President Sirleaf: Transfer 25 Percent of Government Revenue Annually to the Counties
For Socio-economic Development

By Winsley S. Nanka, CPA


The Perspective
Atlanta, Georgia
April 18, 2006


Socio-economic development funding during the administrations of President William Tubman, William Tolbert and Samuel Doe was not based on a balanced development strategy that took into consideration the equitable redistribution of state resources to meet the development needs of Liberia’s political sub-divisions (counties, districts townships, and etc). In essence, these previous administrations did not provide a sustainable source of funding for local government’s socio-economic development. As a result, the various counties in Liberia experienced unbalanced development. In his book “Proposition 12 for Decentralized Governance in Liberia Power Sharing for Peace and Progress” Yaruo Weh-Dorliae observed that: “A cardinal responsibility of the national government is to oversee the exploitation of the nation’s natural endowments and ensure the equitable redistribution of the wealth gained thereof. Because not all the regions of our country are naturally endowed, economic redistribution of the nation’s wealth is necessary to ensure simultaneous and integrated development”. Therefore, this article is intended to suggest how President Sirleaf could allocate government revenue among the counties in an equitable manner to advance socio-economic development in Liberia.

Socio-economic development in the counties during the Tubman administration was mainly based on the celebration of President Tubman’s birthday in each political sub-division. The celebration of Tubman’s birthday afforded the selected county the opportunity to construct administrative offices, and undertake other infrastructural developments. The infrastructural developments were undertaken primarily to accommodate the festivities, and thereafter, the county officials that basically served as agents of the Monrovia government (Weh-Dorliae, 2004). According to a former official in the Tubman administration, the government national planning agency also initiated socio-economic development in the counties based on development priorities identified by the national government.

President Tolbert’s local development strategy was based on the celebration of Liberia’s Independence Day in each political sub-division on an annual basis, and “Rally Time” a 10 million dollars national campaign earmarked for rural development. Rally Time was a fundraising project that required Liberians to make contributions to President Tolbert’s rural development agenda . President Tolbert constituted a Rural Development Taskforce during the later part of his administration to develop a roadmap for socio-economic development in rural Liberia (Nanka, 2004). According to a source familiar with President Samuel Doe’s socio-economic development agenda, the Doe administration did not have a comprehensive strategy for the development of Liberia’s sub-divisions, and a sustainable source of funding that strategy.

The citizens of the various counties also undertook “self-help” initiatives to achieve community economic development during the administrations of President Tolbert and President Doe. In addition, concession companies undertook economic development in their areas of operations to meet the needs of their employees and families. Companies such as Liberia American Mining Company (LAMCO), Bong Mining Company, among others established oasis of modern communities with hospitals, schools, electricity, and pipe-borne water surrounded by poverty ridden communities (Dolo, 2005).
Recently, the Government of Liberia, (GOL) is reported to have appropriated 1 million dollars to Liberia’s political sub-divisions to be used for the development priorities of their choosing. According to Liberia’s Director of Budget, Augustine Kpehe Ngafuan, each county district will receive $10,000 (ten thousand dollars) to assist in its development needs. The Analyst Newspaper quoted him in its April 6, 2006 edition as saying “Our people must benefit directly from government, so that they know exactly that they are part of the regime [administration]." According to sources closed to the Sirleaf administration, the amount could be used for community economic development projects in the county districts such as micro loan program, agricultural development, hand pumps to provide clean drinking water, purchase textbooks for local schools, expand the community radio stations that are now mushrooming around Liberia, among others.

There are several shortcomings in the allocation of $10,000 to each district: First, the budgetary formula failed to take into consideration the unequal levels of devastations caused in Liberia during the civil war. For example, Lofa and Nimba counties are said to have experienced the most destruction. Therefore, any allocation of development funds must that into consideration. Second, the allocation of the funds failed to take into consideration the population in each county or district. For example, Nimba, Bong and Grand Bassa counties are more populated than Rivercess, River Gee and Sasstown counties. Therefore, the county districts in these counties may require more development assistance. Fourth, the impact of $10,000 on development in each district is likely to be temporary and “disjointed” because of the absence of a sustainable source of local socio-economic development funding. And fifth, the absence of logistics, human resource capabilities in these districts and the lack of financial management systems in place to safeguard the dispensation of the funds are likely to create accountability challenge.

The long-term solution to the socio-economic development malaise in Liberia is a dedicated source of development funding for local development enshrined in law. A sustainable source of funding for local development will empower the people in the various counties to undertake development initiatives of their choosing. The government should provide a permanent source of funding for the counties. In view of the absence of a sustainable source of development funding for Liberia’s political sub-divisions, I propose that President Sirleaf’s government introduce a bill that will provide a permanent source of funding for local government socio-economic development as the first step toward economic empowerment in Liberia. The act should provide for the transfer of twenty-five percent of the revenue collected by and through the Ministry of Finance to each county for socio-economic development purposes identified by each county of Liberia effective fiscal year 2008. The two-year waiting period is necessary to allow the government to put in place the safeguards necessary for the counties to effectively and efficiently manage the resources allotted to them. The bill should be known as the Revenue Transfer Act. The Bill should read in part as follows:

`For fiscal year 2008 and each fiscal year thereafter, 25 percent of the revenue collected by and through the Ministry of Finance shall be transferred to the counties of Liberia under this chapter for socio-economic development to be identified by the citizens of the county. The Minister of Finance, or Designee out of amounts in the Treasury shall transfer to each county on the second Monday of the preceding quarter in accounts established by each county in a reputable domestic commercial bank for appropriation, for obligation or expenditure in accordance with this chapter.'

(1) Equitable Distribution- The distribution of funds to each county shall be based on the population of each county and other consideration to be identified by the national legislature.

(2) Accountability-The Auditor General of the Republic of Liberia or a reputable national accounting firm shall perform financial and operational audits of each county development fund receipts and disbursements, and submit said audit to the National Legislature at most 120 days after the close of the fiscal year.

(3) Management – Each county shall establish a Development Council that shall comprise representatives (not members of the legislature) of each county district, representative of civil society groups in each county, and headed by the Assistant Superintendent for Development to approve the distribution of funds to the various approved development projects. The Council shall meet twice a year for the purpose of this act or upon the concurrence of two-third majority of the council members. '

In conclusion, the introduction of the proposed act by President Sirleaf to the national legislature, its subsequent passage and implementation will provide an equitable redistribution of the resources of Liberia. Competent Liberians who are original thinkers, and development oriented may be attracted to the position of superintendent and the various county positions if a permanent source of funding is provided for the counties. Importantly, decisions about education, healthcare delivery system, sanitation, secondary roads, among others will be made at the local level. This may allow the national government to concentrate on major national development initiatives such as the development of a national road network, national electricity grid, the modernization of national seaport and airport systems, etc. The act will also fulfill President Sirleaf’s pledged during the presidential campaign to empower the Liberian people, and equitably redistribute the resources of Liberia to meet the balanced socio-economic development needs of the Liberian people.