Commentary: Reducing the cost of governance is what Liberia needs right now
Seltue Karweaye
For a country to achieve its objectives, the support and participation of its citizens are essential, reflecting the core principles of democracy. Regrettably, Liberia is currently experiencing a significant gap between the government and its people, leading to challenges in achieving national goals.
Today’s hypothesis suggests that effective governance has the potential to foster greater prosperity for a country compared to simply saving government funds.
The issue of governance costs is a hot topic in Liberian politics. Politicians are often criticized for their extravagant lifestyles and high salaries compared to global standards. Calls for a more efficient presidency and legislature have been made, but unfortunately, these discussions rarely lead to tangible changes due to a lack of political will.
Let’s talk about the approved 2024 national budget. Significant concerns have been raised regarding the allocation of funds. An overwhelming 87.1% of the budget, amounting to US$738.86 million, has been directed towards recurrent expenditures. The budget’s funding is anticipated to rely heavily on $696.43 million in revenue and new borrowing, leading to a projected deficit spending of US$45 million.
On August 16, 2024, the Ministry of Finance and Development Planning presented a revised budget totaling US$721.5 million to the national legislature. Alarmingly, the revised budget indicates that 91.3% of the overall budget is set to be spent on recurrent expenditure, including a substantial $57.9 million designated for the national legislature. These figures undeniably highlight troubling aspects of the country’s financial management.
Liberia urgently needs to generate additional revenue equal to its current earnings to cover its expenses without relying on borrowing. However, Liberia must avoid using borrowed funds for consumption, which is not a sustainable long-term strategy. Instead, loans should be channeled into capital assets that yield returns on investment to repay the debt.
In addition to the tangible impacts of reducing governance and recurrent expenditure, there are intangible ripple effects. Over the years, Liberia has grappled with extended conflicts involving teachers, nurses, former soldiers, and their spouses. When these protesters voice their concerns or threaten strikes, they emphasize areas where the government could cut costs and redirect funds to address their issues.
They also highlight the exorbitant costs of running the government, the inflated salaries and benefits of the National Legislature and Cabinet, the expenses related to impractical projects, and the privileged education and healthcare facilities provided to politicians and their families. These factors cause them to disregard the government’s justifications for not meeting their demands, even if fulfilling them would imperil the country’s fiscal health. For instance, while government funding for tertiary institutions and healthcare centers has proven unsustainable, it becomes challenging to explain this when people see politicians spending vast sums on elections and building high-quality private schools, colleges, or healthcare facilities.
Governments can potentially increase their revenue by demonstrating responsible management of the country’s resources. However, expanding the tax base has historically been daunting due to widespread skepticism about the government’s ability to utilize tax resources effectively. Taxes are vital in government revenue worldwide, constituting over 90% of UK and US government income. In Liberia, only a tiny portion of the population contributes to the tax system, resulting in one of the world’s lowest tax-to-GDP ratios for the country.
When citizens perceive that their taxes are being used effectively, they are more likely to accept tax increases, reducing the government’s reliance on borrowing. The growing divide between the Liberian government and its people has led to a concerning trend where some individuals are inclined to see the country fail to support their political agendas. Even expressing an interest in holding political office is met with suspicion, as candidates are often viewed as seeking personal gain.
In conclusion, public office should be perceived as a service rather than an occupation. Achieving this necessitates reducing the cost of governance through salary cuts, agency mergers, and making public office less appealing to foster the understanding that those in public office are there to serve the public’s best. As Cllr. Tiawan Gongloe often says, “Government is a place to serve and not to steal.” I rest my point.
