After The Foreign Exchange, Now Price Reduction War
By John L. Momoh
Government’s robust policy statement from President George Manneh Weah, which is geared towards reducing the depreciation of the value of the Liberian dollar to the U.S. dollar on the foreign exchange rate market, has begun bringing hope and action on the part of money changers, the business community and the general public.
Already, the vast majority of money changers in the country have begun complaining of the shortage of the Liberian dollar, prompting them to change one U.S dollar for as low as LD$100, LD$120, LD$155 in most communities. Government’s Economic and management Team and the Central bank’s Executive Governor designate have begun the first in a series of meetings to follow.
The Government of President George Manneh Weah is serious to bring sanity and stability to financial transactions in the country because the corner stone of government’s pro-poor agenda policy is focused on raising the living standards of the Liberian people, especially the poor finds it difficult to implement its programs amidst the embarrassing decline, liquidity and fluctuations in the value of the Liberian dollar.
It is however unlikely that President Weah’s speech, meant to halt the increase in the mounting depreciation of the Liberian dollar, and to concomitantly lead to reduction in prices of goods and services will easily trickle down to the targeted audience as soon as may be expected for various reasons including the unscrupulous attitudes of some members of the business community.
Certainly over the years some business people have been taken advantage of the continued rise to make profits by simultaneously making slight increases in the price of commodities and services. For example, despite President Weah’s mandate to the LRA to effect the reduction of the tariff on mosquito coils and onions imported into the country, many shops are still selling the same commodities on the basis of prices that they added to, such as two pieces of mosquito coils for LD$20 and LD$10 dollars for one.
Indeed it may be easier to win the battle against money changers once it becomes mandatory that all of them should obtain operating licenses and as an enforcement measure, the Central Bank assigned agents in plain clothes will be on the field to monitor compliance. It will however not be easy for government to win the price control battle as there are more goods and services providers including commercial drivers in the business sector, than money-changers, who constitute only a fraction of the population.
What is being discussed in some quarters is that the issue of the high cost charged by commercial drivers and those using private vehicles for public transport purposes should not be divorced from any government effort halt the increase in the depreciation of the Liberian dollar and hence the overall efforts to reduce the cost of living in the country to provide the space for the implementation of government’s pro-poor agenda for prosperity.
It can be recalled that prior to the assumption of the CDC led government, commercial drivers were charging LD$40 from mid-town in Monrovia to Airfield Sinkor and Old Road Sinkor for taxi ride, now most of them are charging LD$50 or LD$60 while on the Gardnersville Somalia drive route from mid-town to New Georgia or Barnersville junctions are charging for LD$70 t0 LD$80 while bus drivers are asking for over the LD$40 that was the normal price for the distance.
This is why we are urging Government to intervene, by ensuring that the Ministry of Commerce play a pro-active role to make sure that whenever adjustments are made in lowering the Liberian dollar to the U.S dollar on the exchange rate market its impact is felt the retail and whole prices of commodities on the local market.
It will also pay dividends to the pro-poor agenda policy, if government effect a similar financial intervention to subsidize tariff paid by petroleum importers to ensure a concomitant reduction in transportation costs. This will be expected to go along with a comprehensive listing from the Commerce Ministry of the official government transport charges per destinations to drivers plying routes to and from Monrovia and its environs, and to and from Monrovia to destinations within the Country, among others.