By: Wonderr Koryenen Freeman, Attorney, CFCS

The Liberian president and his high-powered delegation recently returned home from China to much excitement and fanfare. Back home, the Minister of the Interior had already issued a day off to government (GOL) workers to enable them to throng the airport to give H.E “Dr.” Joseph Boakai Sr. a rousing welcome for his “great developmental initiatives.” By development initiatives, they mean the expected announcement by “Dr.” Boakai about Chinese aid and/or loans. It’s such a great deal for President Boakai because, since his inauguration in January (2024), he has traveled to at least half a dozen countries and, contrary to many expectations, came back empty-handed – no bilateral aid, no grant, and no loans. On this trip, however, it appears Mr. Boakai had struck “gold”. The Forum On China-Africa Cooperation (FOCAC) was called by China and held in Beijing in September 2024. As a typical African delegation, the official press release puts the delegation as twenty-two (22) VIPs, excluding “support staff, protocol, and communication assistants, security personnel, and other key personnel”. Unofficial estimates put the full delegation size at least fifty (50). Again, no surprises here! Quite typical of African leaders! Finally, Mr. Boakai came home, and, amidst all the pomp and pageantry, made the big announcement viz:

1. 21 billion Chinese Yuan (US$3b) for oil refinery in the Port City of Buchanan
2. 705 billion Chinese Yuan (US$100m) in road construction
3. MOU for hotels, housing projects, and playgrounds

Of course, there are a few questions that must be asked. Like… oil refinery? And where are the oilfields that will presumably supply the refinery? And is this investment a grant or a loan? What are the terms? If it is a loan, it would make sense for the GOL to take another look at its overall loan portfolio. As at the end of year 2023, Liberia’s total debt portfolio stood at US $2.2 billion (i.e., 51% of GDP)[1]. Even worse, according to the latest joint IMF-World Bank LIC Debt Sustainability (2022), Liberia’s external debt distress is MODERATE; whereas, it’s risk of overall risk of debt distress is HIGH[2]. What does all this mean? This means Liberia is just one to two steps away from complete [debt] distress (a.ka. being bankrupt and unable to pay her creditors). So, it’s important to know the terms and conditions of this sought-after Chinese capital. And even more curious is the question: Why is Liberia going to China to ask for “housing projects” and “playgrounds”? Do we need Chinese capital for this, too? But, again, from the perspective of our brothers in the UP’s gravy train 2.0, these are stupid questions.  

Seeking Chinese Capital – without Asking Why is Liberia Broke?

This is a compounded question. Mr. Boakai has only been in power for eight months, so he is ostensibly not responsible for Liberia’s current predicament. But on second thoughts, this is a man who has worked at the top levels of the Liberian government for the past 40 years. On this score, he represents an integral part of the bad political leadership that caused Liberia’s poverty to start with. To further make the point, let’s take a quick look at Liberia-China’s economic fortunes over the decades (1960 – 2020)

TABLE A Liberia-China GDP per capita (1960 –`2020)

Country	1960	1980	2000	2020
China GDP per capita	$ 89	$ 195	$ 959	$ 12,614
Liberia GDP per capita	$ 168	$ 442	$ 302	$ 624

Data from *** https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CN-LR

The question our leaders don’t want to be bothered with, but which must be asked anyhow, is: How did we get from being “relatively wealthier” than China to now lining up begging for alms in Beijing? This is a necessary question our leaders have declined to ask: “How come”? What did we do wrong? For those who read the news daily, the evidence of what went wrong is still splashing across our local papers, TV screens, and internet feeds. But our leaders find it so convenient to sidestep these serious governance issues and go cap-in-hand to China begging for alms and loans – loans that they have no intention of paying back.

Let’s go over a few reasons why Liberia fell behind China and will remain so until our leaders sober up and develop a change of mindset and a shift in attitude.

Reason #1 Corruption, Corruption, Corruption

On this metric alone, it’s not difficult to see why Liberia is poor. But it’s not due to a lack of money but the outright theft of public funds.

TABLE B  Snippet of Increasing Fraudulent Schemes by Liberian Government Officials

A snippet of fraudulent schemes that has gone with impunity	Theft & Scams$$
Roland Gidding (Public Works) illegally blew up road construction funds	22,000,000
Mamaka Bility, Sylvester Grigsby & Pres. Boakai fake road equipment scheme	80,000,000
Ministry of Finance payment of fictitious creditors – without valid documents	139,000,000
Money diverted to Nat’l Security Agency & E.P.S / fake security operations	125,000,000
Total corruption and other illegal acts by execs at the Central Bank/Liberia	80,000,000
Illegal extra-budgetary expenditures at multiple ministries and agencies	100,000,000
Total corruption, conflict of interest, and theft at the National Legislature	Millions (undetermined)
Total corruption, greed, and other illegalities at the Ministry of State	Millions (undetermined)

Now, this is what is happening in Liberia as we speak. Mr. President is not concerned with seizing control of the situation and preventing or arresting the corruption, waste and abuse of Liberia’s financial and other resources. He’s more interested in going to China to get what he presumes is “free” money. How is development possible in a culture like this? This is almost a billion dollars lost in corruption and illegal deals. And we are celebrating Chinese loans of $100m?

Reason #2 Bloated Salaries & Other Wasteful Spending

Liberia is an impoverished country. But you won’t tell from the size of our government delegations or from the size of our government official salaries.

TABLE B Comparative salaries of China’s lawmaker vs GOL officials

DESCRIPTION OF EMPLOYEE/EXECUTIVE	Annual salary	GDP per capita 2023	% by which Salary is > than average GDP
Chinese lawmaker[3]	19,200	$12,614	52%
Indonesia President[4]	27,200	$4,940	451%
Liberian Senator[5]	155,000	$799	19,299%
Execs of state enterprises (LTA, LPRC, NPA, LiMA etc)	180,000	$799	22,428%
Liberian Vice President[6]	264,000	$799	32,941%
Typical Civil Servant	2,400	$799	200%
Average [GOL/VIP] Senator/Lawmaker/Vice President	199,666	$799	24,890%
Number of Years an average civil servant must work to make 1 year’s salary of the typical GOL VIP	83	YEARS

There are many reasons why Liberia is poor. Let’s start with the salary of GOL officials. The average VIP salary, as seen from Table B above, is about US $200k per annum. A lawmaker in China’s Congress will need to work for at least ten years to make one year’s salary of the average top GOL official. But it is the GOL officials that go to beg the Chinese for alms, for grants, and loans. As for the average Liberia civil servants, they must work 83 years to make a year’s salary of a top-level GOL official. Given the average life expectancy of Liberians (at 64 years[7]), this is simply not possible. Liberian civil servants will work their entire lives and never ever get to make one year’s salary of a top GOL official. I mean, what is this? What sort of cruelty is this? And in all honesty, the salaries of these top officials are, in fact, underestimated. For example, in addition to their already sumptuous salaries, our lawmakers allot to themselves constituency visits allowances, special project fees, “county development” funds, oil block “consultations” fees, and new vehicle purchases (all of which are not part of their “official” salaries). After doing all of this, then they go to China, South Korea, and Indonesia, looking for “free’ money to develop Liberia. Quite hilarious! But, as Tom Kamara would quip: This too is Liberia!

Reason #3 Conspicuous Consumption & Misplaced Priorities  

We’ve stated that corruption and unconscionable salary structure as reasons #1 and #2, respectively, for Liberia’s poverty. But that’s not all. Our government spends, on average, 90% of its income on consumption and debt servicing. Even the remainder (i.e., the 10%) is frequently misclassified as an investment since, for example, vehicle purchases, because they are amortized over five years, get classified as capital expenditure. But of course, it is not! The type that most GOL officials buy is luxury SUVs, which, in fact, represent a drain on the economy. So, in reality, not more than 5% of GOL’s annual revenue is [actually] invested in income-inducing capital expenditures. Most financial planning experts posit that an individual (and, presumably, institutions) should invest no less than 15 – 30% of their income in order to grow and prosper financially. But how can we grow (as a country) when our president travels frequently with a 50-to 60-person delegation(s)? How can we grow as a country when we spend USD 20-30 million annually on “covert security operations” (alias NSA) and “executive protection.” (EPS). Sadly, on the contrary, we spend $5 m on agriculture. At this rate, we are doomed perpetually to be on the “breadline,” begging China, Taiwan, South Korea, Indonesia, and any other country with “dough” to spare.

Other Reasons for Liberia’s Poverty

There are many other reasons for our poverty, but when the argument is stripped, essentially it boils down to reason number one, two, or three. For example, as a country, we failed to invest in quality education, or in technical education. Of course, considering what I have already stated in reasons one to three, we lack the resources to invest in quality education. We lack the means to invest in the needed growth-inducing infrastructures. So, for example, to pave the road from Freeport to Redlight, we have to wait for the Japanese. And if the Japanese dole out this money in ten years, then the project must take ten years. And to rebuild our airport, damaged from years of war and neglect, we have to wait for the Chinese. Similarly, to get electricity, we must wait for the US Congress to allocate this money for the hydroelectric power station or await funding from the Millennium Challenge Account. And why are we not able to fund our own development needs? Well, I point you back to reason #1, 2, & 3. And with a leader well-schooled in the corrupt way of governing, we are “done” – c’est fini, kaput, finito. We have locked ourselves in a cycle of poverty and destitution.

Lack of Viable Programs to Promote Local Enterprise

And despite all that I have already said, there is still one more issue worth mentioning: the total absence of any meaningful program to promote local enterprise and domestic investments. Nearly all such initiatives have disintegrated under the weight of massive corruption. You can mention the terrible mismanagement and utter impunity of the Private Sector Development Initiative (PSDI) – under ex-President Madame Ellen Johnson-Sirleaf. Similarly, our ex-president and Buga-dancing playboy pastor, Mr. George Weah, and his merry band of hustlers did likewise with the “Pro-Poor Development Loans.” They could just as well call it the CDC loyalty loans. All these noteworthy initiatives necessary to stimulate the local economy were squandered, and, even worse, the culprits walked away with impunity. As for Mr. Boakai, maybe later he will come up with a plan to bolster the local economy, but firstly he, Sylvester Grigsby, and Mamaka Bility must execute their #1 priority – e.g. pushing down our throats a scandalous US $80m yellow-machine deal – salivating at the prospect of a hefty kickback. After this, they will pay attention to what is happening in the local economy. Under Mr. Boakai, the UP-GOL has yet to spell out its plans for boosting the local economy. For now, Mr. President’s signature economic policy is crisscrossing East Asia in search of “free” money. He dearly believes that if he can make one more trip, maybe just one, he could scoop up some big-ticket Chinese capital.

Monetary Policy Constraints

Every country relies on a mix of fiscal policy and monetary policies. But with the GOL consuming 90-95% of its annual income on recurrent expenditures (including unconscionable executive salaries, wasteful foreign travels, and luxury vehicle purchases), they have all but obliterated the fiscal policy space. If the only wiggle room you have in terms of fiscal policy is 5% of a national budget of approximately US $750 million, we are talking just about $37.5m in discretionary investments. For an individual, a company, or a small island country, that’s good money. But for a low-income country of 5.5 million people, that’s a non-starter. This is a fiscal policy bust.  

With no fiscal policy space, we are left with just monetary policy backup. But again, our dual currency policy acts as an “own goal”. We have a highly dollarized formal sector of at least 75%[8]. The true level may be as high as 85% to 90%, if you factor in Liberia’s large informal sector. With a negligible level of local currency use, we have shot ourselves in the leg on the monetary policy front. So how will Liberia grow its economy with an infinitesimal fiscal policy space and a similarly negligible monetary policy leverage – all compounded by a bloated GOL structure mired in corruption, waste, and utter impunity?

The Search for Economists from Heaven

Liberia’s recent Finance Minister was kicked out, or he resigned for mental health reasons (depending on whom you choose to listen to). Mr. Boimah Kamara was a well-known “prayer warrior” who attempted the abomination of being equally yoked with “unbelievers.” Okay…maybe “unbelievers” is not quite the term here. Let’s say he tried to be equally yoked with a Baptist deacon who has no compunction about dancing with the devil and a GOL of strange bedfellows – dedicated to unrestrained corruption and impunity. This kleptocratic cocktail proved too much for “prayer warrior” (Boimah), who had to escape for “heavenly redirection”. But that did not stop the Liberian president from looking for another “economist from heaven” – more precisely, an economist with that Midas touch, who would wave his magic wand and, in a very short order,  all be well with Liberia’s economy.

For this, the President went to his favorite recruiting ground – Kolahun, Vahun, Bolahun. Step forward Mr. Augustine Kpehe Ngafuan, former Budget Director, former Minister of Finance, former Minister of Foreign Affairs, and former Country Manager of the African Development Bank (AfDB, Uganda Office). The brother checks all the boxes, as far as economic orthodoxy is concerned. I’m not one to throw shade on a brother’s moment of glow. I wish him all the best in his ambitions: be it to revamp the Liberian economy, or better still, to correct his past mistakes (i.e. of not “knocking off” when he had the chance) or best of all, to lay the groundwork for his 2029 run. In my usual nonconformist heterodoxy, I can only say: Best wishes, Ngaf! You have at most a 5% fiscal policy space, no monetary policy backup, a National Legislature dedicated to ripping off the Liberia people. On top of that, you have a failed justice system and a President with zero leadership abilities and no commitment to fighting corruption and ending impunity. Good luck, my brother!

The Liberian government is not only satisfied with looking eastward. They are also looking everywhere but within themselves. So, naturally, they are looking westward, as in looking to the IMF to clinch an Extended Credit Facility worth some “SDR[9] 155 million (equivalent to about US$209 million or 60 percent of the country’s quota)[10]. According to the IMF, the Extended Credit Facility would support the authorities’ implementation of key policies, including restoring fiscal sustainability, rebuilding external reserves, ensuring financial sector stability, and revitalizing a reform agenda to tackle governance and corruption issues. Yeah, standard IMF-World Bank… blah, blah, blah. What kind of “economic policy” can you have in a country where the National Legislative spends upwards of $800m without audits? And the security agencies NSA/EPS are the “official conduits” for the wholesale looting of the Liberian treasury. What will another IMF-ECF do for Liberia with a president whose only “economic policy” is to go to abroad and beg for money?

Not one can predict the future. But with a little help from the past, we can have a glimpse of the future. From Mr. Boakai’s past, we see the PL-480 US-Liberia foreign aid disaster. From Mr. Boakai’s past we see concession deals disaster exposed by the Moore Stephens audit. Even contemporary history shows Mr. Boakai’s US $80m “yellow-machine gentleman-agreement” disaster. These economists from heaven would do well to read Liberia’s history – especially the one involving the current charlatan of a president. This will be as helpful as the “time series and regression analyses” – probably more so. Putting more money (i.e., credit) in the current GOL corruption-plagued “rabbit hole” may be an economic policy “made in heaven”, but on earth and in Liberia, it is a disaster waiting to happen. Right now, the KLEPTOCRATS calling the shots in Monrovia are salivating. Look, I have never been one to believe in miracles. I’m only human, so it’s equally possible I could be wrong. Perhaps these heavenly economists, with their Midas touch, can actually do the trick. Lord knows I wish to be proven wrong. Oh, how I wish to be proven wrong!

Penned in Bloomington, Minnesota, USA on 09.22.2024

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[1] CBL, 2023, Annual Report 2023, p. 58

[2] The World Bank (2022), Debt Sustainability Analyses Under the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries (LIC-DSF), accessed on 09.21.2024 https://www.worldbank.org/en/programs/debt-toolkit/dsa

[3] William Summers, 2024, salary date (last updated, July 2022). https://politicalsalaries.com/legislators/, accessed on 21 September 2024

[4] https://jakartaglobe.id/news/jokowi-one-lowest-paid-state-leaders-g20-countries

[5] Jeremiah Koung, 2024, Official Assets Disclosure

[6] Jeremiah Koung, 2024, Official Assets Disclosure

[7] LIGIS Liberia, 2022, Liberia population and Housing Census, p. 54

[8] Central Bank of Liberia, 2023, Annual Report, p.40

[9] Special Drawing Rights, a kind of IMF benchmark currency

[10] IMF Communications Department, 2024, Liberia: IMF Reaches Staff-Level Agreement on a New 40-Month Extended Credit Facility Arrangement