IPNEWS: Movement of Progressive Change, Political Leader, Simeon Freeman, says domestic revenue growth to support Liberia’s development agenda has never been a problem, however, ‘loose spending’ continues to be the major undermining effects for advancement.

Freeman stated that there are many government ministries and Agencies that continue to spend uncontrollably when they have no added value to the national budget.

The MPC made specific reference to the Ministry of State and the Office of the President (Special Presidential Project)

He said under the Budget Code 221806 Special Presidential Projects: Seven Hundred Thousand Dollars. That is under the allotment of Fourteen point something Million to the Ministry of State that is the flow of the expense.

“The Office of the President also has foreign travel means of travel. Typically, the Ministry of State takes care of the Office of the President. So we would have thought if you have an allotment under the Ministry of State for Eight Hundred and something Thousand for foreign travel but then you come under the Office of the President and you have for foreign travel means of travel you have another Eight Hundred and Sixty Nine Thousands.”

” So what that clearly shows us here it means that if you break down this Twenty Million there are some duplications right there. Clearly that is what we’re seeing. We also seeing here foreign travel daily subsistence: Three Hundred and Eighty Three Thousand One Forty Five.  Under the Ministry of State they have Four Hundred and Forty Thousand One Forty Four. What they are saying here to us is this other money under the Ministry of State – the Eight Hundred and Eighty Nine Thousand Eight Eighty Five that one is for employees of the Ministry of State only. The Four Hundred and Forty Thousand for foreign travel subsistence allowance you also have domestic travel One point Eight Million – that is for the Ministry of State alone, that’s what this document is saying. And now it has created another allotment under the Office of the President domestic travel means to travel Eight Hundred and Seventy Five Thousand Dollars.”

“But when you come under domestic travel for the Ministry of State you have One point Eight Million Dollars. Domestic travel daily subsistence allowance under the President Budget is Eight Hundred and Fifty Thousand Dollars. These are huge amounts of monies. And you have also Special Presidential Projects, with Budget Code 221806 under the Office of the President you have Seven Hundred Thousand. But then under the same Budget Code for the Ministry of State you have the same Seven Hundred Thousand. So in essence under Special Presidential Projects they place Seven Hundred Thousand dollars under the President Office and Seven Hundred Thousand dollars under the Ministry of State.” The MPC political leader averred.

See Full Transcript of The Simeon Freeman Show, Wednesday April 27, 2022

My name is Simeon Freeman political leader of the Movement for Progress Change (MPC). I want to apologize that we missed two of our shows. We really enjoyed your questions. If you have suggestions for us we will be delighted to hear from you. Tonight we will be doing a budget review. Now that we have started this budgetary review that has been very helpful to lot of you who have not been following the budget and the budgetary process. On the last show before this, we did a comparison between the 2011/2012 and 2021/2022 budgets and we able to share with you how there’s not been significant growth in capacity growth in revenue collection capacity but there has been aggressive growth in our expenditure curves. And we did some comparisons with major institutions at the time what they were using and what is being used now, what is being expended now. What each of them are expending now. We also have been able to do a review during the period of the show of what quantity of money being spent on certain major public institutions that provide services and needs to the public. We are talking about the Police, the Fire Service, the DEA; we are looking at all these institutions and comparing the budget with that of other institutions that are not so relevant but obviously extract or take away a major share of the national cake.

So tonight we … based on a question that was asked by one of our callers on three shows ago, we’ve done the our research and we’re looking at the Office of the President and the Ministry of State budget which totally amounts to a total of 20,324,844.00 United States Dollars. We want to share knowledge and appreciate exactly the discovery that has been made and some of the duplications we’ve seen and some of the suggestions we’ve made to the current government and encouraging them to take steps, to look at certain areas and spend money in certain areas that will add value to us in a significant way. We’ve always said Liberia does not have a revenue problem. Our problem is not the money we collect, the money we collect is small but it is not small but if we spend that money wisely we’ll be able to get more. However whatever moneys we collect what we do is spend them loosely and so as a result because we spend them loosely they undermine our revenue collection capacity the succeeding year. If you have a shop say, you collected 500,000 Liberian dollars on the shop, you took all that money you spent it on buying clothes, fixing your hair or even if you are a man or women fixing your hair on makeup or on food, there will be not enough money the succeeding year to go into the shop. But if you spend 50% of that money on reinvesting in the shop, what’s going to happen? The shop expands.

The way we spend money in Liberia is, we collect the money from the budget … the source that gives the Government of Liberia the money we abandon the source. We don’t spend much money back in the economy in terms of creating possible growth. And I think in many respects we forget. The few foreigners that import frozen food – fish, chicken eggs, chicken, butter, oil and all these things… These are foreigners, people that bring building materials a lot of them are foreigners. They feel comfortable hiring foreigners and the jobs that are available to Liberians at that level is basically nothing to write home about. And so in every respect, even though they may pay significant taxes in terms of input duty, every time they bring in input duty we collect hundred plus millions of dollars from the port from input duty but it does not have the circulative effect because when they sell they are the biggest beneficiary of sales. It does not filter through a salary chain, most of the people they pay are foreigners and that money goes out of the country. However in many developed countries the government spends money on the private sector ensuring that there’s growth and that growth will guarantee a sustained income the succeeding year. So that is precisely what they do. And that’s why when you look at other development economies; take America for an America, they have up to 95% of the businesses in America are small businesses. Even if we wanted to lean heavily on manufacturing like China and we say ok look the government of Liberia in every year is going to spend a 100 million dollars or say 50 million dollars on creating value, doing value addition several things will be impacted.  The first thing that will be impacted 1: will be whatever we consume will be locally produced and that reduce our exposure – exposure meaning that will reduce our needs for US dollars to import more goods. Because then we will be buying the goods locally using Liberian dollars which strengthens our currency. Yes the manufacturer will need a few things to add to whatever local resources he is using to produce but because he is producing locally and bulk of the raw materials are sourced locally the few that he has to input out of the country will not be significant enough to give us that wide trade balance that we have right now. If we are producing lot of things, we can produce lot of things – toothpaste, water, salt, sugar, starch spray, cassava product, flour, corn, glue, vegetables and lots of things. These things can be produced locally and if we have invested in scores of industries that is something that I want to take over as President of Liberia and spearhead. Produce massively so that a lot of our people have jobs domestically. In that way I am going to get income tax, corporate income tax and General Service Tax (GST) of those investments and the money will be paid back to the government anyway through the banking sector, precisely through the Central Bank of Liberia. These mechanisms are working in other countries and they are not something that is dreamt of, like somebody got up from their sleep and realized that they were rich but they got back to earth realized that they were poor. Things are happening in other countries and we can do it in our country. Without much I do let me go straight into the dynamics of the budget that has to do with the Office of the President.

Flashback: President Weah being sashed back in 2018 during his inauguration

The National Budget

Somebody asked me a question last week talking about the Seven Hundred and Eighty Five Million United States Dollars (US$785,000,000) that the government of Liberia says it is collecting. Are they collecting the money from the economy? I will say no. The government of Liberia is not collecting Seven Hundred and Eighty Five Million United States Dollars (US$785,000,000), that is the budget. What the Government of Liberia did was to ask nongovernmental institutions – let say institution like USAID and some of these institutions. They will ask USAID say, how much money are you spending in Liberia this year on education? Say for an example USAID comes and say we are going to spend Seventy Five Million United States Dollars (US$75,000,000.00) in Liberia this year on education and related services; then the government goes to say, Save The Children for an example say, how much are you going to be spending this year? Save the Children says this year we are going to be spending Twenty Five Million Dollars (US$25,000,000.00), so the government captures that money that is why you see it is reflected under grants. That grant means that it not money that is being given to the government of Liberia. A portion of it is given as part of the road construction – the Roberts International Airport road portion of that money is grant, portion is loan. We are borrowing Forty Five Million Dollars (US$45,000,000.00) from multiple sources to help fund that money that is the Government of Liberia. So even the US$45,000,000 that is being borrowed is part of the Seven Hundred and Eighty Five Million Dollars (US$785,000,000). So the One Hundred of Forty Five Million Dollars (US$145,000,000.00) that will be given as a grant – they are not giving that money to the Government of Liberia most of those institutions are spending in this economy and they will have impact on outcomes – meaning impact on education, impact on different things. So they have presented what they will spend for the year to the Government of Liberia and the government has captured that in the budget. Even if you look in the Budget footnotes is clearly written there as explained by the Government of Liberia. So the Seven Hundred and Eighty Five Million Dollars (US$785,000,000) is not revenue that is collected.

Somebody asked something else very important about non-tax revenue. The non-tax revenue is also money paid by the people of Liberia. NPA is not operating in space it is operating in Liberia. LPRC is not operating is space it is operating in Liberia. Whatever LPRC charges the people who ran the tank farms and the different charges is that money LPRC collects and give the government’s share, and uses some to operate. So it is not that is not coming from taxation but the way the government reflected it and they give that name to reflect institutional giving and I think they should change that name from non-tax revenue to public institution support to the budget because it is taxation. If you use the port you pay, you bring in things you pay. That charge is also passed on in terms of cost of goods that the people pay for. So clearly is it taxes as well that are collected. So I thought to provide some of those clarity in regards to the question asked by people who follow my show. I hope we have answered those questions.

The Office of the President Budget

Now we go straight into the Office of the President Budget. The budget for the Ministry of State for Presidential Affairs and the Office of the President put together comes to Twenty Million Three Hundred and Twenty Four Thousand Eight Hundred and Forty Four (US$20,324,844.00). If you ask me I would tell you the money is too much. So let’s go into it. So the Office of the President is Five Million Nine Hundred and Fifty Three Thousand Dollars (US$5,953,000.00). The Ministry of State for Presidential Affairs and other institutions like – the Minister of State without Portfolio, you have the National Security Council Secretariat, the Presidential Advisory Board, the Public Affairs, and Communications so you are talking about the Press Secretary to the President. They all have their own budgets and all of that you put it together it comes to Twenty Million Three Hundred and Twenty Four Thousand Eight Hundred and Forty Four (US$20,324,844.00).

President George Weah – His office alone is allotted US$5,900,000.00 in the budget

But there are specific discoveries that we will look at. Under budget code 0008 renovation of the Executive Mansion under the Public Sector Project, they are spending Four Million Dollars (US$4,000,000.00) in this year budget to renovate the Executive Mansion again. They also have the Invincible Sports Park. The Sport Park that was opened was funded in last year budget is also funded in this year budget by Five Hundred Thousand Dollars (US$500,000.00). Then you have the humanitarian outreach of the President which is an issue of duplication that we will look at is Seven Hundred Thousand Dollars (US$700,000.00). So the budget code for humanitarian outreach for the President is 1020 in the budget. So what they’ve done in the budget is they divided it into codes for easy tracking and for allocation purposes. So it is easy to be able to track where that money is coming from during expenditure process at the Ministry of Finance. And it is also easy for auditing purposes, also easier for budgeting purposes. The money is in bulk but to know which amount of money was allotted where and for what.

So we go on. Just the Office of the President is Five Million Nine Hundred Thousand Dollars. (US$5,900,000.00). The rest of the institutions inclusive of the Ministry of State is Fourteen point something million which brings it to Twenty Million Three Hundred and Twenty Four Thousand Eight Hundred and Forty Four (US$20,324,844.00). So let’s open these budgets why they are so large and what’s in it? Compensation for employees, so basic salaries for civil servants at the Ministry of State for Presidential Affairs and the related institutions advisory board to the president and all these things is Three Million Seven Hundred Ninety Three Thousand Four Hundred Dollars (US$3,793,400.00).  Under budget code 2101 basic civil servants salary is Three Million Seven Hundred Ninety Three Thousand Four Hundred Dollars (US$3,793,400.00).

So what makes up this budget? Then they have code 22 the use of goods of services under the Ministry of State. They have a total of Ten Million Seven Hundred and Sixty Seven Five Hundred Fifty Four. Now let’s look at the breakdown. Under the Ministry of State, we have here Eight Hundred Eighty Nine Thousand Eight Hundred and Eighty Five Dollars for foreign travel means of travel. So what the government of Liberia has allotted for the year is Eight Hundred Eighty Nine Thousand Eight Hundred and Eighty Five Dollars which is just about hundred and something thousand shy of the support to the National Fire Service which gets One point Two Million dollars for the whole year. So for people to travel from the Ministry of State, I don’t know what they are traveling for because they don’t help with revenue but they have Eight Hundred Eighty Nine Thousand Eight Hundred and Eighty Five Dollars. Then foreign travel daily subsistence allowance they get Four Hundred Forty Thousand One Hundred and Forty Five Dollars. Don’t forget the DEA gets Four Hundred Twenty Six Thousand Dollars for the whole year. The domestic travel daily subsistence allowance One Million Eighty Hundred and Forty Five Thousand Dollars. So for people from the Ministry of State to travel domestically in Liberia they are getting One point Eight Million US Dollars that is too massive, and that is under Budget Code 221105.

The Ministry of State and Presidential Affairs and the Office of the President combined are allotted US$20,324,844.00 in the 2022/2021 budget

I want to jump to Budget Code 221806 Special Presidential Projects: Seven Hundred Thousand Dollars. That is under the allotment of Fourteen point something Million to the Ministry of State that is the flow of the expense. But let’s go to the Office of the President. The Office of the President also has foreign travel means of travel. Typically, the Ministry of State takes care of the Office of the President. So we would have thought if you have an allotment under the Ministry of State for Eight Hundred and something Thousand for foreign travel but then you come under the Office of the President and you have for foreign travel means of travel you have another Eight Hundred and Sixty Nine Thousands. So what that clearly shows us here it means that if you break down this Twenty Million there are some duplications right there. Clearly that is what we’re seeing. We also seeing here foreign travel daily subsistence: Three Hundred and Eighty Three Thousand One Forty Five.  Under the Ministry of State they have Four Hundred and Forty Thousand One Forty Four. What they are saying here to us is this other money under the Ministry of State – the Eight Hundred and Eighty Nine Thousand Eight Eighty Five that one is for employees of the Ministry of State only. The Four Hundred and Forty Thousand for foreign travel subsistence allowance you also have domestic travel One point Eight Million – that is for the Ministry of State alone, that’s what this document is saying. And now it has created another allotment under the Office of the President domestic travel means to travel Eight Hundred and Seventy Five Thousand Dollars. But when you come under domestic travel for the Ministry of State you have One point Eight Million Dollars. Domestic travel daily subsistence allowance under the President Budget is Eight Hundred and Fifty Thousand Dollars. These are huge amounts of monies. And you have also Special Presidential Projects, with Budget Code 221806 under the Office of the President you have Seven Hundred Thousand. But then under the same Budget Code for the Ministry of State you have the same Seven Hundred Thousand. So in essence under Special Presidential Projects they place Seven Hundred Thousand dollars under the President Office and Seven Hundred Thousand dollars under the Ministry of State. What the budget does it gives you the key figure and then it breaks down the figure in terms of the different items that is consuming this money. What exactly is consuming this money? Don’t also forget under the Public Sector Investment Project (PSIP) the budget is divided into two major parts – where they have the Recurrent – that means the money they spend every time on different things and they also have PSIP, so the different projects that the government take and say it’s for the public say we are investing for the good of the public. The Executive Mansion is under there and it is getting Four Million dollars for renovation. The Invincible Sports Park is getting Five Hundred Thousand dollars. The humanitarian outreach gets about Seven Hundred Thousand dollars hidden under this budget as well.

The Invincible Sports Park has been allotted US$500,000.00 twice in President Weah’s budget

But the irony is there is no beds at JFK hospital. People get sick and go to JFK and they are told there no beds – that’s the largest referral hospital that we have in Liberia. The Redemption Hospital there is nothing to even talk about, the Benson Hospital there is nothing to even talk about. But we have these large allotments allotted to this public institutions – the Office of the President, the Ministry State, in a poor country like Liberia how can we allot One Million Eight Hundred and Forty Five Thousand for Domestic Travel Daily Subsistence Allowance? How can we? So what we are saying in short is that this Five point Two Million allotted to the Office of the President just he alone for his domestic travels – he spends Eight Hundred and Seventy Five Thousand dollars a year, divided by twelve, he is spending Seventy Two Thousand dollars a month on the President’s domestic travel. Let me break it down further. The allowance for the Office of the President – don’t forget the Executive Protection Service has an annual budget of about Ten Million dollars which is different from what has been allotted to the President. What do we have here? Eight Hundred and Seventy Thousand Dollars divided by twelve months it is about Seventy Thousand Dollars a month for domestic travel subsistence allowance which translates to Eight Hundred and Fifty Thousand dollars. So that means if the President decides and say he wants to reduce his traveling allowance to say Two Hundred Thousand dollars which will be reasonable we will have about Six Hundred and Fifty Thousand dollars to provide beds for JFK hospital and for all of the related hospitals across Monrovia, across Liberia.

The JFK Memorial Hospital Liberia’s biggest referral health facility and other health facilities in Liberia could benefit if the President Office and the Ministry of State for Presidential Affairs budget is reduced reasonably 

We go further to the President’s Budget. The President did his last county tour he has not done one again. Now if the President says well look in the cause of the people what we are going to do is we are going to reduce this Eight Hundred and Seventy Five Thousand dollars to about Two Hundred Thousand dollars or Two Hundred and Fifty Thousand dollars and rest of the money will be used to capacitate hospitals across the country we would have mobilize more than One point something million dollars to assist hospitals across the country. Let’s go further. Foreign Travels and Means of Travels. You already have a large amount of money situated under the Ministry of State which is Eight Hundred and Eighty Nine Thousand Eight Hundred Eighty Five dollars for foreign travel which takes care of the Office of the President. So in our mind we believe the foreign travel and daily subsistence allowance amount which is another Four Hundred and Forty Thousand put together is about One point Three Million. We believe let takes domestic travel subsistence is One point Eight Million, if you add all this is about Three Million One Hundred and Seventy Thousand. We are going be nothing but during travel we will be giving allowance and daily subsistence to public officials at the Ministry of State and the Office of the President. Look, if we decided to focus on health with this money and decided to take Two point Five Million out of this money to focus on health it is going to do a lot. Even If we decided look we wanted to spend say, Twenty Thousand dollars to build one house and we decided to build houses with a lot of this money; let me take Two point Five Million out this money divided by Twenty Thousand to build a two-bed room house we can build a One Hundred Twenty Five homes estate. My desire to be President as I said is not to come and criticize but to look at the issues, to come and look at the issues and say Mr. President these are some of the areas you may not have had the time to look at the budget thoroughly like we have, what you do Mr. President you can look at this budget and make amendments and say look we didn’t know that and now that we know it what we will be going to do is we are going to take this money and spend on key sectors that will help our people.

When I am president under my administration what we want to do as president is to refocus our strategy to the sectors that matter – to create jobs. Like I kept saying jobs, jobs. It is about redirecting resources that is our goal as president and not about spending money and wasting resources. We think the issues in Liberia are strong, huge and chronic but if we have these kinds of discussions.

There is something called the budget performance report. So what the performance report is supposed to do? So the budget is underestimate say I collect five dollars from here I will collect ten dollars from there. Now at the end of the period you probably collected or you did not. If you collected the money that means all of the areas where you say you will spend x amount of moneys you must spent it. If you did not spend it all of these things are supposed to be reflected in the budget performance report to say ok and that’s something the Legislature is supposed to demand before the new budget is passed where that budget performance report will be open and will be reviewed. You allotted Twenty Million Dollars to the Ministry of State for example. Was it spent in this other area – domestic travel was it spent if it was not spent where is that money, where is that projection? Can we move it back to the succeeding year? So that supposed to be reflected in the budget performance report which is an important instrument that we are not following under the Public Finance Management law. You the people I will encourage you to begin to talk about that. However now that you know they will soon be passing another budget in July this year because this budget will terminate in July where they will pass the 2022/2023 budget and in every respect they need to provide budget performance report so that we can look at the indicators.

Many of you are much younger today. I can hear you talk about Ghana, Ghana, Ghana. Go back in history in the 80s Ghana was a frame. Ghana was like a starving human being. What happens today they have found their bearings. We just need the right leadership infrastructure in Liberia and will be able to change our country. We want to encourage you for following our show and please encourage more people to follow us as well. Thank you so much for following. And we want to bless God for Liberia. Our country is not a hopeless case; There are countries who have been far worse than us. Rwanda far worse than us but have been able to pick up, Ghana far worse than us, Nigeria was a worse case. Today Nigeria is a net exporter of rice and not a net importer of rice. They through their Central Bank have invested Billions of Naira and today they no longer spend the Twenty Billion they used to spend to import rice. This is not impossible for Liberia to do this once we have the right leadership structure in place in our country. Thank you.