BRIEF REMARKS BY J. ALOYSIUS TARLUE, JR., EXECUTIVE GOVERNOR, CENTRAL BANK OF LIBERIA AT THE SIGNING CEREMONY OF THE MEMORANDUM OF UNDERSTANDING (MOU) WITH AFRILAND FIRST BANK LIBERIA LIMITED (AFBLL)
Welcome and good afternoon everyone. Let me extend a special welcome to the Managing Director and staff of Afriland First Bank Liberia Limited (AFBLL) to this event which represents a special partnership between the CBL and Afriland First Bank.
Two years ago, in February 2022, we met with all the commercial banks here at the CBL to sign a Memorandum of Understanding (MoU) concerning the implementation of the currency changeover project in keeping with the mandate of the Joint Resolution of the 54th National Legislature which requires that the currency exchange be conducted through only the commercial banks and regulated financial institutions. The CBL has been mindful of not only complying with this mandate, but all other mandates as enshrined in the Joint Resolution.
Today, we are here witnessing another event, which is not only important, but special. Special in the sense that the CBL is signing another MoU with Afriland Bank for the exchange exercise through the Rural Community Finance Institutions (RCFIs), which are the main and only formal financial institutions operating in the capital or strategic cities in 8 of our 15 counties (namely, Nimba, Gbarpolu, Grand Kru, Rivergee, Rivercess, Sinoe, Lofa, and Bong Counties).
In keeping with the MoU, which will be signing shortly, the CBL will deal with Afriland First and AFBLL, in turn, will deal with the RCFI. This means that Afriland will play the normal role of the commercial banks in the exchange exercise, taking responsibility for the exchange of all old banknotes with new banknotes received from the RCFIs to ensure full accountability and transparency.
As we move closer to the March 31, 2024 deadline for the termination of the legal tender status of the legacy banknotes (LS1 and LS2), the role of Afriland in facilitating the exchange exercise in the 8 counties has become more crucial and critical. We commend the Management Team of Afriland for this support and partnership.
Let me also take this time to inform our people about the status of the currency exchange exercise. As of March 11, 2024, the total old banknotes withdrawn from circulation and destroyed by the CBL were LS$21.07 billion of the LS$25.258 billion estimated to have been circulation. This represents about 84 percent of the legacy banknotes reported at end-December 2020. This is a significant achievement, and the Bank extends its appreciation to all stakeholders for their support and cooperation.
In July last year, the CBL, pursuant to Section 25 of the Amended and Restated CBL Act (2020), issued an official gazette, announcing March 31, 2024, as the deadline for the termination of the legal tender status of the legacy banknotes. While the CBL assumed that this timeframe was feasible and realistic, there have been several challenges beyond the control of the Bank, including the general road condition in some parts of the country during last year’s rainy season, the general and presidential elections, the round-off presidential elections and the transition process.
Notwithstanding these challenges, the CBL is determined to meet its target of withdrawing over 90 percent of the old banknotes by March 31, 2024. To achieve this, we need the continuous support of everyone, especially the businesspeople who handle most of the cash in our economy. We have received complaints that some businesses are rejecting the legacy banknotes already.
This action is not endorsed by the CBL. The CBL wants to assure everyone that all banknotes deposited at the commercial banks up to March 31, 2024 will be exchanged for their full value. Therefore, there is no need for panic or fear. No one should reject the old banknotes for no reason. We should not impose additional suffering upon our people! The CBL remains committed to ensuring a smooth exchange exercise. This is why we have taken sufficient time for the exercise because we are sensitive to the condition of our people.
As I end my remarks, let me formally inform the public that the CBL plans to embark on a nation-wide exchange exercise over the next two weeks from March 16-30, 2024 to targeted areas in the country.
The Bank has set up 4 four teams that will implement this plan, including one team that will be stationed at its newly refurbished facility in Voinjama, Lofa County. The other counties are: Gbarpolu, Rivercess, Sinoe, Bong, Nimba, Grand Gedeh, Rivergee, Grand Kru and Maryland Counties. The exercise will continue in other counties through the commercial banks as it has been the case.
With these few remarks, I will give the floor to the Managing Director of Afriland First Bank, Mr. Roberts Nkous and then after that, we sign the MoU.
Thank you for your attention.