Analysis

The president’s preferment of the CBL authority and highlighting its sustained and significant contribution the Liberian economy has witnessed over the five years of her incumbency cannot be over emphasized evident by the fact of the macroeconomic gains enhanced and sustained. It is important to note the role of the Central Bank of Liberia to the point of the nation’s debt relief in 2010.

   The CBL played a major role along with the Ministries of Finance and Planning and Economic Affairs in negotiating the program with the International Monetary Fund (IMF), World Bank, African development Bank and other international financial institutions that culminated in total debt relief for Liberia. Governor Jones was a signatory to all the Letters between the Liberian Government and the IMF.

   The astute policies of the CBL are also instrumental to the broad stability of the Liberian macroeconomy. The maintenance of broad exchange rate stability is one way through which this is enhanced. Further, there continued to be growing confidence in the banking system; deposits are up and loans to the private sector are up thereby contributing to economic growth.

   The CBL was very instrumental in bringing Liberia into membership of the West African monetary Zone, and subsequent to that, the CBL worked along with the West African monetary institute to apply for funding from the African Development Bank to modernize Liberia’s payment system in line with what is being done in The Gambia, Sierra Leone, and Guinea. The ADB agreed a grant the project was launched by the executive Governor on December 15, 2010. This is an important project for the economy of Liberia because a modern payment system is critical for the development of all sectors in the economy and tying the Liberian economy to the world.

   The CBL worked with other experts and drafted two Bills, one for the establishment of a commercial code and the other for the Legal Framework containing the substantive law for the conduct of commercial transaction of commercial disputes all of which has been passed and signed into law under the sponsorship of the CBL and other stakeholders. They were signed into law on September 29, 2010.

   The bank through its Legal Department, has also drafted a New Anti Money Laundering Bill and is leading the fight against Money laundering by its due diligence preventive measures in the financial system relating to suspicious transactions.

   The CBL has developed the framework for the launching of the Treasury bills program in Liberia. The first of such project aimed at deepening the financial market and at giving the CBL another tool for monetary policy. The CBL also introduced and launched a US$5 million Credit Stimulus Initiative for Liberian-owned Small and Medium scale enterprises. It’s noteworthy that the CBL utilized its own resources for the implementation of this initiative which is a clear manifestation of its strong support for Liberia’s private sector development. The Liberian-owned credit Stimulus initiative is the first of its kind in the history of Liberia.

   The CBL has made significant achievements when it comes to strengthening the regulatory and supervisory regime in the following areas: credit Reference Regulation; Regulation on deposit-taking microfinance institutions; Directive concerning security and surveillance system at financial institutions; Directive on the display of interest rates and all other charges, as a means of protecting consumers; Directive on due diligence on prospective and existing employees, in order to ensure that those working in the banking system meet certain standards of integrity, among others.

   The CBL, in collaboration with the International Finance Corporation (IFC), developed regulation to guide commercial banks that may want to engage in lease financing. This has the potential to stimulate private entrepreneurs who may want to engage in the construction industry as well as infrastructural development.

   Also during the course of last year, the CBL ensures that all of the banks maintained the minimum capital requirement of US$8 million from US$6 million in 2009 and Capital Adequacy Ratio (CAR). Presently, all banks are required to have US$10 million as at the end of 2010 CAR of 10%. As a result, the CAR for the industry was recorded above 20%, which shows that the banking system is much more resilient and sound.

Conclusion  

   With such enormous and other vital achievements not indicated supra, it is not surprising therefore, that President Sirleaf having realized the strides and achievements of the CBL authority and staff had decided to give them the flowers while still at the helm of the nation’s state of affairs. This demonstration of singular recognition would definitely serve as a motivating factor for them to work assiduously and collectively to help enhance the total rejuvenation of the Liberian economy.