Monrovia - Describing the current state of the nation’s economy the Deputy Bank Governor for Economic Policy at the Central Bank of Liberia has revealed that the Ebola outbreak has given a different face to Liberia’s categorization as an economy, thus, Liberia is now being seen as a high risk economy, indicating that vessels coming to Liberia on insurance and freight, the associated cost has more than three-foe increased.
“Importation of goods is now experiencing high cost. And that means the importer has to pass down the fees to the consumers, but the government’s intervention has to some extent said, let’s see what this difference is in the context of insurance and freight and how then can we work together to mitigate that the incident of a price increase associated with the importation of goods does not hurt the consumer public that is already some form of difficulty” Mr. Boima Kamara noted. “
Commenting further on loan payments, the Deputy CBL Governor stressed that as a result of the deadly Ebola outbreak, many businesses in Liberia are beginning to default in paying loans they received from commercial banks prior to the outbreak.
Speaking in Monrovia at a workshop for bankers, organized by IBEX Liberia, Mr. Kamara said non-performance loans at the beginning of 2014 was averaging around 14 percent, but in September the average increased to 16 percent, indicating that more businesses were not paying back their loans. “I received some complaints of around twenty SMEs that some of the banks were insisting that facilities that they were not paying on they will run the interest, they will charge them penalties”, the Deputy CBL Governor said.
However, Mr. Kamara noted that as a way forward to addressing the banking side relating to default on loans and the non-performing loan ratio, the Central Bank of Liberia is now working on a package which will allow the CBL to engage the commercial banks to find a better way forward especially for clients who have been performing prior to the Ebola outbreak.
Said Mr. Kamara: “So if that is seen as a result of the Ebola outbreak a business or a client now begins to default, there is a legitimate reason why a person is defaulting. So on a case by case basis the Central Bank and partners will work with the commercial banks and we begin to look into who gets some level of waiver, how then do we even engage the commercial bank as a way of relaxing some provision regulation that will at least give you some breathing space as we together find a way forward to make sure that the pressure is not sent down to the business community that is already being affected.”
Kamara said some of the Liberian enterprises, especially the service sectors are being hard-hit by the Ebola crisis and that more stimulus support is required to keep them on track. “Restaurant, hotel owners are hard-hit,” he said. Meanwhile, IBEX Deputy Chief of Party Augustus Flomo maintained that his organization will continue to work in the business development sector of Liberia to ensure that Liberia has a flourishing economy.
“We thought it was necessary and reasonable enough to bring together those who participate in the business sector so that we are all able to understand and discuss the issues rising as a result of the health situation that we all have encountered. The training today is intended to be more or like a discussion and participation from all of you who have come,” Mr. Flomo said.