The contentious approval of an $8 million payment by the Central Bank of Liberia (CBL) to SIB Liberia Limited (SIBLL) for settling legacy deposit liabilities—originating from the administrations of former Presidents Ellen Johnson Sirleaf and George Weah—has resurfaced under the scrutiny of current President Joseph N. Boakai, who has demanded an update on the matter.
Background
On June 3, 2016, the Central Bank of Liberia granted a license to SIB Liberia Limited, enabling it to operate as a commercial bank. As part of this licensing agreement, SIBLL assumed specific assets and liabilities from the now-defunct First International Bank Liberia Limited (FIBLL). This move aimed to stabilize the banking sector and prevent a total collapse of FIBLL, which could have had severe repercussions for Liberia’s financial industry.
SIBLL Legacy Liability
Since acquiring FIBLL’s assets and liabilities, SIBLL has managed to pay off $14.7 million in legacy deposit liabilities. However, an additional $8.5 million remains unpaid, with depositors threatening legal action if the obligations are not fulfilled. SIBLL argues that these payments have significantly strained its cash flow, prompting the bank to seek intervention from the Central Bank.
George Weah Administration’s Approval
During President George Weah’s administration, the challenges faced by SIBLL were brought before the Central Bank’s Board of Governors. In a petition dated December 2, 2021, SIBLL’s Managing Director, Mr. Joseph K. Anim, detailed the bank’s difficulties and proposed solutions, including a request for $8 million to settle the remaining legacy deposit liabilities. After a thorough review, the Board of Governors approved the payment. However, despite this approval, the funds were never disbursed.
President Joseph Boakai Administration
With President Joseph N. Boakai now in office, the issue has resurfaced. On April 18, 2024, Acting Minister of State, Semuel A. Stevquoar, transmitted a request to the Executive Governor of the CBL, Hon. J. Aloysius Tarlue Jr., under President Boakai’s directive. This request sought an update on the progress made in addressing the claims and emphasized the urgency of resolving the matter.
In a letter dated December 28, 2023, SIBLL’s Group President and Board Chairman, Dr. Papa Kwesi Nduom, expressed gratitude to the President for his attention to the issue and stressed the necessity of support in settling the legacy deposit liabilities. The letter highlighted that SIBLL had already paid a substantial portion of these liabilities and emphasized the need for the remaining $8.5 million to prevent legal actions and maintain confidence in the financial sector.
Petition to the Central Bank
The detailed petition submitted to the Central Bank on December 2, 2021, by SIBLL’s Managing Director, Mr. Joseph K. Anim, provides a comprehensive overview of the bank’s struggles.
The petition outlines that the initial agreements with the Central Bank included assurances about the value of the assets and liabilities assumed from FIBLL. However, the bank faced significant challenges, including non-performing loans and the withdrawal of major depositors, which severely undermined the transaction’s success.
The petition proposed two primary solutions:
- Provision of $8 million to pay off the remaining legacy deposit liabilities.
- Permission to write off a $4 million legacy loan balance from its books to improve the bank’s financial standing.
Current Status and Implications
Despite the approval by the Central Bank’s Board of Governors during the Weah administration, the $8 million payment remains unexecuted. President Boakai’s administration has now taken up the issue, seeking clarity and resolution. This delay raises concerns about the decision-making process within the Central Bank and the influence of executive directives on financial matters.
This case underscores the need for increased transparency and accountability in financial decisions involving public funds. The involvement of high-level officials and the substantial amounts at stake call for a thorough investigation to ensure that all actions are in Liberia’s best interest and contribute to the nation’s financial stability.
As Liberia continues to navigate economic challenges, both the government and financial institutions must prioritize transparency and effective communication with the public. Resolving this issue is crucial for maintaining confidence in the country’s banking sector and ensuring that future financial matters are handled with greater scrutiny and responsibility.
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