Liberia makes Significant Progress in Fiscal Transparency
Liberia has made significant progress towards meeting fiscal transparency, the United States Bureau of Economic and Business Affairs has said in its 2023 Fiscal Transparency Report.
Fiscal transparency, according to the Bureau, informs citizens how government and tax revenues are spent and is a critical element of effective public financial management.
During the review period, the U.S. Bureau said the Government of Liberia(GoL) made significant progress by making its executive budget proposal publicly available within a reasonable period, by making major state-owned enterprise debt information publicly available, and by making basic information on natural resource extraction awards publicly available.
However, it indicated that the government did not make its enacted budget or end-of-year report publicly available within a reasonable period. Information on debt obligations was widely and easily accessible to the public, including online
“The government maintained off-budget accounts not subject to audit or oversight. The supreme audit institution did not meet international standards of independence and did not make its audit reports publicly available within a reasonable period,” the report stated.
Among other things the Bureau indicated in the report that during the review, the government specified in law or regulation and appeared to follow in practice the criteria and procedures for awarding natural resource extraction contracts and licenses, but there are reports of corruption and inconsistent application of regulations in practice.
The Bureau recommended that for Liberia to improve its fiscal transparency the country should make the enacted budget and end-of-year report publicly available within a reasonable period; Eliminating off-budget accounts or subjecting them to adequate oversight and audit.
It proposed that Liberia should ensure the supreme audit institution meets international standards of independence and make supreme audit institution audit reports publicly available within a reasonable period as well as ensuring the laws or regulations for awarding natural resource extraction contracts and licenses are followed in practice.
Transparency, the Bureau said, provides citizens a window into government budgets and those citizens, in turn, hold governments accountable. It underpins market confidence and sustainability. The Congressionally mandated Fiscal Transparency Report (FTR) is a tool to identify deficiencies and support needed changes
The Department’s fiscal transparency review process assesses whether governments meet minimum requirements of fiscal transparency.
As per the report, the minimum requirements of fiscal transparency include having key budget documents that are publicly available, substantially complete, and generally reliable. The review includes an assessment of the transparency of processes for awarding government contracts and licenses for natural resource extraction.
According to the Bureau, fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability. Fiscal transparency fosters greater government accountability by providing a window into government budgets, helping citizens hold their leadership accountable, and facilitating better public debate.
The Bureau emphasized that while a lack of fiscal transparency can be an enabling factor for corruption, the report does not assess corruption. A finding that a government “does not meet the minimum requirements of fiscal transparency” does not necessarily mean there is significant corruption in the government. Similarly, a finding that a government “meets the minimum requirements of fiscal transparency” does not necessarily reflect a low level of corruption
However, the Bureau stated that the 2023 fiscal transparency review process evaluated whether the government publicly disclosed key budget documents, including expenditures broken down by ministry and revenues broken down by source and type.
The review process also evaluated whether the government had a supreme audit institution that meets international standards of independence and audits the government’s annual financial statements, and whether such audits are made publicly available.
It further assessed whether the process for awarding licenses and contracts for natural resource extraction is outlined in law or regulation and followed in practice, and whether basic information on such awards is publicly available.