Monrovia, Liberia - Liberia’s Finance and Development Planning Minister, Hon. Samuel D. Tweah Jr., says the new fiscal calendar will bring the country into alignment with the Economic Community of West African States (ECOWAS) member countries. He said that this transitioning is important due to the fact that the sub-regional group is transitioning into a single currency.
Hon. Tweah spoke at the official launch of the Special Budget Preparation for FY2021, on Monday, October 26, 2020, at the Ministerial Complex in Congo Town.
“Today we are here to launch the national budget processes for transitioning to the new fiscal calendar of the national budget as prescribed by the law of the Republic of Liberia” he added.
In 2018, the National Legislature enacted the Amendment and Restatement of the Public Financial Management Act of 2009. In Section 4.16 of this revised PFM Act, the National Legislature defined the new fiscal year to run from January to December.
He commended Dr. George Manneh Weah, and members of the National Legislature for revising the PFM law that now makes this transition to the new budget calendar possible. He thanked the Cabinet for endorsing the law. Such endorsement, he added, demonstrates the Cabinet’s commitment to ensure the law’s full implementation.
He also thanked the Deputy Minister of Budget at the MFDP, Mrs. Tanneh Brunson, and other Deputy Ministers and staff of the Ministry of Finance and Development for commencing the process to bring the revised law into action, noting that “A law is only as good as its execution. Mrs. Brunson, I must hasten to say that you have your work cut out for you in the next several months and I wish you all the best”.
Under the current regime, the President is constitutionally mandated to report revenue and expenditure figures spanning January to December of the previous calendar year, and this previous calendar year is always the sum of two fiscal years, half of the previous fiscal year and another half of a current fiscal year.
And this, according to the Finance Minister, is not ideal since two fiscal years may have different policy considerations that may inform revenue and expenditure patterns. He said the under the new system, it will be important for the President of the Republic to report the numbers consistent with policy implications accruing under one fiscal year.
ECOWAS has repeatedly flagged Liberia’s July to June fiscal year as a serious problem that had to be remedied for purposes of achieving symmetry in the multiple processes being pursued under disparate ECOWAS protocols; with the launch of the new budget calendar, the country has formally begun the journey to put an end to these complaints and to achieve the long-desired symmetrically.
It is also expected that change will align with the fiscal year of the Central Bank of Liberia, which runs a January December calendar.
Moreover, the current arrangement states the budget must be submitted by the end of April, giving Legislators three months to consider the budget before June 30.
He maintained that the “analogous” process will require that the budget is submitted by the end of September, giving the Legislature October to December to consider passage, meaning also Legislators would probably and practically be required to change their legislative calendar.
The Minister asserted that this is a huge issue that requires serious engagement and the President has shown strong willingness to lead this engagement with the Lawmakers.
He pointed out that another risk is that the policy change demands greater levels of work at a time Liberians are preparing to enter into the holiday season, adding that this will require a shift in cultural pattern of work within and across the Government.
Furthermore, he indicated that in order to pass the current budget, extraordinary work had to be undertaken in the three months after the end of the budget year, and if similar things were to happen under the new fiscal calendar, people would have to be overworking for the Christmas season.
By avoiding this outcome, staff across Government would have zero margins for error and the budget calendar would have to assume an almost religious dedication to avoid heavy work during the Christmas season he explained.
Section 65.2 of the revised PFM Act states that in order to implement this change, “there shall be a special budget implemented by the Legislature for a six month period to facilitate the change in the fiscal year; the special budget shall be prepared to cover estimates beginning on the first day of July 2018 and ending on the 31st day of December 2018. So according to this revised PFM Act we are already two years behind.
Revealing further, he said the six-month budget will now have to be prepared for July to December of 2021. And in July of 2021, the country will have a six-month budget, and concurrent to that, preparation should begin to submit the January-December 2022 budget to the National Legislature by September of 2021.
He expressed optimism that the government can deliver on these changes in the months ahead, urging relevant staff across line Ministries and Agencies and across branches of Government to commit to the rigorous schedules.