MONROVIA, Jan. 25 (LINA) – In fulfillment of his constitutional mandate as enshrined in Article 58 of the Liberian Constitution, President George Manneh Weah mounted the podium in the joint chamber of the National Legislature on Monday and informed the people of Liberia that the nation’s economy remains fundamentally “sound and strong,” despite the numerous challenges.
In a detailed State of the Nation Address (SONA), Weah reminded all about how the global economy faced and continues to encounter the scourge of a pandemic in COVID-19, while also narrowing the scope to the home front, though insisting that the nation has made significant gains in the fight against the disease.
“The most significant factor that negatively impacted the Liberian economy during the year under review was the Coronavirus pandemic, which has afflicted tens of millions of people in all nations,” Weah emphasized.
The recovery of Liberia’s economy, said Weah, will additionally depend on the persistence or otherwise of COVID-19, citing, however, that recent news about production of vaccines for the prevention and treatment of the pandemic is a positive development which will propel the global post COVID-19 recovery.
In the last quarter of 2020, he noted, developments in the foreign exchange market were relatively favorable as the Liberian dollar recorded persistent appreciation compared to other countries in the ECOWAS region, whose currencies widely depreciated.
Weah told the nation that the year 2020 was challenging for the Liberian economy, stating that Real GDP growth projection was further revised downward to negative three (-3.0%) percent for 2020, from the earlier projection of negative two point five (-2.5%) percent, reflecting a decline in economic activity, largely due to prolonged lockdowns at home, restrictions on international travels, disruptions in supply chains and international trade, and the second wave of the pandemic now seen in several countries, including Liberia’s major trading partners.
Referencing the liquidity huddles which challenged the nation during the year under review, Weah indicated that despite the printing and delivery of L$4 billion in July 2020, the economy was challenged by difficulty to access Liberian dollars in the financial sector, largely reflecting about forty percent rate of mutilation of the existing Liberian dollar banknotes in circulation.
Additionally, he maintained that the liquidity pressure on the Liberian dollar was aggravated by increasing demand for the local currency, induced by many players in the economy, such as mobile money agents, large numbers of ATM card holders, and foreign exchange bureaus.
“During the course of the year, the policy of my government was significantly focused on protecting the purchasing power of our low-income population by aggressively fighting inflation, which reduced from about thirty percent at the end of December 2019 to about twelve percent at end of December 2020. We continue to work aggressively on the goal of price stability so that our people will feel the benefits of macroeconomic reforms,” Weah indicated.
Relative to the nation’s growth during the current year, Weah said Liberia’s economy is projected to grow by 3.2 percent, on account of expected growth in all major sectors of the economy, as well as favorable global developments.
Among other things, the Liberian leader cited that the nation’s total stock of public debt at the end of 2020 “amounts to US$1.580 billion of which domestic debt amounts to US$643.39 million while external debt amounts to US$940.93 million dollars.
At the end December 2019, he disclosed, the total stock of public debt stood at US$1.28 billion, of which domestic debt amounted to US$419.8 million while external debt amounted to US$862.87 million.
He informed the nation that increase in domestic debt stock is mainly because of the restructuring and consolidation of the government’s debt to the Central Bank of Liberia.
“It includes US$170.63 million that was contracted by the previous administration but never included in official debt statistics. This irregularity has now been corrected,” he added.
Meanwhile, Weah disclosed that the repayment of Liberia’s domestic debt stock has been structured under the current IMF-supported economic program.
The government, he maintained, is now working to validate the stock of other domestic debt and that payments on domestic debt have commenced as a means of stimulating the economy.