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Submitting ‘Credible’ Budget, MFDP Admits Wage Parity, Not Civil Servant Pay Cut

MONROVIA, June 25 (LINA) – Finance and Development Planning Minister Samuel D. Tweah says the government is committed to a credible budget execution during fiscal year 2019-2020, assuring Liberians and the delegation from International Monetary Fund (IMF).

A team from the IMF, led by Mika Saito, has ended a two-week discussion on the possibility of lending financial support to Liberia under the Extended Credit Facility – during which meetings Minister Tweah assured the Weah-led government commitment to fighting fraud and abuse of resources.

The Ministry of Finance says the government has agreed to establish a ‘Corruption Court,’ a significant mark to further showcase its readiness for business.

Frantic effort to pay domestic vendors in the amount of US$35 million is being made by the governments, said Minster Tweah.

Amid media reports of government’s plan to cut civil servants’ salaries, minister denied such publications and said what government was doing is payroll harmonization, and not a salary cut.

“This is a revolutionary exercise; what we are doing is wage harmonization, not wage cut. This is about paying people across government with same position with the same salary,” emphasized Min. Tweah.

According to the Ministry of Finance, the government’s wage-bill in Fiscal Year 2018/2019 was US$330 million, “but with the harmonization, the new wage-bill for 2019/2020 will now be US$297 million.”

The government has instituted strong revenue measures which will ensure US$22 million in new revenue during the new budget year, and macroeconomic stability could only be achieved when the fiscal and monetary institutions of government work together, Tweah told the IMF team on Monday.

In the meantime, Mika Saito, IMF’s Deputy Division Chief, Western II Division African Department, said they have observed that a series of external shocks has cause challenges for Liberia, specifically citing key commodity prices, lingering effects of Ebola, and rapid depreciation of the exchange rate that followed the economic situation facing the country.

IMF mission suggested to the government that macroeconomic stabilization, particularly a lowering of inflation, should be an immediate priority while public sector is essential to supporting the reform agenda.

The mission discussion also included a package of growth – enhancing structural reforms to strengthen public financial management and improve the business climate.

The mission noted the importance of rebuilding foreign exchange reserves to improve resilience to external shocks, which is one of the key objectives of fund supported programs, while also highlighting the importance of allowing the exchange rate to remain flexible and improving the transparency of CBL’s foreign exchange operations.

A release from the Ministry on Tuesday quoted the IMF mission as saying that growth has slowed while inflation has accelerated and stands at 23 percent.

It also pointed out that securing enough resources to fund efficient government expenditure will require both additional revenue measures and reforms to reallocate expenditure, while reduction in the size of the public sector wage bill is necessary.