Liberia: CBL Governor Breaks Silence
  • March 21, 2014

The Executive Governor of the Central Bank of Liberia (CBL), Dr. J. Mills Jones, has broken silence days following the passage by the National Legislature of the CBL amended Act.

Governor Jones, delivering a Press statement in defense of the CBL financial inclusion initiative said, "What is being established here is that financial inclusion was not a concept that the leadership of the CBL dreamed about overnight for selfish motives. And to those who say why the CBL didn't start this financial inclusion program earlier, we say that work started not too long after we took office at the CBL in 2006."

In recent time there has been criticisms especially from members of the Legislature relative to the CBL's financial inclusion program to the extent that an amendment to the CBL Act was passed by both Houses of the National legislature banning an Executive Governor, his two deputies and members of the Board of Governors from contesting the Liberian Presidency three years after they shall have left office.

Members of the National legislature also criticized the financial inclusion program on ground that it is depleting the country's reserve.

However, Governor Jones said, "The government and people have spoken on this through the Agenda for Transformation. And the policies of the CBL are consistent with that Agenda, which states that 'the CBL will continue a credit line for commercial banks' on-lending to MSME and will implement proposal for modest credit lines to nongovernmental microfinance institutions and the Afriland Bank for small holder tree crops with them bearing the credit risks'".

He said the Loan Extension Availability Facility (LEAF) of the CBL and other initiative shows that the CBL is doing what the government of Liberia says it should do. "How did that turn into misuse of the county's resources or a political agenda of the management of the CBL?" Governor Jones asked.

Governor Jones said it is important that the public be aware of the fact that in 2012, for instance, the UN Women provided US$40,000 to support loans to village savings and loan associations (VSLA) and that UN Women supported the expansion of the VSLA program in 12 counties, providing over US$450,000 in contract funds to NGOs to help organize and train women, saying, "This suggests that funds are not just being handed out by the CBL without some care."

Governor Jones said presently, there are 15,450 women in the 15 counties involved in the VSLA Program and the UNCDF, under its Microloan Program have provided a 5-year grant, working in collaboration with the CBL, to help develop Credit Unions in Liberia, a project being implemented by the World Council of Credit Unions.

He also noted that funding under the grant is building the capacity of primary credit unions and establishing four regional credit unions in rural Liberia, saying, "One of the buildings has been completed or is near completion in Zwedru."

Expanding further on the financial inclusion program, Governor Jones said assistance is also coming from the Irish League which is currently finalizing a project to provide support for building capacity for credit unions in conjunction with the Liberia Credit Union National Association.

The CBL Boss said as a sign of support for inclusive access to finance through microfinance, the UN Secretary General Special Advocate for Inclusive Finance for Development, paid a three- day working visit to Liberia in 2009 and following that visit, the CBL became a member of the Alliance for Financial Inclusion, an international organization comprising 94 countries, including Liberia.

He noted that the Alliance is the key partner of the G20 Partnership for Financial Inclusion. (The G20 is the world's 20 major economies).

"The members of the Alliance are central banks and other regulatory institutions. These institutions believe that solving the problems of the majority of the world's unbanked population require thinking outside the box, and they have pioneered some of the most innovative policy approaches to extending financial services to the poor, while balancing safety and stability. The CBL is very much concerned about safety and stability of the financial system," Dr. Jones said.

He further noted that the launching of the rural community finance institutions project, the enhancement of the mobile money framework, and deposits with commercial banks to support the capacity of those banks to make loans to Liberian-owned businesses are all part of the commitment of the CBL in the context of the objectives of the Alliance for Financial Inclusion.

"The Central Bank is not doing anything strange, except that the Bank is breaking new paths in the Liberian economy. But is that a politicization of the Bank? That the people appreciate what the CBL is doing to empower them financially should be seen for what it is. Economic empowerment has implications for ensuring a stable macro economy; it contributes to a better distribution of income; it helps people get out of poverty; it strengthens the purchasing power of the people to support local investment. If there is any lesson to be learned, it is that we all should do our jobs well. The people will appreciate all of us," Dr. Jones explained.

He noted that what the CBL is doing has broad international appeal and support and it has nothing to do with "dishing out the people's money".

"And this is the subject which I would like to deal with at this point. We have heard much talk about 'the need to protect the country's reserves, because the nation's economy is in danger, if things continue this way"; about the need to stop the Executive Governor from dishing out public funds"; about "the need to stop the CBL from giving out loans". I want to say that all of this has no basis in fact. And, therefore we should not be offering solutions in such of a problem," Governor Jones said.

Dr. Jones said, "Let us take the issue of the country's reserves. But before going further, it should be noted that the fact that we can talk about the country's reserves is a credit to the Sirleaf's Administration."

He stated, "It should also be noted that the CBL over the last several years has been actively trying to stabilize the exchange rate through regular auctions of United States dollars to the private sector."

"Since 2010, for example, the CBL has sold over US$242 million to the market. The fact that today the CBL, has over 48 times the amount of reserves when we came in 2006, despite these sales, suggests that the management of the CBL has not been in the business of misusing the country's reserves. This is "for nothing talk". Where is the evidence of misuse of the country's reserves?" Governor Jones questioned.

"It should also be pointed out that the CBL has also cooperated in helping the government smooth out its spending to keep certain development programs on track by providing short-term borrowing facilities. The CBL intends to continue such constructive engagement with the government, evidenced by the present discussion with the government for a short-term facility to support the country's infrastructure program," he added.