The Liberian Government has announced a policy reinforcing its austerity measures in the wake of US aid cuts.
By Lewis S. Teh
Monrovia, February 21, 2025/Amid the indefinite suspension of all USAID-funded projects across the country, the Government of Liberia, through the Ministry of Finance and Development Planning, has issued a strict directive to government spending entities to prioritize their priorities amid resource constraints.
“Prioritize your priorities” as the scarcity of resources remains a significant reality”
In a memo issued Thursday, February 20, 2025, by Finance Minister Augustine Kpehe Ngafuan and addressed to Ministries, Agencies, and Commissions, the Ministry emphasized the importance of remaining mindful of limited resources.
“Scarcity of resources is a reality, and all Heads or Senior Management of Spending Entities must not lose sight of this reality. You’re advised to prioritize the priorities,” the Minister stated.
The Minister has issued strict instructions for all government spending entities to adhere to their approved budgets for Fiscal Year 2025 and to exercise fiscal prudence in what it describes as a “challenging fiscal environment.”
Additionally, the Ministry has reminded government institutions of the importance of managing their budgets effectively.
“Please manage your budget well. Your budget is for the entire 12 months of 2025. So, you’re strongly advised not to execute your budget as if it were a six-month or one-quarter budget”
The Minister further said that all spending entities will likely not receive any supplemental resources from the government if they exhaust their budget lines early.
The Ministry memo further informed government institutions that the budget is a projection until revenue is actually raised through the efforts, dedication, integrity, and sacrifice of the Liberia Revenue Authority, the MFDP, and all other stakeholders involved in revenue generation.
“This year’s budget is US$880.7 million, reflecting a growth of 19.2% over last year’s Recast Budget of US$738.9 million.
While this US$141.8 million increase is undeniably impressive, it is still far below the upwards of US$2 billion in funding requests for 2025 that the MFDP received from spending entities during the formulation of the current budget,” the Ministry explained.
The memo informs senior management of spending entities that, with the country now in the second month of the Fiscal 2025 National Budget, it has been receiving a large number of requests for additional funds from spending entities.
These requests seek to address new priorities and spending pressures that were not included in the budgets of spending entities.
The Ministry stated, “The first source to fund an unforeseen demand or priority that arises during budget execution should be the budget of the spending entity itself.”
The Ministry also reminded all spending entities that only US$3.26 million was approved as a contingency reserve fund in the Fiscal Year 2025 budget. This is the only source of unallocated funds from which the Ministry can obtain additional funds to address unforeseen spending demands.
“This amount is obviously minuscule compared to the sheer number of legitimate unforeseen spending pressures that arise during the course of the year.
What this simply means is that the MFDP, operating within the structures of the Public Financial Management and Budget Transfer laws, must make the difficult decision of looking to other budgeted appropriations to fund legitimate unforeseen spending demands,” the Ministry added.
The Ministry concluded by emphasizing that the cooperation of all spending entities is critical to ensuring the efficient, impactful, and equitable execution of the national budget. -Edited by Othello B. Garblah.
