Legal complexities may frustrate President Joseph Boakai’s quest to inspect the records of the Central Bank of Liberia through a comprehensive audit of the country’s apex bank.
Central Bank reform in the aftermath of the 2018-19 currency crisis tightened the independence of the Bank to set it away from political interferences and manipulation in order to achieve monetary efficiency and prevent fraud and abused.
The Amendment and Restatement of the Act establishing the Central Bank of Liberia 1999,” approved on October 20, 2020 appears to render illegal the President’s push for an external audit of the Bank outside of its existing governance structures.
According to the legislation, the Central Bank of Liberia is both autonomous and accountable to the legislature. There is no provision authorizing the President to order an audit of the CBL.
Instead, the Act outlines that the bank is obligated to appear before the legislature’s Joint Committee on Banking and Currency.
There is also provision for annual appearance of Bank officials before the plenary session of the House and the Senate in compliance with the oversight mandate.
The new law states the Central Bank and its governors, officers, and staff should not take instructions from any person or entity, including government entities, regarding their functions
According to Section 60 of the Act, in the event of conflicting provisions between this Act and other laws, the provisions relating to the authority and functions of the Central Bank and matters of monetary policies shall prevail.
On auditing the act provides for a Chief Internal Auditor, External Auditor, and the Audit Committee with duties to perform periodic audits of the administration and operations of the Central Bank, provide reports and recommendations to the Board of Governors, and ensure proper risk management procedures and practices are implemented and monitored.
As President Boakai’s order for an audit ignores these established functions and responsibilities, legal experts argue it would take a long fight, which may damage the independence of the Bank and return it to pre-reform years.
The CBL Act grants the President significant power but restricts his authority in matters related to the Central Bank’s functioning. This legal dispute may lead to the involvement of the Supreme Court in settling the complications surrounding the audit.
For now, the future of the audit of the Central Bank of Liberia hangs in the balance as President Boakai’s order clashes with the autonomy and functions prescribed by the CBL Act.
While the Supreme Court is expected to weigh in on the matter, it remains to be seen how this legal battle will unfold and its potential implications for the country’s monetary and financial landscape.
