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Usually, we are tempted to believe – to our own peril – that when we are on our “high horse,” the many praise singers we see are indeed admirers and “loyal foot soldiers.” We think that we have arrived and everything has changed. We think we are the messiah that they have been waiting for. At least, they make us feel that way. These praise singers will tell us all the nasty things about those who were on the high horse before us. What we fail to realize, and again to our own peril, is that those praise singers who are stepping on our predecessors today have been around for many years and have sang praises to others just as they are doing to us today. The reason why we don’t realize that they will soon be stepping on us as they are on our predecessors is mind boggling. Maybe we even believe that we are better and smarter than all our predecessors put together.

This is why I believe that before we deceive ourselves into thinking that we are better than those who came before us, let’s try falling and see how the praise singers will treat us. My proposition is that, even if you will fake it, FALL. It is important in life and in politics to FALL. By falling, you will have the benefit of being alive to see how deceptive men are. You may be surprised that even those who were singing your praises were probably plotting your FALL. Even if they weren’t part of the plot, you will soon see them run to the new rider of the “high horse” and begin doing what they do best: stepping on your fallen body. Don’t let them do it to your grave.

On the ‘high horse,” people even tell you that you are better than your boss. That it will soon be your time to become President or Minister or whatever else is higher. And if you close your circle to only those careered praise singers, you soon start behaving like there is no bottom or there is no down. For everything that rises, there is a sure but eventual fall. It is the law of gravity. Others were there before you; and others will have to occupy that post and so it goes without saying that you will have to vacate. One day!

But in order that you are balanced and not deceived, try to FALL or fake one just so that you know and understand men. Remember what was done to Jesus, the Christ! One moment ‘they’ sang His praises and the other, ‘they’ chanted that He be crucified. ‘They’ were the same people.

Or you can learn from the FALLs of others and be careful. You should always be aware that we will all get down from the “high horse.” Some of us may slip and fall; others maybe pushed; and still others just by the law of gravity. In any case, ‘they’ will be there to malign us, And people may believe them (not trust them) because they were close to you.

Please take a moment to fake a fall so you can learn…

Every time I look back at the 10 years I spend in public service in Liberia, I always wondered whether I was able to live up to what I promised myself: that I would do everything within my human capability to keep the friends that I had before rising to any level of prominence. I said to myself that I should never let power or authority get into my head that I am unable to relate to my friends or begin to treat them like ‘subordinates’ or any lesser status.

My thought was that these are the people I sat in classes with or played marble (pee) or football with and so it would feel too unnatural or nonsensical to treat them differently simply because I wear a certain title or hold a certain position.

I remember very clearly when Bill Clinton indicated that one of the most difficult aspects of leadership was keeping the friends you had before rising to that level. And this is extremely important because those friends are the ones, if you keep them as friends, who can tell you the truth. They are the ones who can say Jimmy (JFK or Kollie), “you are screwing up.” They can tell you that the statement you made was out of place; or that the decision to do a certain thing was not proper; or the decision to not do certain thing was poor judgment.

Because we all do screw up every now and then, it is important that we have these ‘friends’ who can frankly tell us our errors or mistakes or shortcomings without being afraid of ‘repercussions.’

The moment we start to play ‘boss’ with our ‘friends’ to the point where they are afraid to speak truth to us; it means that we are on our way to destruction. When we start to remind our ‘friends’ of who we are (by our title), then you know that we are doomed.

The new friends we make when we are in power, may not tell us our shortcomings or faults because they want to make sure they continue to enjoy the access and benefits. The only people we can trust or count on are those who knew us when we were nothing. In most cases, they want the best for us because we were friends before the power divide came and they might just want to continue to be our friends. But if we terrify them by asking them if they know who we are then we will destroy ourselves.

With all these in mind, I got up every morning praying that I didn’t treat any of my friends in such a manner. I really do hope I kept that promise. And if I didn’t, I want to apologize in this public manner. If power got the worse of me and made me to throw away 30 0r 40 years of friendship, I am deeply sorry. It was never my conscious intention. All I wanted was for us to continue to be friends. I knew the position would come to an end and wanted to still have my friends when the that came.

I may not have been able to give whatever you asked for, but I did not intend to disrespect you or throw away our friendship. If you worked with me in any of the capacities I served over the last 10 years, I hope I never asked you whether you knew who I was. If I ever did that, I am so sorry.

Based on my shortcomings, I want to honestly advice those who are either in leadership or aspiring, to be mindful of how they treat their friends. You need to remember the relationship you people had before you rose to prominence. Your friends can be your guard rail; they can save you from destruction or self-destruction.

 

This is not the speech ho! I am editing the speech. I always wanted to give that speech. I wrote it since 2014 and missed three (3) opportunities to have given it.

The West continues to terrify us about debt and especially debt from China even though many of them do borrow from China.

When the IMF comes, the conversation is always centered around DSA (debt sustainability analysis) and debt to GDP. We talked about “speed bump” and threshold.

They try to convince us that we can build our infrastructure from domestic resource mobilisation even though they can not point to any place on earth where that has happened.

Without the needed infrastructure, there is no way you can expand and grow your economy and by extention your tax base. All that DRM cliché is crap: it doesn’t work. It hasn’t worked anywhere.

In private sector, we use Other People Money (OPM) to create and deliver value and then we keep the profits. Even the richest people on earth still borrow money.

I decided to post a link so we can see the Debt to GDP ratio of some of the richest countries in the world and decide for ourselves.

Let’s borrow, build our infrastructure and improve the living conditions of our people and then worry about repayment later. That is what all the smart countries and people are doing.

Debt and who we borrow from are not the problems. What we do with the borrowed money is the problem.

https://tradingeconomics.com/country-list/government-debt-to-gdp

You see! They are all borrowing to keep moving on…

The West continues to terrify us about debt and especially debt from China even though many of them do borrow from China.

When the IMF comes, the conversation is always centered around DSA (debt sustainability analysis) and debt to GDP. We talked about “speed bump” and threshold.

They try to convince us that we can build our infrastructure from domestic resource mobilisation even though they can not point to any place on earth where that has happened.

Without the needed infrastructure, there is no way you can expand and grow your economy and by extention your tax base. All that DRM cliché is crap: it doesn’t work. It hasn’t worked anywhere.

In private sector, we use Other People Money (OPM) to create and deliver value and then we keep the profits. Even the richest people on earth still borrow money.

I decided to post a link so we can see the Debt to GDP ratio of some of the richest countries in the world and decide for ourselves.

Let’s borrow, build our infrastructure and improve the living conditions of our people and then worry about repayment later. That is what all the smart countries and people are doing.

Debt and who we borrow from are not the problems. What we do with the borrowed money is the problem.

https://tradingeconomics.com/country-list/government-debt-to-gdp

You see! They are all borrowing to keep moving on…

I have provided reflections on the conversations that I had with a friend, the non-economist, over the past few days and now I have decided to provide my own thoughts on what the next steps should be.

First, we have to print some money. There are no two ways about it. It is an imperative. We MUST increase the amount of Liberian Dollars in circulation, period.

The fact remains that the amount of currency in circulation is grossly inagequate to support an economy that is arguably about US$5 billion even though official statistics puts the GDP at US$3.4 billion.

I believe that the size of the informal sector makes the US$3.4 billion GDP to be severely understated and this why I am estimating that the true GDP is US$5 billion. The exact amount of currency to be printed will be based on the actual data that policy makers have in their possession. I am not privy to that number and the underlying justifications and assumptions.

However, from every data available in the public domain coupled with a general understanding of the economic situation, all indications point to a conclusion that unless we print additional currency, we might be heading for bigger economic woes.

I am not oblivious to the fact that there are explanations required about the previous printing of the L$16 billion currency. However, I am arguing that the lack of satisfactory explanation is no reason to argue that currencies should not be printed. What I believe policy makers should be more interested in is what mechanisms are being put in place to ensure that the “confusion” or whatever lapses there were, do not occur again. But to prevent the printing of currency will be equivalent to committing suicide. It will like proverbial “throwing the baby away with the bath water.”

Again, I m not arguing that printing of the currency will solve the problems. It is not a panacea! Printing of currency, while necessary, is not sufficient to deal with the economic problems we are faced with. However, there is no way we can solve the problems we have if we don’t print currency. Again, let me emphasise that printing will not solve the problems but not printing will amplify the problems.

For an estimated US$5 billion economy, we need the equivalence of approximately US$250 million (or L$50 billion) to support transactions within the economy.

However, printing L$50 billion alone will not be enough. I will encourage the introduction of various forms of currencies such as digital money (mobile money, mobile wallet, etc) and electronic payment systems. Additionally, the Central Bank will need to quickly implement a “payment switch” platform that will allow banks to talk to another seamlessly and support the movement of money from one account to another. This will enable folks to be able to move money from bank accounts to mobile wallets and it will also make it possible for businesses to accept various electronic payments directly into their bank accounts. If such platform exist, then the increased need for paper money will be severely diminished and we won’t be at this point anymore.

I am also aware that printing currency will bring about inflationary pressure and increase in exchange rates. The economists will have to devise mechanisms to handle these issues. However, I think opening up new sources of revenue or expanding existing sources of earning foreign exchange will be the necessary next step.

Now, to achieve anything will require doing some unorthodox things. By that I mean that some things that our traditional partners may not like. But if they really care about us, they won’t allow us to be in this situation, in the first place and so I guess we have to look out for ourselves.

I think we need to jump start logging in a big way especially as we approach the logging season (dry season). I believe that logging is the lowest hanging fruit in terms of raising big US$. I am not talking about selling fire extinguishers or license plates or work permits. I am talking about raising tens of millions of US$: exporting hundreds of cubic meters of logs. If not logging then what else?

We have iron ore and we have fish stock. It will take aleast 24 or 36 months to get any iron ore project off the ground; even Arcelor Mittal that is already in production.

On fisheries, we need to take some radical actions and forget about EU preconditions. Do we really have to sell fish to the EU market? There are about 513 million people in the EU. In China alone, there are about 1.4 billion people. So why the EU?

So I think we have choices before us but we have to bite the bullet and make them. However, we first need to start with authorizing the printing of currency while at the same time introducing the enabling policies and platforms to support alternative currencies or medium of exchange.

Once we have these in place then we have to move quickly for big revenue measures ;not those small ideas that add nothing.

There are also other things which we must do but I will talk about those later: national address system and national biometric identofication system. I have my thoughts…

After reviewing the various comments on the reasons that my friend (the non-economist) provided for why he thinks it is not implausible for vast amount of Liberian dollar banknotes to be out of the banking system thereby creating what appears to be a shortage of Liberian Dollars on the market, I went back to him to understand a little more and to get his thought on whether be believes that more currencies (banknotes) needed to be printed.

In our conversation, he opined that it might just be the case that the country needs to print more banknotes. However, he cautions that inflation might be a by-product of this printing exercise and so care will need to be taken. On the other hand, he argues that if the economy doesn’t have sufficient banknotes (money supply) to support economic activities then that is a problem and this just might be what the country is experiencing.

He says that no matter what country we are talking about, there MUST be a certain amount of currency in circulation to support economic activities. He argues that if Liberia’s GDP is approximately US$3.4 billion, it will need at least about 5% of that amount in currency to support economic activities. This means that there should be approximately L$34 billion to support an economy that size (5% of US$3.4 billion x L$200). Doesn’t seem to me like we have that much banknotes printed.

Still further, my friend said given that National Accounts Statistics is not well developed and the informal sector may not have been properly accounted for in the GDP figures, it is possible that your GDP is understated. And if that is the case, then it means that even L$34 billion (or US$170 million) is small to support your economy.

Now if we assume that he is right and that the GDP is close to US$5 billion then it means that at prevailing exchange rate (1 USD to 200 LD) the country needs about L$50 billion (or US$250 million) to support current level of economic activities.

He argued that if the country doesn’t have the required amount of currency to support economic activities then there is bound to be serious problems in the economy and this might just be what the country is experiencing.

He goes further to state that printing money will not necessarily solve the country’s currency problems but at least it will address the fundamental issue of the required amount of money supply needed to support the economy.

Once this proper level of money supply is achieved, he says that we have to find a way to digitize the economy and move into a more cashless economy so that we are able to perform business transactions without necessarily moving papers around.

I thought he made sense! Now, I will go back to him so we can talk about the digitalization of currencies to help support economic activities.

I didn’t say my friend was uneducated; I said he is not an economist.

Every time I have a conversation with my friend (the non-economist) about the shortage of Liberian dollars on the market, he tries to explain something to me but I am always dismissing him. He is not an economist; just an ordinary businessman. However, he tries every time to make this point and so I decided to pay some attention this time around.

I am not an economist by any definition. I consider myself a student of public policy. I am still learning and so I never turn down the opportunity to learn from anyone. In fact, I consider every moment as either a teachable or learning moment. I will either learn from or might teach someone. That is why I never shy away from debates no matter how sophisticated the other person is.

I know the economist love to talk about empirical evidence but as a student of policy (politics and economics), I believe that anecdotes have value in policy formulation.

My friend tells me that we have a population of approximately 5 million people. He says, let’s assume that about 1 million people (either petty traders, money changers, market women, large businesses, and some ordinary people) decide to keep at least the equivalent of US$100 on them as working capital so that they are able to buy food, pay children transportation to school, buy goods, change money, or just hold for emergency because they don’t want to run to the bank every time they need small money. He says if these assumptions are true and he fervently believes they are, then we have about L$20 billion (1 million people, each holding about L$20,000) in hands of people: outside the banking system.

Now, if the total money we have printed is approximately L$23 billon (old money plus new ones) then it is easy to understand to why there are no Liberian dollars in the banks. For him, this is how he sees the problem and he believes it is not unreasonable for people to hold some cash outside the banking system, for various reasons.

He goes further on the back of the envelop again to argue that if the economy has only about L$23 billion to support economic activities then we need to rethink becasue when the rate was L$80 or L$100 to 1 US$, that L$23 billion was approximately US$230 million. Today, that amount is approximately US$115 million. And because we run a highly dollarized economy, he is arguing that US$115 million cannot do what US$230 million used to do.

Well again, like I said, he is not an economist and neither am I but I thought he made some common sense and so I decided to reflect on it deeply.

 

A few weeks ago I talked about “systems theory.” I was intending to pontificate that unless every part (of the system) worked together rather than in silos, the possibility of achieving goals would be close to impossible. This theory is well documented and studied in business schools especially in the areas of organizational management and strategic planning.

For some strange reason, this morning my mind wondered to my 10th grade biology class in which we studied various relationships that exist between and among organisms and species in various ecosystems. I vividly remembered: symbiotic relationship. The biology literature informed us that these species and organisms develop this kind of relationship in order to survive. The literature clarified that sometimes they harm one another and at other times they help one another but unless they exist in this relationship, they will perish. It means that these organisms don’t necessarily like one another but they co-exist and tolerate one another so that they can survive.

The literature is deeper than I have provided but I think the point the made.

Symbiosis is the way to go

We looked at the numbers this morning again and all we could do was laugh. We are harmonizing payroll and trying to fit within our domestic resource envelop. It is my understanding that our payroll is approximately 11% of GDP (maybe about 65% of our total annual budget) and this is too high, by economic index. I don’t disagree because “they” say that we are the highest in the sub-region and this is bad. There have been times when I have asked them about the nominal numbers. Sometimes the indices are misleading and the truth story might be in the nominal figures. When the base is small, some very small numbers can represent a higher percentage of that small base.

But be that as it may, I think we need to look deeper. There are some fundamental questions that we need to answer in order to arrive at some workable solutions. Can our country develop and achieve the transformation we are looking for on the basis of domestic revenue? In my honest opinion the answer is NO. However, if we make the necessary investments in the infrastructure (power, ports and roads), we might be able to expand the economy and then raise the resources we need to transform. But how do we make the investment? And without the investment, the base will not enlarge.

For example, the report (Africa Infrastructure Country Diagnostic) by Vivien Foster in 2010 clearly highlighted Liberia’s infrastructural deficit and proposed that we needed to invest at least US$250 to $500 million per year for the next decade in order to be able to catch up with other countries. At that time, it was estimated that we were spending US$90 million per year and under such condition, it would take us 40 years to get there. (https://openknowledge.worldbank.org/bitstream/handle/10986/27770/623900WP0P12420ry0report0Image0Bank.pdf?sequence=1&isAllowed=y)

I am not sure but if we are operating on a US$500 million per year budget and we are paying about US$300 million on salary and then have to run the regular operations of the government, how we can cure the infrastructural deficit? And if we don’t cure the infrastructural deficit, how we can transform this place?

Let’s think about it. I am sure the Economic Dialogue will provide some answers…

 

When I listened to the commentary by Dr. James Jonah on Nightline Africa last night (9/1/2019) (https://www.voanews.com/episode/nightline-africa-4001221), I began to think that if Africa is not careful, it might miss out on the opportunity to develop its infrastructure and move its people out of poverty. Even the richest countries in the world today are still taking debt and raising their debt ceilings to finance their development but then they frighten poor African countries with the “mantra” of the “debt trap.”

These western countries which are threatened by China’s move into Africa have found a way to scare the devil out of us that if we take Chinese loans, we will be falling into a debt trap. Well, even they are taking Chinese loans and developing their infrastructure and enhancing the growth and prosperity of their people. If the loans are good for them then why aren’t they good for us? I think we need the loans even more.

Can you imagine if we had not taken the loan from China and the Arab lenders to do our airport what would be its state today? The World Bank and IMF were pretty okay with the status of our airport. I am remember we had to fight with the IMF to ensure that the we got the US$50 million from China to do the airport terminal and we also had to take a strong position on the European Investment Bank (EIB) to take their money from pot so that we could do the airport runway. The conditions on the EIB money was causing too much delay.

For me, it is simple: lets borrow and build our economic infrastructure so that our people can live in decency and prosperity. We will handle the debt issues later. Everyone is borrowing, including those who are warning us about the debt trap.

The problem is not with Debt but rather with what the money is used for. And today I see most of the debt resources are used to finance infrastructure, directly. The monies are not given to governments; the monies are paid directly to contractors for works that are done.

Let’s not be afraid to borrow. No one is going to seize our country because we borrowed. In fact, the infrastructure will help to enhance growth and improve living standards. Why should our people suffer or die simply because we are scare to borrow?

If you ask me, I will say let’s work with China and other countries that are willing to borrow us to develop our country and stop allowing the other borrowers to scare us about debt trap. What is the worse that could happen if we borrow? What I do know for sure is that if we don’t borrow, we are heading nowhere, period.

That story that you should finance your development from domestic resources is a farce; don’t fall for it. Our domestic resource base can’t produce the income we need to build our countries unless we develop the infrastructure. We can’t develop the infrastructure unless we borrow. It is not complicated!