—But CDC Maintains Budget is ‘Speculative Revenues’ and Fiscal Risks
IPNEWS: The Liberian government, speaking through the Ministry of Information, has sharply dismissed the Coalition for Democratic Change’s (CDC) rejection of the draft FY2026 budget, calling the claims “misleading and without legal foundation”.
In a statement, the government pointed out that budget jurisdiction transfers to the Legislature after submission and the Executive has no legal right to withdraw it.
The government further defended the budget’s fiscal strategies, citing improved domestic revenue and consistent use of contingent revenue in past budgets.
The government stated that upon submission, the budget becomes the purview of the Legislature, countering the CDC’s call for it to be returned to the President for a recast.
The government highlighted steady improvements in domestic revenue collection over the past two years, defending its revenue projections against the CDC’s claims of them being unrealistic.
In response to CDC’s criticism regarding debt servicing, the government pointed to the General Auditing Commission’s documented findings about unauthorized borrowing by the previous CDC administration.
The government defended the inclusion of contingent revenues, such as the ArcelorMittal Liberia (AML) signature bonus, stating it is consistent with longstanding budget practices and supported by negotiations.
The government described the FY2026 draft budget as a “disciplined, forward-looking fiscal strategy” based on strengthened economic performance and public financial management
However, the CDC earlier sharply criticized the Government of Liberia’s Draft National Budget for Fiscal Year 2026, describing the proposed US$1.211 billion spending plan as “excessively ambitious” and grounded in unrealistic revenue assumptions.
In a statement issued Monday in Monrovia, the CDC Legislative Caucus called on the Speaker and members of the National Legislature to return the budget to the Executive for immediate revision to ensure fiscal prudence and protect economic stability.
The party argued that the budget’s reliance on contingent and non-recurring revenues — including a US$200 million signature bonus linked to ArcelorMittal Liberia (AML) — exposes the country to severe financing and implementation risks.
“After rigorous review of the Draft FY2026 National Budget, we conclude that the proposed US$1.211 billion envelope is excessively ambitious, built on speculative revenues and non-recurring windfalls,” the statement said. “It exposes Liberia to serious fiscal and implementation risks.”
CDC Highlights Key Concerns
1. Fragile Revenue Framework
The CDC said that once contingent revenue is excluded, core domestic revenue stands at US$940 million — an increase they acknowledge is attainable through stronger tax administration but still vulnerable to underperformance. The party warned that overreliance on uncertain AML payments could lead to mid-year budget shortfalls.
2. Public Sector Investment Plan (PSIP) at High Risk
According to the CDC, up to US$281 million allocated for capital projects is heavily tied to the AML signature bonus, meaning several road, energy, and health projects could stall if the revenue fails to materialize.
The statement cautioned that most PSIP items lack design, procurement, and execution readiness, “rendering the entire FY2026 PSIP as just colorful projects waiting to fail in execution.”
3. Rising Wage Bill Without Improved Civil Service Pay
The CDC claimed that the wage bill — projected at US$329 million — actually totals US$352 million when a US$26 million line item labeled “Other Compensation” is included.
They called for immediate clarity on how that amount will be spent, arguing that the increase does not reflect improvements in salaries for frontline workers such as teachers, nurses, and security officers.
4. Transparency in Debt Servicing
While applauding the government’s effort to honor its debt obligations, the CDC requested assurance that all debt figures in the US$230 million servicing allocation are consistent with audits previously commissioned by the General Auditing Commission.
Possible Impact on Citizens
The party warned that if projected revenues fail, the government could be forced into emergency budget recasts, undermining infrastructure development, donor confidence, and economic growth.
“This is not a rescue plan, but a risky plan,” the statement noted. “It pays salaries but cannot create jobs, reduce food prices, or restore investor confidence. It rescues politicians, not the people.”
CDC Policy Demands
The party outlined eight recommendations, including:
• Returning the draft budget to the Executive for a conservative recast
• Excluding speculative revenue from baseline projections
• Allocating the AML signature bonus only after legal receipt and certification
• Restricting one-off inflows to capital investments rather than recurrent spending
• Publishing a PSIP readiness report within 30 days
• Conducting an independent debt-sustainability assessment
• Increasing transparency in public-sector compensation
• Accelerating Liberia Revenue Authority reforms with quarterly reporting
The CDC argued that adopting these measures would enhance credibility with international partners and strengthen financial governance.
Call for National Responsibility
“Passing a budget built on sand is not patriotism; it is peril,” the document concluded. “Return the budget. Reframe it. Rebuild Liberia on solid ground.”
The statement was issued under the signature of CDC National Chairman Cllr. Janga Augustus Kowo and attributed to the party’s Budget Review Committee.
