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Banks$8 + $4 = $12 million political corruption.
Boakai’s headache.Who are the people refusing to pay back $12 million to SIB Limited Liberia? And no punishment? Plenty of free money in Liberia. Don’t sit back. Go to Liberia, enter the government, and take your own (kidding but serious)
The FIB acquisition by SIB Liberia Limited exemplifies political influence, corruption, and a lack of competent manpower for proper business valuation.
Bailing out banks is common globally, but it should involve some sacrifice by investors and managers, such as equity forfeiture and substantial pay cuts (25-50%). Only under such conditions should the Central Bank of Liberia (CBL) use taxpayer money to support a profit-making entity.
This FIB financial debacle highlights the financial stress of Liberian banks and Liberia’s overall risk exposure due to banks primarily existing to give out political loans, resulting in bad loan receivables.
The fact that a bank in Liberia is struggling for $8 million USD in a country with a $4.3 billion GDP and 5.2 million people is nonsensical and indicative of poor financial management. SIB made a bad investment and is not too big to fail—let it collapse as capitalism dictates.
We challenge the Boakai administration to publish the list of debtors as LBDI did. Let’s clear the air whether Boakai is not a debtor. Transparency and accountability for taxpayers $8 million demands such brutal transparency.
Despite differing views from Boakai, his economic team, Weah, and his economic head Sam Tweah, my perspective is grounded in simple economics from the University of Virginia, contrasting with their political voodoo economics.
In Liberia, up to 90% of bank decisions are political, with little regard for sound business practices. For instance, individuals like McGill receive $200,000 loans on a $6,000 monthly salary without collateral.
Although Boakai disagrees, I present this roadmap to educate Liberians on financial management and economic flow.
Read and share widely.Joe Boakai’s CBL should follow Obama’s example with distressed banks. The SIB Bank transaction, controversial in 2016, is a key issue Boakai should avoid. If Boakai intends to reward the Sirleafs, it should be done legally.
Issue 1: Loan $8 Million
Option 1:
Syndicate other Liberian or foreign banks to take over SIB Liberia. This issue dates back to Sirleaf’s administration in 2016. FIB was owned and operated largely by Sirleaf’s children: Robert Sirleaf and Jeff Sirleaf. Their brother, Charles Sirleaf, was Deputy Governor at the CBL.
Correctly, Weah and the CDC CBL leadership questioned the legitimacy and fairness of this transaction, considering it highly conflicted and beneficial to the Sirleafs. This sentiment is widely shared among Liberians.Allocating $8 million freely to the Sirleafs is unjust. Boakai should not perpetuate such behavior.
Option 2:
Provide $8.5 million at an 8% interest rate for 10 years to the Government and people of Liberia.
Option 3:
The Government of Liberia could receive a 30.2% equity share in the bank.
Calculated as follows:
- Bank investment: $18.5 million
- CBL bailout: $8.0 million
- Total capital: $26.5 million Equity share: $8.0 million / $26.5 million = 30.2%
Issue 2: Write-off Estimate
The impact of a $4 million write-off.
First, send the debts to collections and the court. Seize assets from defaulters or force them into bankruptcy to prevent future loan access.Please share widely for Liberians to see how Boakai is about to give out a free $8 million to a bank acquired during his vice presidency in 2016, mainly benefiting his boss’s family. This is classic political corruption. No dispute—share.
Why is SIB Liberia Limited asking Boakai to bail out Sirleaf bank?
Why should we wait on IMF to tell us what is wrong?
