afrol News, 13 December - According to a UN expert group, "Liberia suffers from a dysfunctional economy." Almost 80 percent of Liberians are unemployed as the national economy has shrunk due to civil war and trade sanctions. Liberia's transitional government is said to be doing little to fight poverty and accused of embezzling funds.

With more than half of the people of Liberia estimated to be living on less than 50 US cents a day, a UN-appointed expert panel says the West African country is suffering from "widespread financial improprieties by government officials, extremely low economic growth, a high foreign and domestic debt burden" and about 80 percent unemployment.

In a report to the UN Security Council, the so-called Panel of Experts on Liberia says instead of spending its funds on health care, education, water and roads, the Monrovia transitional government appropriated 52 percent of the annual budget for personnel and 15 percent for security, although the UN Mission in Liberia (UNMIL) currently bears the major responsibility for security.

The Liberian government was said not to have accounted for the money allocated in the previous two budgets, but has overspent, "most of the revenue-generating parastatals or units have not been audited" and many teachers have not been paid for up to 24 months.

More serious allegations were put forward against the transitional government. "In addition to unapproved excess spending, it appears that the ... government is tolerating substantial leakage of revenue. The Panel documented three major sources: loss of customs duties, loss of taxation on petroleum imports and loss of revenue from the sale of iron ore," the report says.

The Liberian government had further sold 700,000 tons of iron ore in January for US$ 10 per ton, instead of the going rate of US$ 40 a ton, and then failed to deposit the proceeds in the Central Bank of Liberia, as required. Sued by civil society organisations, the Justice Ministry pledged to the Supreme Court of Liberia in September that all future proceeds would be properly handled, the panel reports.

The UN panel was appointed to monitor the Security Council's sanctions against Liberia, imposed in 2001 and re-imposed last year. UN sanctions include diamond exports, an arms embargo, restrictions on the export of round logs and timber products and travel bans on individuals posing a threat to Liberia's stability and security.

In the 23-page report, the UN panel says the Monrovia government is willing to satisfy the requirements of diamond certification of the Kimberley Process that would authenticate local rough diamonds and allow them to be sold internationally, but lacks the finances and trained personnel to stop illegal mining.

Therefore, violations of the embargo on the export of Liberian diamonds were "set to increase," the panel found. So-called "reliable sources" had told the panellists that already, "up to five small, ad-hoc diamond-buying offices have opened in Monrovia that are purchasing production from both Nimba County and the Lofa River basin."

Also the embargo of timber exports is increasingly malfunctioning. Liberia's Forestry Development Authority had nevertheless tried to enforce widespread compliance with sanctions against timber exports, despite security concerns in the field, the panel says.

Few of the needed reforms have been implemented, however, and "a growing domestic market is being supplied by ex-generals who are hiring ex-combatant labourers," it says, calling for a professional management team to run the Forestry Development Authority.

The panel finally said it had also learned that Liberia's wanted ex-President, Charles Taylor, living in exile in Nigeria, was still receiving money from Liberia. It has however been unable to collect direct evidence since "the general lack of any type of financial control and rampant corruption" facilitate the diversion of funds. Nigerian authorities had refused to cooperate with the panel.

By staff writer

© afrol News

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