prices of iron ore, rubber, and the impact of the Ebola crisis as key drivers for revising the revenue forecast downward. Since then, the Senate and the Finance Ministry have been on a feisty verbal sparring match, with the Senate set to bring contempt charges against the Minister of Finance Amara Konneh when he reappears, for the second time, on Tuesday, February 9, 2016, with his lawyer.

It can be recalled, President Ellen Johnson Sirleaf in her recent State of the Nation Address to the National Legislature had indicated that the revenue forecast for Fiscal Year 2015/16 was being revised downward. She said government would cut public spending by US$69.9 million to address the impact of a declining economy.

Against this background, the MFDP wrote the Senate informing the body that, “subject to Legislative endorsement, your revised recurrent appropriation for FY2015/16 is now set at US14,043,570, down from US$15,306,41. For additional clarity, please note that this new ceiling reflects projected GOL funds and includes the US$7,756,575 that has already been allotted to you, as at December 31, 2015. Therefore, only US$6,286,995 will be available to support your entity’s activities for the remainder of the fiscal year (January to June)…”

According to a Government source, the revised recurrent appropriation mentioned in the MFDP letter to the Senate did not only target the Legislature but all spending entities of Government. “The communication written to the Senate was very similar to what we received except for the amount to be cut,” the source said.

But the Senate, during its preliminary hearing with Minister Konneh and his principal deputy Kollie on February 2, 2016, said it was mainly the tone of the letter that incited their wrath. “It was total disrespect,” fumed Senator Conmany Wesseh. Other Senators also questioned the authority of the Executive branch of government to grant itself appropriation powers regarding the national budget. “What they did was completely unconstitutional,” blasted Senator Yongblee Karnga-Lawrence from Grand Bassa County.

Home of the Liberian Assembly, the Capitol Building
Home of the Liberian Assembly, the Capitol Building

Many callers on various radio talk shows across the country said the Senate move was intended to divert attention from the proposed spending cuts to its budget and the resulting spectacle, a ploy to bring the authorities into submission to avoid cutting their budget.

One caller remarked “I think the whole contempt fiasco is a clever attempt by the Liberian Senate not to give in to the budget cut. The fact remains these are the very people, for whatsoever reason known to them, that arbitrarily increase the budget proposal year after year. And they are in position now to lose their gas slips and their benefits, and hence their anger”. Aides to Konneh told this paper, it had never been their intention to drag the debate this long but were left with no alternative but to fight the matter to court, as the Senate request for apology over a “Constitutional breach” was unacceptable.

Regarding the subject of unconstitutionality, Deputy Minister James Kollie recently clarified that the Ministry was “acting upon Section 11(2) and (3) of the PFM law by sending out a Budget Call Circular (BCC) which sets the ceiling for each spending entity based on the projected revenue envelop and then requests them to get back to us within a certain timeframe so that we can compile the estimates and make the budget proposal which the President will then communicate to the Legislature.”

Emphasizing further, Kollie said, “The President depends on technicians to put that proposal together. In order for the technicians to complete that proposal, they will need inputs from all spending entities as per the PFM Act”. “If you read our letter carefully and not engage in what one Senator did by skipping a relevant phrase in the letter, we stated that “subject to legislative endorsement” in line with Section 18(4) of the PFM Act of 2009 that the Supplementary Budget shall be approved by the Legislature,” Kollie said.

According to him, in line with Section 6 (c) of the FY 2015/16 National Budget the Minister of Finance and Development Planning is authorized to institute risk management and cost saving measures during budget execution to ensure that spending is in line with revenue collection and that the strategies and measures shall be done in consultation with the Ways, Means and Finance Committee of both Houses.

“The communication can in no way be a violation of the constitution of Liberia as claimed by some members of the senate,” Kollie said. Public reaction to the current standoff between the MFDP and the Senate remains heavily weighted against the Legislature. “Rubbish”, is what FPA publisher Rodney Sieh termed the Senate’s decision to hold the MFDP Minister in contempt over constitutional violation. “The fact that someone tells you to cut your budget does not mean you must punish them,” Sieh told a local radio station recently.

It remains to be seen how far and where the brouhaha will lead, but analysts are gravely concerned that if an amicable resolution to the standoff is not reached quickly, it could dent the country’s image among global financial institutions, and further deepen the already harsh economic woes. source FPA

Pic: Senator Comanny Wesseh of River Gee

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