Report Liberian bank ordered 3 times money authorized

Liberia: U.S. Report on Missing Billion Local Banknotes Out - Points to Discrepancies in CBL System

Liberia: U.S. Report on Missing Billion Local Banknotes Out - Points to Discrepancies in CBL System

The Liberian government and the U.S. Embassy in Monrovia, among others, had commissioned the probe by the U.S. -based firm Kroll Associates following reports in August that about $100 million had disappeared - an amount equal to almost 5 percent of the West African country's GDP.

Liberians had been eagerly awaiting the report. Charles Sirleaf, a deputy at the Central Bank of Liberia, has denied any wrongdoing.

The report also revealed that the approach taken by the CBL to implement the government's US$25 million mop-up exercise to stabilize the economy had the potential for misappropriation of funds, potential opportunities for money laundering, and potential execution of transactions with illegal businesses, thus leaving the government with a risk of having huge funds unaccounted for by the Central Bank. The CBL did not provide the Legislature with details of the quantity and denominations of the new banknotes prior to the printing and shipping of new banknotes.

However, Kroll has established that the CBL entered into a contract with Crane AB on May 6, 2016 to print new banknotes totaling LRD 5.0 billion: eleven days prior to the CBL receiving full Legislature approval to print new banknotes.

Liberia's central bank illegally ordered three times the number of bank notes it had been authorized to print - and now can't properly account for a lot of them, according to findings of an external investigation released Thursday.

What did the report find?

It said the CBL also entered into a second contract with Crane AB to print additional L$10 billion in new banknotes in 2017, but without approval from the legislature.

The son of Liberia's former president Ellen Johnson Sirleaf was one of two central bank officials detained on Thursday after the release of reports detailing widespread alleged malpractice at the regulator in a currency scandal that has gripped the nation.

The banknotes were ordered before President George Weah came to power in 2018, but critics say his government had a hand in the poor handling of the consignment of banknotes - an allegation the administration has denied.

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How much money was ordered?

The central bank did not immediately respond to a request for comment.

"CBL (Central Bank of Liberia) management subsequently explained to Kroll that due to the urgency for new banknotes, the CBL did not follow its own internal tendering policies for the procurement of Crane AB", the report says.

"Instead, a letter dated July 19, 2017 from Honorable Mildred Sayon, Chief Clerk of the House of Representatives, and Nanborlor Singbeh Sr., Secretary of the Senate, provided an instruction to the CBL to "...replace the legacy notes completely with newly printed banknotes" but with a clear caveat that the CBL provide the Legislature with details of the quantity and denominations of the new banknotes "...prior to the printing" of the new banknotes.

What has the response been?

It however identifies systemic and procedural weaknesses at the CBL and shortcomings in Liberia's fiscal and monetary management processes that are longstanding and continue to the present day.

Local media initially said some $100 million disappeared in a foreign shipment of bank notes.

It said that an investigation needs to be carried out into a separate $25m that was withdrawn from Liberia's Federal Reserve account in NY in July a year ago by Mr Weah's economic management team.

In addition to the arrest of Charles Sirleaf and Milton Weeks, another man, an official at the Central Bank, Dorbor Hagba, has also been arrested.

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