New appointments at Liberia’s central bank and anti-corruption commission

President George Weah has appointed Edwin Martin as the chairperson of the Liberia Anti-Corruption Commission (LACC). He has also reappointed Jolue Aloysius Tarlue to be governor of the Central Bank of Liberia (CBL) for a five-year term. Both institutions have had unstable leadership in the last three years as appointees were entangled in scandals. Now, Tarlue and Martin have two main goals ahead: rebuild confidence and increase effectiveness.

Significance – Restoring public confidence

CBL governor Tarlue first took charge temporarily in November 2019. His predecessor Nathaniel Patray had resigned following probes into two scandals involving the bank’s governance. The first was about a shipment of Liberian banknotes that reportedly went missing in the country between 2016 and 2018, and the second was about Patray’s ‘mop-up’ scheme to check currency depreciation in 2018. CBL officials in this scheme were dispatched to buy Liberian dollars from businesses in exchange for US dollars. However, a US-sponsored report, which the government requested, said there were discrepancies in the central bank’s records and potential misappropriation regarding the consignment and the mop-up.

The lapses dented public faith in the banking system and a cash shortage occurred as banks ran out of deposits. More than 90% of Liberian dollars were outside the banking system last year. To address this issue, Weah reset CBL leadership and promised to cut central bank borrowing – his government had been borrowing from donor aid deposited at the central bank to pay salaries. (See: Liberia president targets central bank reform). The parliament also amended the CBL Act in October to emphasise legislative oversight over the bank’s operations, especially on currency management.

LACC has also recently been unsettled by a reputational scandal. The Nigerian-born Ndubusi Nwabudike resigned as its chairman in February this year following allegations that he gained Liberian citizenship illegally (See: Liberia’s anti-corruption boss resigns over citizenship scandal). Nwabudike had already been expelled from the Liberian Bar Association because of this scandal. But even with this setback, the government has still mustered proposals to strengthen the legal framework for tackling corruption.

Last month, Weah submitted a bill to parliament to solidify LACC’s powers to investigate and prosecute cases. The current LACC Act 2008 significantly limits the commission’s impact and autonomy. For example, it does not permit LACC to directly prosecute cases. Instead, the commission is first required to recommend prosecutions to the justice ministry and only act further if the ministry does not do so within three months. The legislation that has been proposed now will exclusively vest prosecutorial powers in LACC.

Outlook – Path to stability

The attempts to reform the legal framework will help to stabilise both LACC and CBL. This stability will be critical for restoring public confidence, especially at the central bank where the huge outflow of money from the formal system has hindered monetary policy.

Further steps to raise the effectiveness of these institutions will be to devote more resources to them and minimise political interference. Weah sacked James Verdier as LACC chairman in 2019. That was after Verdier claimed that the commission was poorly funded and that government officials were refusing to declare their assets.

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