Monrovia – The head of the Central Bank of Liberia and President Ellen Johnson-Sirleaf appear to be headed toward a collision course. Governor Mills Jones’ much-touted Micro Financing drive credited with giving small business owners and market women economic relief and which has been a key contributor to the post-war nation’s Poverty Reduction Strategy is said to be the centerpiece of a brewing dilemma with drastic implications for the 2017 presidential elections.
For some time now, Jones and the Executive Branch have been at loggerheads over the micro-financing program, but the issue is said to have come up again last week, during what insiders say was a “very contentious meeting” between the President and the CBL Board including Governor Jones. Credible sources have confirmed to FrontPageAfrica that the Executive Branch is attempting to force Governor Jones to resign even though he is still one year shy of his tenure as Governor.
The report follows an earlier attempt by lawmakers to amend the CBL Act to prevent the CBL Governor from contesting for political office. The same sources Governor Jones remains unmoved as he has the backing of his Board of Governors. In February 2013, the Senate voted unanimously to pass a bill that would deny current executives of the Central Bank of Liberia (CBL) the right to run for elective office for three years.
The Liberian constitution prohibits laws from being applied expo facto, which means a law cannot be made that is retroactive. In this case, the legislature cannot legally make a provision that stops the current Governor from running for public office. According to legal experts, the legislation would apply to future holders of the office of Central Bank Governor. The bill, which is an amendment to the Act that authorized the establishment of the CBL on March 18, 1989, declared that:
"The Executive Governor of the Central Bank of Liberia and members of the Board of Governors shall be prohibited from contesting political office(s) while serving in their respective offices and shall not be qualified to contest any electable office within three years consecutively after the expiration of their tenure and in his/her resignation from the Central Bank of Liberia."
While some lawmakers dismissed suggestions that the move was an attempt to stifle Governor Jones’ popular micro financing drive, many political observers say Jones has becoming a potential threat to potential 2017 presidential contenders. The House of Representatives is expected to fully concur with the Senate on this bill. Members of the House had originally called for a one-year restriction. The Senate has called for three. It is also noteworthy that the bill targets only CBL officials and does not apply across the board to other officials of government, such as cabinet ministers, ambassadors and heads of agency, for example.
Press Secretary Jerolinmek Piah confirmed to FrontPageAfrica last week that the meeting did in fact take place between the President and the CBL board and that “the role of the bank in the developmental drive” was discussed but the issue of Governor Jones’ resignation was not on the table.
Sources privy to the meeting however confirmed to FrontPageAfrica that the meeting got off on a smooth note with President Sirleaf offering pleasantries to the Governor but went straight into the crux of the ongoing dilemma, as the President told the CBL Board and Governor Jones that she is getting a lot of complaints from members of the National Legislature and the international community but did not say who in the international community, regarding what she believes is open political campaigning with the Governor and his supporters getting at the back of a pickup truck to open new bank branches and dole out micro-financing loans to marketers and small business-owners.
Central Bank of Liberia Governor, Dr. Mills Jones
The latest brouhaha between the President and the CBL Governor comes on the heels of this week’s annual Spring Meeting of the International Monetary Fund, which President Sirleaf is set to make an unexpected appearance.Sirleaf, according to sources has not yet notified the Governor that she would be attending. The annual Spring Meeting brings together thousands of government officials, journalists, civil society organizations, and participants from the academia and private sectors, gather in Washington, DC for the Spring Meetings of the World Bank Group and the International Monetary Fund.
At the heart of the gathering are meetings of the IMF's International Monetary and Financial Committee and the joint World Bank-IMF Development Committee, which discuss progress on the work of the IMF and the World Bank Group. Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial markets. This year’s Spring Meetings event will take place in Washington, D.C., April 17-19, 2015. The plenary session of the World Bank Group and the IMF's Boards of Governors is scheduled only during the Annual Meetings in the autumn. Jones and the CBL have been come under fire amid popular appeal and some success with the loan and stimulus drive.
Economist and Professor Dr. Byron Tarr came to the Governor’s rescue during a Senate debate last February by lamenting: "If the senators are saying that banks loan scheme is in keeping with the act establishing it, then the burden of proof rests on the shoulders of the accusers and as such he challenged the senators to prove that the bank had violated any laws.”
Added Dr. Tarr: "Central Banks in all countries are independent. Unless there is a violation or malpractice that you can point to ... and it will have to be documented, I don't consider any limitation on the powers of the Central Bank to lend money. I don't know the details of the money they have loaned out or so, but in the laws, you have, the obligation will be yours to point out."
The CBL initiative has benefited several groups. The CBL-SME Credit Stimulus Initiative, for example, is a policy intervention of the CBL aimed at broadening access to finance for Liberian-owned businesses. Bank executives say access to finance has been a major challenge, especially when borrowing rates are high, due to the high cost of banks’ capital and operating expenses. The program is intended to fire up economic activities in Liberia and has provided more than US$4.6 million in loans to 88 Liberian-owned businesses, 25 of whom are women.
The Loan Extension and Availability Facility (LEAF) is a grass roots program intended to get funds directly into the hands of Liberians who utilize the microfinance sector at a low interest rate and a longer period. According to the CBL, the goal of the program is to help ordinary Liberians who otherwise would be unable to get loans from commercial banks. The program requires no collateral and loans are provided to beneficiaries through their financial institutions, including microfinance institutions, credit unions and village savings and loan associations. The LEAF program, according to the CBL has provided a total of 364 loans to financial groups of ordinary Liberians in all 15 counties since its inception to a tone of over $200 Million Liberian dollars.
The Microfinance program has received assistance from several international institutions such as UNDP and UNCDF (the United Nations Capital Development Fund). The CBL is also a member of the Alliance for Financial inclusion (AFI), an international organization. The CBL Mortgage Stimulus Initiative is for the first time providing an opportunity for Liberians to obtain long term loans for home ownership. The program is being administered by the Liberians Bank for Development and Investment (LBDI) and is intended to impact Liberians in all of the political subdivisions of the country at all economic levels.
Jones himself continues to remain encouraged and supportive of the program, telling businesswomen of the National Apex of Saving and Loan Association and the official opening of its headquarters on the Old Road recently: “When we empower the women of Liberia, we are empowering the nation, we are empowering our children; we are empowering our family as well as insure our future by putting our country on the right path of others.”
Jones says his critics are simply off the mark: “My response to them was the informal sector of the economy is very important because it is providing livelihood opportunity for the majority of the Liberian population.”