MONROVIA – November 05, 2019:The attention of the Central Bank of Liberia (CBL) is drawn to media reports that the CBL is planning massive redundancies, to the tone of 400 staff members – something that would amount to more than 50% of all its employees. This story, first reported in the Frontpage Africa Newspaper on Friday, 1 November 2019, has the potential of sowing discontent at the Bank and within the wider society and, in so doing, undermine the recent hard work by a renewed and re-invigorated CBL Board of Governors to enhance the credibility of the Bank as the Monetary Authority of the Country.
CBL, like other public sector organizations, is implementing an austerity program that will qualify the Government of Liberia for an IMF-Supported Program, which is critical to the country’s economic recovery in the medium term. However, nowhere is CBL planning to lay-off more than half of its entire human resources. Admittedly, the current level of CBL staffing is unsustainable, but the final figure, which is yet to be decided by the Board of Governors, is not likely to exceed 10% of its wage bill and that most of the expectedly redundant staff could be considered under a contractual arrangement.
While the ongoing negotiation is in an advanced stage, there are still issues to be concluded between the IMF staff and the Government, of which the CBL is an important player.
The austerity program that CBL is currently implementing was necessitated by several years of deficit financing, going as far back as several past administrations. More than this, CBL austerity program involves more than just laying off staff. It also includes other components of the budget. It is important to also note that the proposed budget cut of the Bank is intended to strengthen the financial position of the Bank to enable it effectively perform its primary function of ensuring both monetary and financial stability.
It is hoped that the above austerity measures will bring CBL operating expenditure under control by 2020, making it unnecessary for the institution to resort to the use of its reserves for deficit financing.