What we see happening at various banks in Liberia today tells us that poverty will remain sustained instead of a post-war economic growth. This assertion is based on observation that there is constant unaccountable leakage of cash from the banks without proper investigation by requisite authorities of the Government of Liberia. It is indeed government’s responsibility to prosecute cases arising from unscrupulous deeds at commercial banks operating in the country but, regrettably cases that have been unearthed by the media appear to be pacified.
By constitutional provision, if not statute, the Central Bank of Liberia is the regulatory arm responsible for monitoring and evaluating the functions of commercial banks and must put in place proper mechanisms to safeguard customers’ savings. But sad to say that if Liberians do not seek the welfare of their own country, the current poverty rate will increase because individuals will transfer cash from Liberia based on the “me, myself and I” interest legacy.
Well, the question now is why the Liberian Government is not properly investigating these cases to serve as a deterrent to other would-be exploitive institutions instead of playing a low profile attitude the public seems to observe? It is better that Liberians begin to rethink that this is their country because as the saying goes: “no one will cry more than the bereaved”.
It would be a misjudgment to conclude that the Central bank of Liberia is not working, however, the CBL needs to step up a vigorous investigative campaign about alleged unscrupulous interactions some commercial banks are being linked to, aimed at saving the Liberian Economy. With the increase in the illegal transfers or disappearances of cash from various banking institutions through invisible hands, there is no argument that little profits that should be earned from these institutions to pay employees at the end of the year as bonuses, or reinvested through whatever means by shareholders are walking out of the banks thereby creating losses that could further harness hardship and undermine the economy.
Here are reasons why I think what is unfolding in the banking sector needs to be discussed in the context of making requisite authorities to take a definite stand to act now before it gets too late. 1) If left unchecked, the economy will experience a downward trend because these illegal transfers or disappearances of huge sums of money from these banks would create the condition thereby incomes for employees will reduce and taxes will not be paid to government; hence shareholders will not receive their full earning per share as goods and services produced will not be purchased as required. It is inarguable that with such bad commercial financial practices, the Liberian Economy would once again be in shamble.
Again, looking at the number of banks operating in Liberia from different perspectives, there is foreign management domination in my opinion, without checks and balances. The Central Bank must save the Liberian Economy from deficiency that one sees the country gradually but surely being drawn into given the prevailing situation at hand.
Customers must begin to understand the role of the CBL as a means of regaining confidence within the banking sector. But as things stand now, customers seem to be afraid of banking activities because there appears to be frauds everywhere in the sector. Where now do customers go for trust and reliability if these measures are not put in place?
Due to the high rate of illiteracy in Liberia, it is important that many customers who may not understand the economic implications regarding this deficiency will begin to rethink from a better prospective. However, let’s take a look at banking activities a few years ago, when there was prestige in banking as many banks were not available. Of course, the presence of many banks in post-war Liberia has drawn attention to competition in the sector. Yet, banks were more credible in the past; even though they were few and could meet the demands of people everywhere.
So true, the heart beat of the economy is the banking sector where funds are received from depositors and used to finance activities, as well as to earn interest from lending and pay interest to depositors. In any case, the CBL has done a lot to improve the economy, but if immediate steps to safeguard depositor’s interest at the moment are ignored, the hard work done over the years may prove futile.
Therefore, it is expedient to suggest the following: a)That the activities of functioning commercial institutions be properly monitored ; b)That foreign banks are controlled by foreign Chief Executive Officers; c)That positions are properly monitored by CBL and Labor Ministry which will involve foreign and Liberian control for check and balance; d)That positions available for Liberians be occupied by Liberians aimed at reducing unemployment rate and protecting the country from financial malpractices; e)That monitoring is done by Liberians who have interest in Liberia; and f) That the CBL takes necessary measures to thoroughly investigate commercial banks’ operations in the post-war country as revamping our economy cannot be overemphasized.
Indeed, it is time that Liberians wake up from their slumber and devote more time and interest in Liberia because whatever happens to the country happens to all Liberians. If the economy grows the effect will be felt by all and if it falls the same impact will be felt. The growth of the economy provides job opportunities which are beneficial to both employees and government through income and taxes generation .Obviously since the core target of business is to maximize profits, investors/shareholders will also be happy while earning profit than loss. It is therefore necessary that Investors protect Liberia as it strives to protect your interest.
With the necessary mechanisms put in place by CBL based on these instances in the banking sector, the banking environment will become healthier due to accountability and reliability and the institutions will not take Liberia for a training ground, simply because of the high rate of illiteracy the country is faced with.
No one can negate the fact that the role of the CBL is greater in regulating commercial banks. It must therefore come down hard on all commercial banks to adhere to banking regulations without fear or favor. From all of the latest developments propounded in this article, the CBL should now come up with improved regulations for sustainability of those institutions in order to maintain the growth of the Liberian Economy.