CENTRAL BANK OF LIBERIA STRATEGIC PLAN • 2017-2019
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CONTENTS
CONTENTS ...... i FOREWORD ...... iii ACKNOWLEDGEMENTS ...... v ABBREVIATIONS ...... vi EXECUTIVE SUMMARY...... viii SECTION 1: INTRODUCTION ...... 1 SECTION 2: OVERVIEW OF THE CBL ...... 16 SECTION 3: CBL SITUATIONAL ANALYSIS...... 26 SECTION 4: CBL STRATEGIC OBJECTIVES ...... 38 SECTION 5: IMPLEMENTATION OUTLINE ...... 46 SECTION 6: PERFORMANCE MANAGEMENT, MONITORING & EVALUATION ...... 51 ANNEX: CBL STRATEGIC PLAN IMPLEMENTATION MATRIX (2017-2019) ...... 53
FIGURES
Figure 1: General and Core Inflations (October, 2015 - October, 2016) ...... 2 Figure 2- Liberian-US Dollar End of Period and Period Average Exchange Rates (2014 –Oct, 2016) ...... 3 Figure 3- Sub-Regional Currencies Appreciation/Depreciation Rates Vis-à-vis the US Dollar (Oct 2015-Oct 2016) ...... 3 Figure 4: Liberia’s Trade Performance January-September 2015 & January-September 2016 (In Millions, US$) ...... 5 Figure 5: Organizational Structure of the Central Bank of Liberia ...... 20 Figure 6: CBL Strategic Goals ...... 30 Figure 7: Key Interventions by Pillar ...... 38 Figure 8: Liberia’s Development Strategy Framework for 2012-2030 ...... 47 Figure 9: AfT Pillar Structure ...... 48 Figure 10: Critical Success Factors ...... 50 Figure 11: CBL Strategic Plan Management Structure ...... 51
i CENTRAL BANK OF LIBERIA TABLES
Table 1: Sub-Regional Currencies Appreciation/Depreciation Rates Vis-à-vis the US Dollar (End of Period) ...... 4 Table 2: Liberia’s Trade Performance January-September 2015 & January-September 2016 (In Millions, US$) ...... 5 Table 3: Average Global Commodity Prices of Liberia’s Major Exports and Imports...... 7 Table 4: Trend of Personal Remittances (Millions of US Dollars) ...... 7 Table 5: PESTLE Analysis ...... 31
ANNEX TABLES
Table A1: Executive Governor’s Office ...... 54 Table A2: Financial Sector Development Unit ...... 56 Table A3: Enterprise Risk Management Department ...... 58 Table A4: Human Resources Management Department ...... 62 Table A5: Internal Audit Department ...... 64 Table A6: Legal Counsel ...... 67 Table A7: Regulation & Supervision Department ...... 69 Table A8: Research, Policy & Planning Department ...... 72 Table A9: Financial Markets Department ...... 74 Table A10: Banking & Payment Systems Department ...... 75 Table A11: Finance Department ...... 81 Table A12: Management Information Systems & Technology ...... 83 Table A13: General Support Services Department ...... 85
STRATEGIC PLAN 2017 - 2 0 1 9 ii
FOREWORD
The Central Bank of Liberia (CBL), much like the nation it serves, has experienced steady and significant progress over the last ten years – evidenced by the stately building it now calls home, and by its dynamic and passionate staff. I am pleased to have taken the reigns of this great institution on May 12, 2016, joining a distinguished group of individuals who have done their share to keep alive the Liberian economy in spite of the many challenges this nation has faced. Through war and peace, from economic collapse to revival, through Africa’s most severe public health crisis, and back again, our past Governors have braved many a storm, and we gratefully acknowledge their superior contribution to our nation’s development. Building on their legacy, we at CBL have charted the next leg in our journey toward a fully developed, robust and efficient financial system. Our strategy spans three years (2017 – 2019) and rests on three key pillars: i) Financial Sector Reform; ii) Financial Inclusion; and iii) CBL Reform. The Financial Sector Reform pillar represents our commitment to advance the modernization of the financial system to meet international standards for interoperability, efficiency, profitability and security. The Financial Inclusion Pillar highlights the premium that CBL continues to place on lifting our most vulnerable citizens in urban and rural Liberia out of poverty, by giving them access to the affordable financial services that they so richly deserve. Through the CBL Reform Pillar, the enterprise is poised to begin a new chapter in its long journey. Aiming to lead the financial sector’s modernization drive by example, we are further automating our administrative processes to increase efficiency in the use of our time and other resources – and doing our share to spare the environment any unneeded strain. We are also revising our organizational structure to meet the emerging needs of our ever-developing sector. We are adding new entities such as the Financial Markets Department to manage the exciting development of Liberia’s capital markets, and the Financial Sector Development Unit to support our strategic drive to lift every household out of poverty. We are also upgrading the Enterprise Risk Management, Internal Audit, MIS and Human Resources Sections to full Departments, to reflect their key roles in managing our corporate evolution. The plot also thickens within our longstanding departments, where we seek to expand our research capability and continue providing our public and private stakeholders with quality data and policy advice. In the Regulation and Supervision Department (RSD), our inclusion of AML/CFT Unit reflects our commitment to combat money laundering and the financing of terrorism within our financial system. An expanded focus on Digital Financial Services and Consumer Protection is also being pursued and demonstrates our resolve to expand financial product offerings while protecting
iii CENTRAL BANK OF LIBERIA that large portion of our population that remains underrepresented in the financial sector. A new unit in the Research Department will also focus on macroeconomic forecasting as well. As we prepare to implement this plan, we wish to thank H.E. Ellen Johnson Sirleaf, President of the Republic of Liberia, for her continued support and leadership; the Legislature, the Judiciary, and our Cabinet colleagues, for their solidarity and cooperation; and our development partners for their assistance and alignment with our national vision. We also thank our partners in the private sector, whose resilience inspires us to build a financial system that best serves them. Your contribution to the development of this plan, and your support towards its full implementation, will not soon be forgotten.
Milton A. Weeks Executive Governor December 30, 2016
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ACKNOWLEDGEMENTS
The strategic planning process began with internal consultations with senior and general staff providing critical inputs that shaped our collective vision and goals for the Central Bank of Liberia. The vision and goals took shape as we engaged key external stakeholders across government, the private sector and among our development partners, who provided important perspectives on the challenges and opportunities before us. These stakeholders include the Committees of the Senate and the House of Representatives on Banking and Currency; the Judiciary represented by the Commercial Court; the Ministry of State, Ministry of Finance & Development Planning; the Ministry of Agriculture; Ministry of Commerce & Industry; the Governance Commission; former Governors of the Central Bank of Liberia and the National Bank of Liberia; development partners, including the World Bank, International Monetary Fund, the United States Agency for International Development; the African Development Bank, the European Union, and the International Finance Corporation; the Liberia Bankers’ Association; the Liberian Bar Association; the Liberia Institute of Certified Public Accountants; the Liberia Institute of Public Administration; the Liberian Credit Unions Association; the Association of Insurers; the Liberia Enterprise Development Finance Company; microfinance institutions and mobile money providers. Their support during the consultations and validation exercises added valuable insight to the articulation of our goals and our approach to achieving them. Following this highly consultative process, a senior staff off-site retreat was held to more finely state our vision, mission, goals and core values. The retreat also provided an opportunity to begin a critical analysis of the CBL’s political economic, socio-cultural, technological, legal and environmental context, also known as a PESTLE analysis. This process was led by Executive Governor Hon. Milton A. Weeks; Hon. Charles E. Sirleaf, Deputy Governor for Operations; and Dr. Mounir Siaplay, Deputy Governor for Economic Policy; with Ms. Lilian Best, Corporate Policy Coordinator, facilitating the sessions. Supporting the off-site sessions was Dr. Christopher Itsede, Former Director General of the West Africa Institute of Financial and Economic Management (WAIFEM). His firm, Polar-Afrique Consulting provided critical services to review the CBL’s human resources and performance management systems and recommend key actions which have been incorporated into this plan. He was supported in the review process by Mr. Ano Anogwi. We acknowledge and appreciate all our senior staff members, some of whom served as Strategic Plan Champions while continuing in their official capacities. They contributed their time, effort and expertise to help shape and direct this plan; and they did so with the passion, camaraderie and professionalism that are peculiar to the Central Bank of Liberia. Our Board of Governors, with whom the plan begins and ends, guided its development and have given it their final seal of approval. As we hoist this strategy onto their seasoned shoulders, we gladly follow their lead to lift Liberia’s economy to new heights.
v CENTRAL BANK OF LIBERIA
ABBREVIATIONS
ACET African Center for Economic Transformation AfDB African Development Bank AfT Agenda for Transformation ALCO Assets and Liabilities Committee AML/CFT Anti-Money Laundering and Combating Financing of Terrorism ATM Automated Teller Machine BPSD Banking & Payments Systems Department CBL Central Bank of Liberia CSF Critical Success Factor DBI Doing Business Index DMC Debt Management Committee DSA Debt Sustainability Analysis ECF Extended Credit Facility ERMC Enterprise Risk Management Committee ERMD Enterprise Risk Management Department EVD Ebola Virus Disease FD Finance Department FDI Foreign Direct Investment FMD Financial Markets Department FSC Financial Stability Committee FSDIP Financial Sector Development Implementation Plan FSDU Financial Sector Development Unit FX Foreign Exchange GC Governance Commission GDP Gross Domestic Product GIABA Inter-Governmental Action Group against Money Laundering in West Africa GoL Government of Liberia GSSD General Services & Support Department HRD Human Resources Department HRM Human Resource Management IAD Internal Audit Department
STRATEGIC PLAN 2017 - 2 0 1 9 vi IFRS International Financial Reporting Standards IMF International Monetary Fund L$ Liberian Dollars LDA Liberia Development Alliance LEAF Loan Extension and Availability Facility LEC Liberia Electricity Corporation LISGIS Liberia Institute of Statistics and Geo- Information Services LNP Liberia National Police LRA Liberia Revenue Authority M&E Monitoring and Evaluation MACs Ministries, Agencies, and Commissions MCI Ministry of Commerce and Industry MDG Millennium Development Goals MFDP Ministry of Finance and Development Planning MIST (Department of) Management Information Systems & Technology MM Mobile Money MOA Ministry of Agriculture MSME Micro, Small, Medium Enterprises NBFIs Non-Bank Financial Institutions NGDP Nominal Gross Domestic Product NPLs Non-Performing Loans ODA Overseas Development Assistance PESTLE Political, Economic, Socio-Cultural, Technological, Legal & Environmental Analysis RCF Rapid Credit Facility RCFI Rural Community Financing Institution RPPD Research, Policy & Planning Department RSD Regulation & Supervision Department SMART Specific, Measurable, Attainable, Realistic, Time-bound SOP Standard Operating Procedures UNMIL United Nations Mission in Liberia UN WOMEN United Nations Entity for Gender Equality and the Empowerment of Women US$ United States Dollars VSLA Village Savings & Loan Association
vii CENTRAL BANK OF LIBERIA
EXECUTIVE SUMMARY
The Central Bank of Liberia (CBL) was established on October 18, 1999 by an Act of the National Legislature of the Republic of Liberia. The enterprise succeeded the erstwhile National Bank of Liberia (NBL) when it became functional in 2000, with Mr. Elie E. Saleeby as its first Executive Governor. The CBL is led by a Board of five Governors, appointed by the President of Liberia and subject to Senate confirmation, that is responsible to formulate and implement policy. The CBL bears the principal mandate to achieve and maintain price stability in the Liberian economy. To this end, it seeks to preserve the purchasing power of the national currency; promote internal and external equilibrium in the national economy; encourage the mobilization of domestic and foreign savings and their efficient allocation for productive economic activities; facilitate the emergence of financial and capital markets that respond adequately to the needs of the national economy; and foster monetary, credit and financial conditions conducive to orderly, balanced and sustained economic growth and development. Cognizant of the need to enhance its governance, technology and capacity to fulfil this mandate, the CBL has developed a three-year strategy defining key interventions to reform its internal operations and the sector at large, while also promoting financial inclusion. The CBL’s vision is: “to achieve and maintain price stability by ensuring a sound financial system, thereby contributing to the nation’s sustainable economic development.” The mission of the CBL is: “to maintain efficient and effective financial, payment and information systems, and to formulate and implement a prudent monetary policy.” The three goals underpinning the mission and vision are: . Foster a sustainable economic and financial environment through the enhancement of regulatory and supervisory services, and ensure that monetary growth is consistent with economic growth. . Promote the ease of access to, and the affordability of, financial services. . Formulate and implement strong policies and procedures that put the bank in an appropriate position to achieve its vision, mission and mandate. Determining the approach to implement its vision, mission and goals required the conduct of critical analysis of the CBL’s political, economic socio-cultural, technological, legal and environmental (PESTLE) context. The PESTLE analysis, carried out by the full corps of CBL’s senior staff, delved into the key factors that could possibly affect the CBL and its strategy. The exercise also allowed for consideration of the opportunities and challenges associated with each factor, which provided critical insight and contributed to the setting of objectives and work plans. The following key objectives programmed in this strategy illustrate the high premium that this strategy places on enhancing the framework of governance, technology and capacity required to reform the sector and internal operations, and to promote financial inclusion:
STRATEGIC PLAN 2017 - 2 0 1 9 viii . Review the CBL’s legal and regulatory Framework, to assess its local relevance and consistency with international standards; and recommend amendments, as needed; . Robust supervision of all financial institutions to promote their full compliance with the legal and regulatory framework for transparence, accountability, efficiency and inclusiveness; . Establish and fully operationalize the Banking Institute, in collaboration with the Liberia Bankers’ Association; . Enhance the scale, scope and quality of CBL research; . Enhance policy coordination with key stakeholders; . Enhance ease and efficiency of banking operations; . Decentralize banking services for efficiency and inclusiveness; . Complete technological upgrades and automation of processes to increase the ease and efficiency of financial transactions; . Align the governance and oversight of payments systems with international standards . Promote efficiency, integrity and compliance with laws, policies and procedures, in the management of all CBL resources; and . Continue periodic risk assessments to determine the likelihood and impact of risk events. The critical success factors (CSFs) of the strategic plan, once again, fall in the categories of strong governance, modern technology, and high capacity – the key areas that the CBL has identified for significant advancement. The CSFs include sound law and policy, strong institutions, effective policy coordination, efficient processes, effective communication and coordination, speed and efficiency, and optimized performance. To meet the needs of the growing economy and financial sector, the CBL has seized this opportunity to revise its organization structure. In the Economic Policy Division, the Financial Markets Department will be established to develop and regulate Liberia’s capital markets. The Regulation & Supervision Department, under the same Division, has expanded to include the Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) Unit, and will soon also include the Non-Bank Regulation and Supervision Unit, and the Microfinance Unit. In the Operations Division, the Management Information Systems Department will become the Management Information Systems & Technology Department, and the Administration Department will shed its Human Resources (HR) function and become the General Services and Support Department. The HR Unit will be elevated to Department status, along with Enterprise Risk Management Section and the Internal Audit Section, and submit to the Executive Governor’s direct oversight. Also reporting to the Governor is the new Financial Sector Development Unit mandated to drive implementation of the CBL’s financial inclusion policy initiatives and support the coordination of the Financial Sector Development Implementation Plan. Supporting these new and existing reporting lines are policy and operational coordinating structures designed to ensure that all CBL actions align with its core values and support the fulfillment of its mandate. At the policy level, these structures provide Management and the Board of Governors with the critical information and analysis to make decisions with optimal positive impact on the Bank, the financial system and the economy at large. These structures, which will prove critical to the implementation of the strategy through monitoring, evaluation and regular oversight, include: . The Assets and Liabilities Committee (ALCO) . The Enterprise Risk Management Committee (ERMC)
ix CENTRAL BANK OF LIBERIA . The Financial Stability Committee (FSC) The Board, as the highest decision-making body, also recognizes its key role in the national development framework, wherein it is represented by the Executive Governor on the President’s Economic Management Team (EMT), at Cabinet, and in the Liberian Development Alliance which steers implementation of the Agenda for Transformation. The mechanisms to ensure strategy implementation will comprise the development and periodic review of cascading annual work plans for divisions, departments, units and individuals. Business units’ plans will be subject to the Board’s quarterly and annual reviews, while individual performance on planned activities will be evaluated semi-annually. The new Performance Management System being implemented will comprise of supervisor-to-staff reviews and self-evaluations, to foster introspection, frank and constructive dialogue, and determine each staff member’s understanding of their personal role, and that of their team, in the fulfillment of the CBL’s mandate, mission and vision. The process also provides the staff with an opportunity to share ideas for the CBL’s advancement and express their needs and career aspirations. The Board, Management and staff look forward to implementing the CBL strategic plan, determined to overcome the challenges presented by the continued economic recession resulting from the fall in rubber and iron ore prices on the global market, and the lag effects of the Ebola Virus Disease. These have placed high pressure on the exchange rate, prompting CBL’s limited interventions to stabilize prices and defend the Liberian Dollar, while maintaining the appropriate reserve levels prescribed under Liberia’s Extended Credit Facility with the IMF. These challenges have highlighted the need for CBL’s continued support to Government, especially through high quality policy advice to guide the necessary transition from an enclave dependent economy toward one characterized by diversity, value addition and self-sufficiency.
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SECTION 1: INTRODUCTION
This section provides a high-level summary of developments on Liberia’s Real GDP growth, inflationary trend, exchange rate, remittances and international commodity prices of key exports and imports of the Liberian economy for the period October 2015 to October 2016. It also provides an overview of the performance of the financial sector, illustrating the context within which the CBL hopes to fulfill its goals of financial sector reform, financial inclusion and internal reform.
MACROECONOMIC DEVELOPMENTS
GROWTH AND INFLATION Real GDP Growth Real GDP growth for 2016, earlier projected at 2.5 percent, is revised downward to negative 0.5 percent, due mainly to falling production in the mining & panning, forestry, and manufacturing sectors. A sectoral analysis of growth shows forestry is projected to decline to negative 0.7 percent, from 2.0 percent in 2015, while mining and panning is projected to dip further to negative 23.0 percent, from negative 15.9 percent recorded in 2015. Manufacturing is also expected to slump to negative 4.9 percent, from negative 1.5 percent, while services will contract by 0.4 percentage points to 3.9 percent, from 4.3 percent. Agriculture & fisheries is the only sector that is expected to register a higher growth of 6.4 percent, from 0.7 percent recorded in 2015. The rising growth from the agriculture sector is expected to originate from domestic rice, cassava and oil palm production. The key factors to upturning this dismal level of growth performance, however, is a substantial rise in the prices of rubber and iron ore on the global market, increased mechanized gold production, and continued investment in infrastructure such as roads and energy supply. In addition, there is a need to shift away from traditional exports toward value addition exports, in the medium term; and to build the necessary capacity for transitioning the economy from dependence on the “enclave sector” to a more diversified and sustainable economic growth, in the long term. Price Developments Headline inflation at end October 2016 was 9.9 percent, 3.9 percentage points higher than the 6.0 percent recorded during the same period of 2015. The growth in inflation was mainly driven by the depreciation of the Liberian Dollar and the increased oil prices on the domestic market, which resulted from Government’s policy to increase the storage charge to US$0.50, from US$0.20 per gallon, early
1 CENTRAL BANK OF LIBERIA this year. Year-on-year inflation at end December 2016 is estimated at 11.3 percent, while average inflation for the year is estimated at 8.6 percent. Core inflation, which measures the general rate of inflation less food and transport at end October 2016, was 5.7 percent, from 9.6 percent the same period of the previous year. Key risks to the attainment of single-digit inflation for the medium term remain the depreciation of the Liberian Dollar, the level of domestic food production, improved access to markets, the behavior of international oil and food prices; domestic infrastructure investments in electricity & roads, and Government tax policies on key commodities. Figure 1: General and Core Inflations (October, 2015 - October, 2016)
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2015 2016 Core Inflation 10.0 10.9 9.9 5.9 7.9 6.1 10.0 12.1 12.1 10.9 7.6 4.5 5.7 General Inflation 6.0 9.8 8.0 7.0 7.1 7.1 7.2 7.6 8.4 8.4 9.9 8.5 9.9
Source: Central Bank of Liberia EXCHANGE RATE DEVELOPMENTS
Developments in the foreign exchange market showed that the average Liberian Dollar-US Dollar exchange rate depreciated by 11.8 percent to L$98.42/US$1.00 in October 2016, relative to L$88.06/US1.00 recorded in the same period in the previous year. The depreciation was largely explained by declining commodity prices (iron ore and rubber); net injection of Liberian Dollars; the drawdown of the United Nations Mission in Liberia (UNMIL); increases in the GoL’s Liberian Dollar expenditure; and demand for FX to service import payments. This was evidenced by the level of oversubscription in the CBL auction; declined FX intervention by the CBL; the delay in the issuance of money market instruments; and reduction in US Dollar expenditure by Government. For the first 10 months of 2016, GoL’s US Dollar expenditure decreased by 21.4 percent to US$391.7 million, from US$498.4 million in the same period of the previous year. Also, there was an acute rise of 45.8 percent in Liberian Dollar expenditure to L$8.6 billion in the third quarter of 2016, from L$5.9 billion in the third quarter of 2015. In response to these challenges, the CBL took the strategic decision to step up its FX intervention through the auction for June and July 2016; and issued a T-bond in Mid- July and September 2016 aimed at mopping up excess Liberian-Dollar liquidity, mainly from the banking system – key policy decisions that helped to prevent the rapid fall of the Liberian Dollar.
STRATEGIC PLAN 2017 - 2 0 1 9 2 Figure 2: Liberian-US Dollar End of Period and Period Average Exchange Rates (2014 –Oct, 2016)
102.00 98.00 94.00 90.00 86.00 82.00 78.00 74.00
70.00
Jul Jul Jul
Jan Jan Jan
Jun Jun Jun
Sep Sep Sep
Oct Feb Oct Feb Oct Feb
Apr Apr Apr
Mar Mar Mar
Dec Dec
Aug Aug Aug
May May May
Nov Nov 2014 2015 2016
MARKET RATE END OF PERIOD MARKET RATE PERIOD AVERAGE Source: Central Bank of Liberia On the WAMZ front, except for the Ghanaian Cedi whose depreciation rate (4.8 percent) is in the single digit range, the rest recorded double-digit end-of-period depreciation rates. The Liberian Dollar depreciated by 12.6 percent, the Gambian Dalasi by 24.0 percent, the Guinean Franc by 16.7 percent, the Sierra Leone Leone by 30.7 percent, and the Nigerian Naira by 55.2 percent.
Figure 3: Sub-Regional Currencies Appreciation/Depreciation Rates Vis-à-vis the US Dollar (Oct 2015-Oct 2016)
60
50 55.21
40
30 30.7 20 24.02
16.71 10 4.76 12.57
0 Appreciation/Depreciation Rate*
RATE OF DEPRECIATION IN DEPRECIATIONPERCENT RATE OF Gambian Dalasi Ghana Cedi Guinea Franc Liberia Dollar Nigerian Naira S/L Leone
3 CENTRAL BANK OF LIBERIA Table 1: Sub-Regional Currencies Appreciation/Depreciation Rates Vis-à-vis the US Dollar (End of Period)
Appreciation/ End-October 2015 End-October 2016 Depreciation Rate* Gambian Dalasi 40.20 69.86 24.02 Ghana Cedi 3.78 3.96 4.76 Guinea Franc 7,752.62 9,048.48 16.71 Liberia Dollar 87.5 98.5 12.57 Nigerian Naira 196.5 305 55.21 S/L Leone 5,384.25 7,037.65 30.70
Liberian Dollar in circulation at end September 2016 stood at L$9,711.3 million reflecting a growth of 4.2 percent, compared with L$9,324.2 million recorded at the end of the corresponding month in 2015. The growth was due to a 9.2 percent increase in currency outside banks. Currency outside banks grew to L$8,840.7 million at end September 2016, from L$8,094.4 million at end August 2015. Money supply (M1) at end September 2016 grew by 5.2 percent to L$41,224.6 million, from L$39,188.6 million at end September 2015, on the back of increases in demand deposits of 4.1 percent and currency outside of the banking system, as mentioned earlier. Broad money (M2) also expanded by 2.9 percent to L$62,922.1 million at the end of the reporting period, from L$61,134.8 Million at end September 2015. Growth in net foreign assets (NFA) of 10.8 percent, on the assets side, mainly underpinned the growth in M2. The stock of credit to private sector, year-on-year expanded by 10.4 percent to L$36,253.1 million at end September 2016, from L$32,838.9 million in the corresponding period of 2015. The expansion in credit to the private sector came mainly as a result of growth in loans to critical sectors of the economy, including the agriculture sector at 16.1 percent; construction sector, 17.4 percent; and the manufacturing sector, 56.9 percent. The US Dollar share of broad money at end September 2016 was 69.9 percent, reflecting the highly-Dollarized nature of the economy. Economic recovery from the Ebola Virus Disease (EVD) outbreak is expected to continue during the year and into the medium term. Thus, along with the expansion in the economy, broad money supply is projected to grow by 17.4 percent to L$71,193.1 million1 at end 2016, consistent with economic growth, from L$60,627.3 million reported end-2015. RECENT TRADE PERFORMANCE Exports Merchandise export receipts for the nine-month period ended September 2016 declined by 33.9 percent to US$135.0 million, from US$204.0 million during the corresponding period in 2015, occasioned by declines in the country’s major export commodities such as iron ore and rubber. Export proceeds from iron ore, rubber and minerals (gold and diamonds) shrank by 62.0 percent, 8.1 percent, and 5.3 percent, respectively, during the 9 months (January – September) in 2016, compared with the corresponding period in 2015. The declines in export receipts for the country’s two main exports were on account of the ongoing downward trends in the global prices of these commodities.
1IMF and Liberian Authority projection for 2016
STRATEGIC PLAN 2017 - 2 0 1 9 4 Figure 4: Liberia’s Trade Performance January-September 2015 & January-September 2016 (In Millions, US$)
Source: Central Bank of Liberia Imports (on c.i.f basis) Total merchandise import payments (c.i.f) fell to US$1,014.1 million during the review period, from US$1,268.9 million during the corresponding period in 2015. The 20.1% slump in import payments is explained by declines in all of its major sub-categories, namely: food-related imports (by 21.7%), Mineral and fuel related imports, of which petroleum products accounts for 22.0%, and machinery and transport equipment (by 14.9%). The declines in the payments of petroleum products, and food- related imports were largely explained by the effect of the favorable global commodity price, as well as improvement in domestic food production for food-related imports (mainly rice). In the same direction, the drop-in payments for machinery and transport equipment is largely on account of the slowdown in mining and panning in the mining sector and machinery imports related to UNMIL. With the slump in both export receipts and import payments, the effect of the 20.1% drop in import payments significantly improved the country’s trade performance by 17.4 percent.
Table 2: Liberia’s Trade Performance January-September 2015 & January-September 2016 (In Millions, US$)
2015 2016 % Change EXPORTS 204 135.0 -33.9 Iron Ore 110.1 41.8 -62.0 Rubber 46.3 42.5 -8.1 Minerals+ 29.4 27.8 -5.3 Goods Procured in Port++ 8.2 8.0 -3.6 Other Goods Exports 10.0 14.9 48.6
IMPORTS (c.i.f) 1,268.9 1,014.1 -20.1 Food-Related Imports 290.1 227.0 -21.7 o/w Rice 125.0 63.5 -49.2 Mineral, Fuel related Imports 370.2 288.8 -22.0 o/w Petroleum Products 315.5 254.5 -19.3 Transport & Machinery Equipment 275.9 234.8 -14.9
5 CENTRAL BANK OF LIBERIA Other Goods Imports 332.7 263.5 -20.8 Trade Balance (Surplus +), (Deficit -) -1,064.9 -879.1 -17.4 +Include Diamond & Gold ++Goods Procured in Ports by Carriers
Global Commodity Price Declines & Impacts on Liberia’s Trade Performance Average global commodity price index recorded for the first nine months of 2016 stood at 96.7, from 115.8 reported during the corresponding period in 2015. The 19.2% decline in primary commodity prices was largely as a result of weak and uneven global growth prospects, mainly anchoring on weakening global demand from China for major commodities (crude oil, iron ore and rubber). The downward spiral in global prices has, on one hand, negatively impacted Liberia’s trade performance. Iron ore and rubber, which constitute a majority of Liberia’s export receipts, both declined during the reviewed period, thereby posing a risk of reduced foreign exchange. Consider below a brief analysis of price trends for Liberia’s key exports and imports for the first nine months of 2016, as compared to the corresponding period in 2015. Iron ore The average global iron ore price for the first nine months of 2016 stood at US$53.6 per metric ton. When compared with the corresponding period of 2015, the iron ore price fell by 7.9%, reflecting slow global demand for the commodity, mainly due to China’s increased inventory. However, the weakening demand from China and the resulting fall in the price of iron ore was slightly offset by the recent disruption in the supply of the commodity from Australia and Brazil. This development is likely to continue, in the short term, resulting in a slight boost to the price of iron ore. Rubber The global price of rubber during the period under review was recorded at US$1,548.0 per metric ton, from US$1,660.2 per metric ton. The average price of the commodity comparatively declined by 6.8 percent, occasioned by persistent weak demand for the commodity over its close substitute (the synthetic rubber), resulting in supply glut (mainly from Thailand, Malaysia and Indonesia). Crude Oil Crude oil2 price averaged US$40.8 per barrel during the quarter ended September 2016, from an average of US$53.7 per barrel for the same period in 2015. The near quarter percent decline in the price of the commodity was as a result of weak demand in the midst of long-term news of modest recovery arising from US shale oil production, and strong supply of the commodity from non-OPEC countries. Rice The average global price of rice for the first nine months of 2016 rose by 2.2 percent to US$395.9 per metric ton, from US$387.5 per metric ton reported for the corresponding period. Despite the modest increase in supply of rice at the beginning of the period under review, unfavorable weather conditions
2 The price of crude oil is the monthly average of the three-benchmark crude oil price indices: Dated Brent, West Taxes Intermediate and Dubai Fateh.
STRATEGIC PLAN 2017 - 2 0 1 9 6 in key rice-producing economies, especially Asia, resulted in slightly lower production of rice during the period. Table 3: Average Global Commodity Prices of Liberia’s Major Exports and Imports (January – September, 2015 & January – September, 2016) Ave. Price Ave. Price Commodity Unit 2015 2016 Iron Ore US$/MT 58.2 53.6 Rubber US$/MT 1,660.2 1,548.0 Crude Oil US$/barrel 53.7 40.8 Rice US$/MT 387.5 395.9 Source: Index Mundi/IMF
TREND OF PERSONAL REMITTANCES
Net inward personal remittances fell by 15.5% to US$213.0 million during the nine-month period ended September 2016, from US$252.0 million during the corresponding period in 2015, explained by the 14.2% fall in inward personal remittances that outweighed the 12.8% drop in outward personal remittances during the period. The fall in net inward remittances during the period was mainly attributed to reduced personal assistance from relatives and friends abroad amidst weak global performance, and overall economic conditions in the United States—Liberia’s principal source of inward personal remittances (Table 4). Table 4: Trend of Personal Remittances (Millions of US Dollars) Jan – Sep 2015 Jan – Sep 2016 Y-o-Y % Change Inward Personal Remittance 481.1 412.8 --14.2 Outward Personal Remittance 229.1 199.7 --12.8 Net Inward Personal Remittance 252.0 213.0 --15.3 Source: Central Bank of Liberia
7 CENTRAL BANK OF LIBERIA
FINANCIAL SECTOR PERFORMANCE
GENERAL OVERVIEW
The financial sector is composed of nine banks, with 87 branches across the country and two licensed Non-Bank Financial Institutions (NBFIs). There are 20 insurance companies operating in the sector with 30 branches across the country. The insurance industry also has two insurance brokerage firms that were licensed in 2016. Licensing of insurance brokers and agents is still ongoing. The sector also has 126 registered forex bureaus, comprising 74 Category A and 52 Category B. DEVELOPMENTS IN THE BANKING SECTOR
Banking sector performance continues to show improvements in key balance sheet items. Overall, these results indicate expanded growth rates on a year-on-year basis. Total assets increased by 5.4%, total loans by 12.3%, deposits by 3.8% and total capital by 21.4%. The banking system continued to be capitalized and liquid, reflecting continuous confidence in the system. While the industry has posted net profits for 2016, profitability remains a major challenge to the sector, due to poor asset quality and relatively high overhead costs. Data on the banking industry indicates that these growth rates can be attributed to an increase in bonds and long term investment resulting from the issuance of T-Bonds, and the injection of fresh capital resulting from the licensing of GN Bank. Interest Rates The interest rates on savings deposits have remained stable at 2% to 2.5%, and on time deposits at 3% to 4%. Interest rates charged on loans and advances are between 14% and 17%. Capital The industry’s Capital Adequacy Ratio (CAR) increased by 3.5 percentage points to 21.4%. Measured by the Capital Adequacy Ratio (CAR), all the banks are in excess of the minimum requirement of 10 percent. In terms of the minimum required net worth, all banks are in compliance. Asset Quality Total loans and advances increased by 12.3% to L$37.890 billion. The total loan portfolio was distributed among 14 main sectors, with the trade sector accounting for the highest percentage of 38.8% compared to 34.1% in the corresponding period in 2015, followed by the construction sector accounting for 14.4%. Regarding non-performing loans (NPLs), the industry’s non-performing loans ratio improved by 2.9 percentage points to 13.5%. In absolute terms, non-performing loans decreased by 15.1% to L$4.484 billion.
STRATEGIC PLAN 2017 - 2 0 1 9 8 Status of the Policy Measures on NPLs The improvement in the NPL ratio can be attributed to several factors, including CBL’s policy measures on barring non-compliant, delinquent borrowers from accessing banking services and publication of the names of non-compliant delinquent borrowers. These measures have compelled some delinquent borrowers to regularize their loan status with their banks. The CBL intends to continue this process. Earnings The industry recorded gross earnings of L$7.371 billion, which represents an increase of 11.1% and operating profit of L$1.813 billion before loan loss provisions and taxes, indicating an improvement of 9.5%. While the banking industry has posted net profits in 2016, the quality and stability of earnings have remained a challenge due primarily to high non-performing loans and the relatively high cost of operations. Less than 50% (about 49.1%) of the industry’s earnings, are from interest income, indicating the low level of financial intermediation. Deposits Deposits, being the dominant source of financing of the banks’ asset base, recorded an increase of 3.8% to L$54.711 billion. In terms of composition, private corporations and businesses accounted for 58.2% of the total deposit liabilities, followed by retail (individual) deposits with 29.2%, and non- financial public corporations accounting for 10.1%. Liquidity The banking system continues to maintain a strong liquidity position of 36.8%, as at end October 2016. All banks recorded liquidity ratios well above the minimum requirement of 15%. Off-Balance Sheet Engagements The industry’s total off-balance sheet items, comprising guarantees and letters of credit, declined by 6.7% to L$5.23 billion, when compared to the same period in 2015. This sharp decline in the year-on- year trend reflects a slowdown in economic activities in the country, as a result of the global economic challenges during the reporting period. DEVELOPMENTS IN THE INSURANCE SECTOR
The Insurance industry’s performance, on a year-on-year basis, showed mixed results in the balance sheet. Total assets grew by 42% to L$5.297 billion. The increment is primarily attributed to increase in premium income and injection of additional capital by insurance companies. Total capital recorded an improved growth of 53% to L$2.970 billion. On the other hand, investment improved by 6.89% to LD785.919.00 million. The marginal improvement is due to investment in CBL T-bills. On the down side, the industry reported a dip in its average claims ratio by 12.09%, which is far below the regulatory claim ratio of 40% to 60%. In effect, the industry is either not paying claims as its primary basis for doing insurance business, or its underwriting efficiency has improved. Also during the period under review, total gross premiums (comprising life and non-life businesses) increased by 30.11% to LD678.606 million. The rise in premium income was fundamentally driven by the life business. Similarly, net premiums recorded a growth of 9.3% to LD700.535 million. On the
9 CENTRAL BANK OF LIBERIA contrary, net income decreased astronomically by 207% to negative LD32.607 million due to high management expenses. Premiums Analysis The industry recorded total gross premiums of L$882.991 million comprising life and non-life. Life business, comprising mostly group life and medical, accounted for 51.4% of gross premiums; while non-life business, comprising mostly motor and general liability covers, accounted for 48.6% of the gross premiums. Update on insurance markets integration in West Africa The Memorandum of Understanding (MOU) leading to the formation of the West African Insurance Supervisors Association (WAISA) has been signed by all five member countries including Liberia and the Gambia. The objectives of the MOU are to: . Establish the West African Insurance Supervisors Association; . Facilitate Group-wide Supervision; . Enhance solo supervision of insurance entities by the competent authorities; . Provide a permanent forum for cooperation; and . Foster a better understanding of supervisory practices and more efficient and effective supervision. WAICA RE The West African Insurance Companies Association Reinsurance Company (WAICA RE), in collaboration with the CBL, conducted a three-day insurance training workshop for the industry from October 24 to 26 2016. The workshop was designed to strengthen the technical capacity of the industry in reinsurance treatment of life and non-life contracts. ECOWAS Brown Card In line with the Protocols of the ECOWAS Brown Card Scheme, the CBL has held consultative meetings with the industry regarding the status and operations of the Liberian Brown Card Bureau (LNB) of the Scheme. In its most recent intervention meeting with the industry, Liberia settled its indebtedness to the Scheme. The CBL is currently collaborating with the LNB to ensure compliance with the Protocols and its attendant resolutions. Motor Vehicle Third Party Liability Insurance Scheme An MOU has been agreed upon, in principle, among the Central Bank of Liberia, Ministry of Transport, the Liberia National Police and the Association of Insurers of Liberia for the implementation of the Compulsory Motor Vehicle Third Party Insurance Liability Scheme. The MOU is intended to establish a mutual basis for collaboration and consultation among the parties to achieve the following common objectives: a) Foster efficient and effective enforcement mechanism for the Motor Vehicle Third Party Liability Insurance Scheme (TPL Scheme); b) Develop strategies to step-up the frequency of enforcement of the TPL Scheme; c) Review the current TPL’s premium rates and offer appropriate recommendations, based on statistical data; and d) Promote consumer protection, insurance literacy and education initiatives.
STRATEGIC PLAN 2017 - 2 0 1 9 10 OTHER DEVELOPMENTS AFFECTING THE FINANCIAL SECTOR Compliance with the Basel Core Principles The CBL has a risk-focused regulatory and supervisory system, comprising a practical and inclusive program of off-site surveillance that is well combined with its on-site supervision. The Regulation and Supervision Department conducted the first self-assessment of its system in 2005, against the Basel Core Principles (BCP), with technical assistance from the U.S. Department of Treasury. The second assessment, which began in 2014, was halted due to the EVD outbreak that year. The process resumed in 2016 and halfway through, conducted by an internal committee comprising the Director and all senior staff of the Regulation and Supervision Department (RSD). The process benefits from the training that several RSD staff have recently received on BCPs, and their improved understanding of the core principles. Risk Based Supervision The CBL continues to improve its Risk Based Supervision (RBS) processes and enhance the capacity of its staff. The CBL has procured and deployed the Valtech Regulatory Compliance and Supervision System (vRegCoSS) banking software, a robust banking supervision software to enhance its monitoring of, and policy response to, developments in the banking system. The system is expected to automate most processes in the banks and improve data quality. Additionally, CBL continues to build and improve the capacity of examiners through training and professional certification. CBL examiners have been certified by the West African Institute for Financial and Economic Management (WAIFEM), the Central Bank of Nigeria Training Center and, most recently, the Federal Deposit Training Institute in the USA. About twenty-four RSD staff are expected to enroll in the on-line FSIConnect tutorial program that keeps them abreast of changes in supervisory and regulatory issues around the world. Regulation and Supervision Department conducts joint examination exercises with counterparts from the Central Bank of Nigeria for three of our banks. CBL, in collaboration with WAIFEM conducted training in Corporate Governance and Risk Management for members of the Board of Directors of commercial banks. Examination reports have been providing useful information about risks, governance, financial and other issues facing commercial banks. Progress on Financial Reporting Standards (IFRS) Commercial banks in Liberia began reporting in line with the International Financial Reporting Standards (IFRS) since 2013; and, to date, all audited accounts of commercial banks are published in line with IFRS. The CBL published IFRS Guidelines in July 2016 to provide clarification on issues arising since the migration to IFRS, among other things. Specifically, the new guideline addresses the treatment of the difference between IFRS impairment and regulatory provisions. Adoption of Macro-Prudential and Financial Stability Framework In 2013, the CBL adopted a stress testing framework, and issued a stress testing guideline to the banking sector in 2014. The CBL sees the adoption of the stress testing framework as an extension of its Risk-based Supervision framework and a precursor to the development of a full-fledged macro- prudential policy framework. The CBL has also begun developing a financial stability report. With the launching of the electronic supervision software, vRegCoSS, in April 2016, data integrity and availability are expected to improve, thus improving the CBL’s macro-prudential capability. Moreover,
11 CENTRAL BANK OF LIBERIA the CBL has also requested technical assistance from AFRITAC WEST II for the development of a macro-prudential framework. Anti-Money Laundering /Counter Financing of Terrorism (AML/CFT) The Central Bank of Liberia, in its quest to ensure a safe and sound financial sector and to strengthen the AML/CFT Regime, established the AML/CFT Unit within the Regulation and Supervision Department. Currently composed of six staff, including the Head and one Senior Examiner, the unit’s four remaining staff are newly employed and currently undergoing intensive AML/CFT training. The unit’s establishment demonstrates the CBL’s commitment to an effective AML/CFT regime that conforms with international standards and to adequately, and to a the strengthening of examiners’ expertise in the area of AML/CFT.
As further demonstration of its commitment to a robust AML/CFT Regime in Liberia, the CBL has: . Developed an AML/CFT Examination Manual for examiners’ use during on-site examination processes. Generally adopting a risk-based approach to supervision, this manual and provides step-by-step guidance to examiners during onsite examinations; and ensures their compliance with the AML/CFT Act of 2012, the Central Bank of Liberia (CBL), the AML/CFT Regulation No. CBL/RSD/004/2013; and other regulations, directives and circulars issued by the CBL and the Financial Intelligence Unit of Liberia (FIUL); . Commenced on-site examinations and follow-up exercises for five of the nine commercial banks; . Held an introductory meeting with heads of insurance companies concerning AML/CFT issues affecting the industry; . Trained examiners on the use of the Examination Manual; and . Trained compliance officers of commercial banks on the AML/CFT examination processes and the expectations of examiners. Collateral Registry The Collateral Registry was established in June, 2014 with the mandate to register security interest over movable assets used as collateral to obtain credit facilities from secured parties. Users of the Collateral Registry System continue to increase, as the system now has 49 registered users that comprise: banks, microfinance institutions, non-bank financial institutions, individuals and others. Among these registered clients, eight institutions are effectively using the Registry System. The full utilization of the system remains a concern and challenge to the CBL Collateral Registry, as the Registry will begin engagement with these clients to reiterate the importance of the system in the financial industry. Mobile Money Services The CBL has licensed two Mobile Money Providers; Lonestar Cell MTN Mobile Money Incorporated (LCMMMI) and Cellcom Technologies Inc., in the country. Reports submitted to the CBL indicate that Mobile Money services are presently available and operational in the fifteen counties using agents including banks’ branches, foreign exchange bureaus, merchants’ businesses, petrol stations, etc. to provide the services. There has been continuous increase in the level of payment of bills and services
STRATEGIC PLAN 2017 - 2 0 1 9 12 over the period. Several institutions have also committed to paying employees’ salaries via Mobile Money. During the period under review, the total number of users of Mobile Money services was 845,910. This shows that about 22% of the Liberian population has gained access to financial services using Mobile Money services. A total number of 1,636 mobile money agents are operating within the agent network across the country. In the same vein, the total volume of mobile money transactions for the period under review was 7,865 for United States Dollar Transactions and 53,577 for Liberian Dollar Transactions. The total airtime top up transactions made through Mobile Money for both United States Dollars and Liberian Dollars Transactions amounted to US$9.596 million and L$3.996 million, respectively. The total value of transactions made for Mobile Money during this period under review amounted to US$165,301M and L$49.495M. Rural Community Finance Institutions There are 11 Rural Community Finance Institutions (RCFIs) operating in 8 counties. One additional RCFI (Foyah) has been completed and will soon open to the public. The RCFIs continue to provide basic financial services in the rural parts of the country, particularly transfer services. Eight of the RCFIs, in collaboration with Afriland Bank, are already transacting in the payment of civil servant salaries, granting of salary overdrafts to civil servants and accepting customers’ deposits in the leeward counties, as well as carrying out Western Union and Money Gram local transfers. The total number of civil servants now being paid by the RCFIs for the period under review is 5,134, while total depositor accounts opened was 6,008. The total deposit liabilities amounted to LD$73.780 million and USD$366,708; with a total loan (Salary Overdraft) portfolio of LD$12.524 million. Additionally, the total volume of transfer transactions occurring during the period was as follows: Money Gram US$280,833; Western Union US$81,255; and Local Transfers, US$145,434 and LD$38.116 million. To ensure the sustainability of the RCFIs, the CBL has developed a new regulatory and supervisory framework for the sector. In addition, four policy and procedure manuals have been finalized and are pending CBL approval to be issued to the RCFIs. The manuals include board and accounting policy, credit and operational manuals. Developments in Payments Systems As part of wider efforts to achieve economic integration in West Africa, Liberia became a beneficiary of funding assistance from the African Development Bank (AfDB) through the West Africa Monetary Institute (WAMI) to fast track implementation of a payments system modernization project and thereby contribute to the development of a major component of Liberia’s financial infrastructure. In 2016, the CBL made tremendous strides in implementing all the major components under the project, including a Real Time Gross Settlement System (RTGS), an Automated Checking Processing System (ACP) and Automated Clearing House (ACH), a Scripless Securities Settlement System, and a Core Banking Application. The project also funded the construction of state-of-the-art data centers (main and disaster recovery sites) serving as the backbone for the payments system infrastructure. These systems are beginning to transform the payments landscape, by enhancing service delivery to the banking public and achieve the primary goal of the reform – to provide safe, convenient and affordable payments services in Liberia. Additional reform efforts targeted at promoting financial inclusion and facilitating interconnectivity included the roll out of the National Switch project meant to enable cards payment, electronic funds
13 CENTRAL BANK OF LIBERIA transfer (EFT), and mobile interoperability within the country. This will not only act as a catalyst to promote financial inclusion for the un-banked population, but will significantly increase the ease of access to financial and payment services for all Liberians. Policies, Regulations & Guidelines Issued in 2016 Regulations Regulation No. CBL/RSD/001/2016, Concerning Regulation on Banking Hours was issued on March 23, 2016 to reflect the adjustments made in the banking hours during the EVD outbreak. As one of its policy measures during the EVD crisis, the CBL adjusted the banking hours downward to reduce the operational costs that banks incur. Regulation No. CBL/RSD/002/2016, Concerning Regulation for Rural Community Finance Institutions was issued on August 19, 2016. The regulation provides the minimum prudential standards for RCFIs to follow in ensuring professionalism and integrity in the provision of financial services to the rural population. The regulation covers licensing, capital, liquidity, corporate governance and risk management requirements. Its objective is to guide rural residents in the proper approach to establishing, managing, and controlling RCFIs. Regulation No. CBL/RSD/003/2016, Concerning Regulation for Required Reserves for Bank- Financial Institutions. This Regulation was issued on November 7, 2016 to replace Regulation No. CBL/RESD/002/2014 and Guideline No. CBL/E-GOV/076/2005. Under the new Regulation, commercial banks are to meet the reserve requirement on average by maintaining prescribed balances in their operating accounts at the CBL. This allows for banks to actively manage their reserve balances, but does not allow banks to fall below a given reserve floor (which is 50% of the Required Reserves) on any given date. The new Regulation revised the Reserve Requirement Ratio from 15% to 10% for United States Dollars, and from 22% to 25% for Liberian Dollars. Regulation No. CBL/RSD/004/2016, Concerning Regulations on Payment of Inbound Money Transfers was issued on November 15, 2016. This Regulation specifies the currencies in which payments of inbound money transfers are to be made and the payment of the proceeds of the transfers to the CBL. The Regulation applies to all licensed financial institutions engaged in money transfer services, including Western Union, MoneyGram and similar services (the regulation does not affect transfers done through customer accounts at commercial banks). Under the Regulation, 25% of inbound transfers are required to be paid in Liberian Dollars and the remaining 75% are to be paid in United States Dollars. The US Dollar equivalent of the 25% share of transfers paid in Liberian Dollars are to be paid to the CBL. Regulation No. CBL/RSD/005/2016, Concerning Regulation for the Licensing and Supervision of Money Remittance Entities was issued on November 15, 2016. This is an amendment to Section 4.01 (IX) of Regulation No. CBL/SD/03/2004. This amendment requires that payment of inbound transfers shall be made in accordance with CBL/RSD/004/2016, Concerning Regulations on Payment of Inbound Money Transfers. Guidelines Guideline Concerning Accounting & Financial Reporting for Banks was issued on July 28, 2016. With the adoption of International Financial Reporting Standards (IFRS) by commercial banks, this document provides guidance to the industry on specific issues relating to IFRS. Previously, the financial reporting of banks had been largely in line with the United States Generally Accepted Accounting Principles (US-GAAP). The previous accounting manual which was issued by the CBL in
STRATEGIC PLAN 2017 - 2 0 1 9 14 2005 did not address most of the accounting issues as required by IFRS. Given that there are many options under IFRS, the Guideline, which received inputs from the banking industry and their external auditors, provides common standards for IFRS compliant financial reporting among commercial banks. Guideline on Standing Credit Facility for Commercial Banks was issued on October 31, 2016. The Guideline represents an improvement of the previous ‘Guideline on Standing Credit Facility for Commercial Banks’, which was issued in 2005. It has been amended in accordance with the IMF Technical Mission’s recommendations to enhance and develop policies for the provision of liquidity support to banks. This Guideline sets minimum requirements for the provision of temporary liquidity support to banks that experience unexpected shortfalls in funds needed to ensure full and timely settlement of clearing obligations. It outlines the eligibility criteria, risk management policies and operational procedures that are required in the provision of liquidity funding by the CBL. Directives & Public Notices Directive No. CBL/RSD/DIR/002/2016 on Commercial Banks’ Submission of Regulatory Returns to the Central Bank was issued on October 31, 2016. With the introduction of the Valtech Regulatory Compliance and Supervision System (vRegCoSS), a web•based application that caters for the supervisory, surveillance and regulatory needs of the CBL in monitoring licensed financial institutions in Liberia and addressing macro/micro prudential issues, the CBL has issued this directive instructing all commercial banks to submit returns to the CBL using only the vRegCoSS application. The vRegCoSS provides the tools to facilitate timely decision making and makes available a wide range of information about the financial system, on demand, thereby increasing the operational efficiency of the CBL’s Regulatory and Supervisory function. The Directive prescribes seven clusters or frequencies of reporting, namely: Daily, Weekly, Monthly, Quarterly, Semi-Annual, Annual and As-and-When. It also prescribes penalties for late and wrong reporting. Central Bank of Liberia Public Notice on Licensed Financial Institutions Operating in Liberia – CBL/SD/PN/001/2016 was issued on October 18, 2016. This Notice informs the public of all banks, insurance companies, rural community finance institutions, non-bank financial institutions, microfinance–deposit taking institutions and foreign exchange bureaus that are licensed/authorized by the CBL and are currently operating in Liberia.
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SECTION 2: OVERVIEW OF THE CBL
This section describes the CBL’s internal context leading up to the development of the strategic plan, and outlines its vision, mission, core values, as well as its newly revised structure. The cornerstone of the CBL’s strategy is the Act Authorizing the establishment of the Central Bank of Liberia, passed on October 18, 1999 whereby the CBL succeeded the erstwhile National Bank of Liberia. The Act sets the maintenance of price stability as the CBL’s primary objective, and bestows upon it the following mandate in support of that objective: to preserve the purchasing power of the national currency; promote internal and external equilibrium in the national economy; encourage the mobilization of domestic and foreign savings and their efficient allocation for productive economic activities; facilitate the emergence of financial and capital markets that are capable of responding to the needs of the national economy, and foster monetary, credit and financial conditions conducive to orderly, balanced and sustained economic growth and development. The impact of the CBL’s macroeconomic interventions is felt most at the household level where access to infrastructure, basic services and employment remains a challenge. Acknowledging this fact, the CBL has supported the Government of Liberia’s successive medium term development agendas, the Poverty Reduction Strategy (2008-2011) and the Agenda for Transformation (2012-2017) with its own efforts to promote inclusiveness in the financial sector. Such interventions have focused on supporting the expansion of financial – and particularly microfinance – services across the country, the promotion of mobile money and payments, the upgrading of the technological infrastructure that drives Liberia’s financial system, and the enhancement of the governance framework that guides the financial sector. Such interventions have been supported by the United Nations Capital Development Fund (UNCDF), United Nations Development Program (UNDP), which supported the Launching of an Inclusive Financial Sector to provide capital for microfinance lending through existing microfinance institutions; by UN WOMEN, which provided support to organize and fund Village Savings and Loan Associations (VSLAs); and most recently by the World Bank through the Financial Sector Development Implementation Plan (FSDIP), which was launched in November 2016 to promote a coordinated approach to the development of the sector placing emphasis on strong governance and financial inclusion. The CBL is also bound by the Maya Declaration, to which Liberia announced its commitment in 2013 at the Alliance for Financial Inclusion’s (AFI) Global Policy Forum in Kuala Lumpur, Malaysia. By that declaration, the Government of Liberia and the CBL have demonstrated their commitment to promoting financial inclusion by: enhancing existing guidelines to promote greater competition in the delivery of mobile financial services and expanding their coverage to at least fifty percent of Liberia’s rural areas; and promoting the establishment, and the sound and efficient management, of Rural Community Finance Institutions. Through the Declaration, the CBL also commits to strengthening consumer protection and the market conduct regulatory framework for the financial sector, taking into account the microfinance and SME
STRATEGIC PLAN 2017 - 2 0 1 9 16 sectors, to ensure the enforcement of: effective help and redress mechanisms; effective sales and marketing practices; and effective disclosure and transparency standards. Effective communication and information dissemination around financial inclusion is also prioritized in Liberia’s Maya Declaration commitment, which promises effective financial literacy and education programs for the unbanked and vulnerable populations, while also providing relevant policymakers with the financial inclusion data required for effective decision-making on key development interventions. The publication of a general annual report on the state of financial inclusion in Liberia and systematic engagement with relevant policymakers are key CBL commitments aimed at positively influencing Government’s actions to promote financial inclusion and achieve the following financial inclusion targets: . Increase the number of the formally banked population by 30% by 2016; . Increase the number points of financial services by 50% by 2017; and . Reduce the number of financially excluded by 40% by 2017. The CBL’s three-year strategic plan, which aims to build on these interventions and fulfill existing commitments, also demonstrates the CBL’s full ownership of the FSDIP interventions while highlighting the internal enhancements required to support its implementation and the fulfilment of the CBL’s statutory mandate. A key component of that internal reform is the enhancement of our human resources and performance management system, which has undergone intensive review since September 2016. Key recommendations emanating from that review include revision of the organogram to meet the emerging needs of the economy and the financial sector; the elevation of the Human Resources, Enterprise Risk Management, MIS and Internal Audit sections to Department level, highlighting their critical roles in the enterprise; the automation of the HRM processes; and the enhancement of our performance evaluation mechanism to strengthen its link to the fulfillment of the CBL’s key objectives. The internal reform, which represents in many respects a cultural as well as administrative transition in the enterprise, began with the visioning exercise held at the CBL’s off-site senior staff retreat in September 2016. That process allowed for a consultative process of articulating the CBL’s vision, mission, core values and strategic goals.
VISION
“To achieve and maintain price stability by ensuring a sound financial system, thereby contributing to the nation’s sustainable economic development.”
MISSION
“To maintain efficient and effective financial, payment and information systems, and to formulate and implement a prudent monetary policy.”
17 CENTRAL BANK OF LIBERIA STRATEGIC GOALS FINANCIAL SECTOR REFORM
“Foster a sustainable economic and financial environment through the enhancement of regulatory and supervisory services, and ensure that monetary growth is consistent with economic growth.” FINANCIAL INCLUSION
“Promote the ease of access to, and the affordability of, financial services.” CBL REFORM
“Formulate and implement strong policies and procedures that put the bank in an appropriate position to achieve its vision, mission and mandate.”
CORE VALUES
The core values identified by the CBL’s Management and staff, and endorsed by its Board of Governors, demonstrate our collective commitment to providing the exemplary leadership of the financial sector that will catalyze its reform in line with our strategic direction.
Adhering fully to the legal and statutory framework governing the system, holding Integrity fast to morality and ethics, with strong oversight and zero tolerance for corruption. Optimizing the use of time, energy and other resources in the fulfillment of our Efficiency objectives. Promoting creativity in all we do, applying unorthodox strategies to bring effective Innovation solutions to current and future economic challenges. Focusing on values that empower open-mindedness, promote healthy conflict, value Inclusiveness new perspectives, and avoid judgmental attitudes. Increasing the accessibility and affordability of resources and opportunities. Getting employees to cooperate, using their individual skills and providing Teamwork constructive feedback, despite any personal conflict between individuals. Embracing a diversity of view and talents to promote financial sector development. Exhibiting honesty and openness in all dealings and interactions. The implication of transparency is that all of CBL’s actions should be scrupulous enough to bear public Transparency scrutiny. Providing clear and accessible information, in line with our legal and policy framework. Having the ability to make judgments free from discrimination or dishonesty. The Fairness value of Fairness is about the process of decision-making, not the outcome. Fostering a culture of meritocracy and equal opportunity to grow and succeed.
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ORGANIZATIONAL STRUCTURE
Concurrent with its strategic planning exercise, the CBL engaged in a process to revise its organizational structure to support the achievement of its vision, mission and goals. The structure comprises three divisions, 10 departments, and 21 units. The Departments of Human Resources, Enterprise Risk Management and Internal Audit report directly to the Executive Governor. Figure 5 shows the organizational structure, which is followed by an outline of the mission and functions of the departments and units under each division, in the following order: i) Governor’s office; ii) Economic Policy Division; and iii) Operations Division.
19 CENTRAL BANK OF LIBERIA Figure 5: Organizational Structure of the Central Bank of Liberia
Board Of Governors Internal Executive Audit Dept Governor
Corporate Chief of Staff Secretariat
DG Economic DG Policy Operations
Research, Reg. & Sup. Human Banking & Treasury Microfinance Mgmt. Info Policy & Plng. Financial Resources Gen. Support Dept. Markets Dept. Payments Operations Operations Finance Dept. Sys. & Tech Svc. Dept. Dept. Dept. Systems Dept. Unit Unit Dept. Microfinance Policy Unit Fin. Sector Maintenance Unit Dev. Unit Banking & Financial Currency Unit Reporting Unit Bank R&S Section Statistics Unit Unit Legal Counsel Payments Procurement Budget & Unit System Unit Payroll Section Macroecon. Non-Bank Enterprise Risk Forecasting R&S Unit Management General Unit Internal Services Unit Dept. Control Unit AML/CFT Unit Corporate Communica- tions Insurance Unit Advisor, External Relations Consumer Protection Unit
STRATEGIC PLAN 2017 - 2 0 1 9 20 GOVERNOR’S DIVISION Human Resources Department The mission of the Human Resources Department is to manage and coordinate the implementation of human resource policies that support the CBL’s ongoing efforts to successfully anticipate, adapt to and meet the emerging needs of the Liberian economy. Its functions are to: 1. Implement policies to recruit, retain and motivate a qualified and effective workforce; 2. Oversee the consistent implementation of an effective performance management system; 3. Manage training and development, and career development programs consistent with staff and CBL needs; 4. Implement succession planning and benefits distribution, and other employee relations policies; 5. Maintain proper records, and facilitate staffs’ access to their respective records; 6. Promote health and safety of staff on the job; and 7. Provide guidance and counseling.
Enterprise Risk Management Department The mission of the Enterprise Risk Management Department is to drive a comprehensive program that supports the identification of the CBL’s mission-critical risks, assess how to manage these risks, and establish a system for prioritizing and reporting these risks and their associated mitigation strategies. Its functions are to lead the development and implementation of risk management across the bank by: 1. Developing risk management strategies, principles, frameworks and policies; 2. Implementing appropriate risk management processes and methodologies; 3. Advising Management and business units on risk management; 4. Monitoring the application and effectiveness of risk management processes; and 5. Coordinating appropriate and timely delivery of risk management information to decision makers. Internal Audit Department The mission of the Internal Audit Department is to audit the operational activities and accounts of the Central Bank on a continuous and regular basis. Its functions are to: 1. Provide independent, objective assurance, consulting, and services that can assist in improving the CBL’s overall activities and operations; 2. Objectively evaluate and improve the effectiveness of the CBL’s risk management, control and governance processes; and 3. Conduct all audits in accordance with internationally accepted auditing standards.
21 CENTRAL BANK OF LIBERIA Financial Sector Development Unit The mission of the Financial Sector Development Unit is to ensure the effective planning for, and full implementation of, the CBL’s current and future strategic pursuits. These include the objectives programmed in this Strategic Plan as well as the FSDIP, with special focus on the financial inclusion objectives. Its functions include: 1. Implement, monitor, evaluate and report on the progress of specific activities in 5-year FSDIP to CBL management and the Board of Governors; 2. Liaise with other WAMZ central banks on matters related to financial markets developments; 3. Carry out research on specific areas of interest to financial markets developments; 4. Set up and manage Financial Markets Resource Centre where all information relating to financial markets development shall be kept and disseminated; 5. Maintaining a dashboard to track all strategic outcomes, for follow up and reporting purposes; 6. Support the development and implementation of innovative approaches to promote financial literacy and public awareness of financial sector developments, incorporating the promotion of digital financial services and the further development of the payment system in Liberia; 7. Serve as the CBL’s outreach arm for established financial institutions such as Village Savings & Loans Associations, Credit Unions and Microfinance Institutions, and mass-based grassroots’ organizations; and 8. Support the development and implementation of policies, programs and schemes aimed at the effective, efficient and sustainable delivery of financial services to both the banked and the unbanked sectors of the economy.
ECONOMIC POLICY DIVISION Research, Policy & Planning Department The mission of the Research, Policy & Planning Department is to conduct evidence-based research to facilitate the full realization of the CBL’s monetary policy stance, which remains the achievement of broad exchange rate stability as the intermediate target for the maintenance of a low and stable inflationary environment that induces sustainable flow of capital and promotes a sound financial system, fostering sustained and balanced economic growth and development. Its functions are to: 1. Conduct economic and statistical research and analysis on monetary, financial and other macroeconomic issues; 2. Produce periodic publications detailing research findings on domestic and global economic policy issues; and 3. Prepare regular macroeconomic updates and briefings to guide Management’s engagement with Government stakeholders and development partners, and to respond to inquiries from multilateral institutions or other entities, on behalf of the Bank.
STRATEGIC PLAN 2017 - 2 0 1 9 22 Regulation & Supervision Department The mission of the Regulation and Supervision Department is to ensure the safety and soundness of the financial system, to support the CBL’s overall objectives of financial stability and economic development of Liberia. Its functions are to: 1. Promote sound ethical practices, consumers’ empowerment and good market conduct practices in the financial system; 2. Enforce compliance to the legal framework guiding the financial system, and conducting periodic reviews of the framework to meet emerging needs; and 3. Support the CBL’s financial inclusion agenda by providing support to, and oversight of, the enhancement of systems and processes in the various microfinance institutions.
Financial Markets Department The mission of the Financial Markets Department is to develop, operate and regulate robust Liberian Money and Capital Markets. The Department is also responsible to provide benchmarks for the conduct of primary market operations, professional practice in monitoring the forex market and reserves management. Its functions are to: 1. Issue government securities on behalf of the Government of Liberia; 2. Manage and providing oversight on operations of government securities; 3. Manage the foreign exchange reserves in compliance with the Board of Governors’ approved Reserves management policy in line with the three principles of safety, preservation of capital and liquidity; 4. Promote stability in the foreign exchange and money markets; 5. Market Research and Product Development; and 6. Formulate policy proposals, and Implement plans for deepening financial markets.
OPERATIONS DIVISION Banking & Payments Systems Department The mission of the Banking and Payments System Department is to provide banking services for the government, parastatal entities and commercial banks.as well as to spearhead the modernization process of the payments systems in Liberia. Its functions are to: 1. Make settlement through clearing and check encashment in favor of public entities; 2. Ensures accurate postings of entries, and the timely delivery of statements and reconciliation of accounts; 3. Distribute Liberian Dollar banknotes and foreign currencies to the public; receive moneys deposited into government accounts maintained at the CBL and transfer cash from central office to rural payment centers;
23 CENTRAL BANK OF LIBERIA 4. Collect and incinerate worn Liberian Dollar banknotes, supply newly printed banknotes to the public and promote good use of Liberian Dollar banknotes; 5. Set up the appropriate institutional framework to facilitate the management of payment systems; and 6. Provide oversight of payment systems.
Finance Department The mission of the Finance Department is to oversee all day-to-day transactional accounting for the CBL and management of any financial reports. It is also responsible for controlling expenditures and obligations, capturing all revenues; accounting for all assets and capital project expenditures, and internal and external reporting. Its functions include: 1. Money out – making payments and keeping the bills paid; 2. Money in – processing incoming payments; 3. Payroll – make sure every staff gets paid (including contractors); 4. Budget – Preparation, monitoring and variance reporting; 5. Reporting – preparing financial reports, e.g. P&L, Balance sheets and budget; 6. Financial Controls – to avoid errors, fraud and theft; 7. Reserve Vault management- Account for deferred costs and vault position; and 8. Net Foreign Reserve Management - Prepare Net Foreign Reserve Position.
Management Information Systems & Technology Department The mission of the Management Information Systems & Technology Department is to serve as an enabler for data management, integrity, and security, infrastructure availability; and guardian of the medium for information dissemination and business continuity, using the most advanced technological tools, platforms, and infrastructure systems affordable for the upkeep of the enterprise. Its functions are to: 1. Maintain the technology setups at the CBL Headquarters and at all payment centers throughout the country, including the data centers at the CBL Head Quarters and the Disaster Recovery (DR) site; 2. Provide technical support to all business units; 3. Provide technical support to all commercial banks on the following platforms and services under the Payment System: ACH/ACP, RTGS, and SSS. Other platform and services include the National Electronic Payment Switch, the Collateral Registry of Liberia, and vRegCoss, a banking Supervision compliance system; 4. Provide strategic guidance and planning in aligning IT policies to the overall corporate strategy of CBL; and 5. Support and guide the automation of business processes, where possible.
STRATEGIC PLAN 2017 - 2 0 1 9 24 General Support Services Department The mission of the General Support Services Department to support the efficient internal operations of the bank, Its functions are to: 1. Manage the CBL buildings and facilities; 2. Ensure transparency and cost-efficiency in the procurement process, with timely and full delivery of goods and services procured; 3. Ensure the efficient management and distribution of supplies and staff benefits; 4. Oversee the smooth holding of events; and 5. Ensure the proper maintenance of vehicles and other assets.
25 CENTRAL BANK OF LIBERIA
SECTION 3: CBL SITUATIONAL ANALYSIS
This section provides an overview of the internal challenges that the CBL’s strategic plan addresses, as well as the contextual considerations that must be addressed, to ensure the plan’s success. It draws on findings from the review of CBL’s human resource management system conducted by consultants; the risk assessment conducted by the Enterprise Risk Management Section (now Department); and the collated results of the PESTLE analyses conducted by each business unit.
INTERNAL GAP ANALYSIS
The CBL’s initiative in 2013 to engage consulting firm KPMG Ghana to assess its risk management status represents an important milestone in the evolution of the enterprise, since it succeeded the erstwhile National Bank of Liberia in 2000. The findings of that assessment revealed the need for further enhancement of the CBL’s risk management practices to ensure greater efficiency, security and consistency in the operations of each business unit. This development led to the establishment of an Enterprise Risk Management Section (ERMS) and the development of a risk management policy to ensure the development and continued maturity of an ERM framework for the CBL. In July 2016, the ERMS conducted a comprehensive risk assessment exercise, and found 67 risks that could hinder the optimal functioning of the CBL’s various business units, including human resources, physical and cyber security, research and supervision and others. These risks – ranging from medium to high – stemmed from the need to strengthen legacy policies and operating procedures, and eliminate discretionary decision making. Presented with this key information, CBL Management and the Board of Directors immediately authorized the ERMS to spearhead the revision of policies and operating procedures to address the risks to enhance the effective operation of each business unit. The first phase of this process is near completion, with many new procedures and policies already drafted for Management and Board approval. The consultant’s review of the CBL’s human resources management system added depth to the ERMS assessment, focusing on the structural needs of the enterprise and recommending a revised organogram, grading structure and performance management mechanism. Their findings provided the empirical information needed to strengthen our policies on promotion and succession, professional development and training, and our benefits structure. The recommendations also served to enhance our performance management, ensuring that assessments are conducted against agreed expectations for work done in support of our strategy.
STRATEGIC PLAN 2017 - 2 0 1 9 26 PESTLE ANALYSIS
As an important measure to begin planning the approach to achieving the CBL’s goals, each business unit was asked to conduct an analysis of the political, economic, socio-cultural, technological, legal and environmental opportunities and threats to the achievement of the CBL vision, mission and goals. This exercise, known as a PESTLE analysis, was chosen instead of SWOT (strengths, weaknesses, opportunities and threats) and GAP analyses because it allowed Management and senior staff to more comprehensively appreciate the full range of factors that could positively or negatively affect the successful implementation of the strategic plan. These factors also allowed for deep and unconventional thinking about key issues often overlooked; and for properly planning and sequencing of interventions, to overcome challenges and seize opportunities where possible. PESTLE ANALYSIS QUESTIONS
The questions below were provided as prompts to assist each business unit in brainstorming the PESTLE factors. Business units were encouraged to use these questions to first consider opportunities associated with each factor, and then brainstorm the associated threats. Political Factors . When is the country's next local, state, or national election? How could this change government or regional policy? . Who are the most likely contenders for power? What are their views on economic, monetary and other policy issues that affect CBL? . How well developed are property rights and the rule of law, and how widespread are corruption and organized crime? How are these situations likely to change, and how is this likely to affect CBL? . What are the prospects for national security in the short to medium term and how is this likely to affect the CBL and the financial sector? . Could any pending legislation changes affect CBL, either positively or negatively? . How do the three branches of government approach the work of CBL? Are they supporters/blockers/neutral? What impact do they have and how is it likely to change in the medium term? . What is the likely timescale of proposed legislative changes, what is holding them up? . Are there any other political factors that are likely to change? Economic Factors . What is the structure of the economy? . How stable is the current economy? Is it growing, stagnating, or declining? . Are key exchange rates stable, or do they tend to vary significantly? . Are customers' levels of disposable income rising or falling? How is this likely to change in the next few years? . What is the unemployment rate? Will it be easy to build a skilled workforce? Or will it be expensive to hire skilled labor? . Do consumers and businesses have easy access to credit? . How easy is it to do business in general? . How is globalization affecting the economic environment?
27 CENTRAL BANK OF LIBERIA . Are there any other economic factors that you should consider? Socio-Cultural Factors . What is the population's growth rate and age profile? How is this likely to change? . Are generational shifts in attitude likely to affect the CBL’s work and the financial sector in general? . What are your society's levels of health, education, and social mobility? How are these changing, and what impact does this have on the economy, the financial sector and the work of the CBL? . What patterns, market trends, and attitudes toward financial and economic activity can you observe? . Are these different for different age groups? . What social attitudes and social taboos could affect the work of the CBL and the financial sector in general? Have there been recent socio-cultural changes that might affect this? . How do religious beliefs and lifestyle choices affect the population, the financial sector and the economy at large? . Are any other socio-cultural factors likely to drive change for the CBL and the financial sector? Technological Factors . Are there any new technologies that CBL could be using? . What technologies is CBL currently adopting, and at what pace? . Are there any new technologies on the horizon that could radically affect the CBL and the financial sector? . Do any of the industries CBL regulates have access to new technologies that could redefine their products? Is CBL equipped to keep up with the sector? . In which areas do governments and educational institutions focus their research? Is there anything CBL can do to take advantage of this? . How have infrastructure changes affected work patterns (for example, levels of remote working) and financial/economic activity? . Are there existing technological hubs that you could work with or learn from? . Are there any other technological factors that you should consider? Legal and Governance Factors . How well developed is the legal framework governing the CBL and the financial sector? . How do governance practices within the CBL and the financial sector match up with international standards? . What are the gaps in the legal and policy framework governing the financial sector and how significantly do they hinder consumer protection, service delivery, access to finance, and protection of domesticated industries? Environmental Factors . What, if any, are the environmental factors that affect the CBL and the financial sector? . What is the common response to those factors, and how are they likely to affect the financial sector and the CBL’s work in the short to medium term?
STRATEGIC PLAN 2017 - 2 0 1 9 28 SUMMARY OF PESTLE FINDINGS
The following are highlights of the PESTLE analysis findings, which are detailed in Table 5. These findings constitute the CBL’s response to the overarching questions: What factors, in each category, are expected to affect the implementation of the three strategic goals? What opportunities and challenges do these factors present for each goal? (See Figure 6) Political Factors The general and presidential elections in late 2017 will usher in new executive and legislative leadership that may significantly change the development policy direction of the country. The incoming government’s fresh energy and high pressure to perform presents an opportunity to garner early support for swift implementation of CBL efforts, where Government intervention is required. However, the unfamiliarity of new Executive and Legislative personalities with the international standards guiding the CBL’s mandate and operation could pose a hindrance to the necessary revision of the CBL Act. High pressure on the national budget during and immediately following the FY2017/2018 budget cycle will likely delay the recapitalization of the CBL. The drawdown of the United Nations Mission in Liberia also poses challenges to national security and the financial sector where armed robberies have already begun to take place. However, this presents an opportunity for strengthening of the insurance industry, and commercial banks and non-bank financial institutions are likely to invest in policies to protect depositors’ money against existing vulnerabilities. Economic Factors The heavy reliance of the Liberian economy on primary commodity exports poses major threats, not only to the stability of prices and the exchange rate, but also to the credibility of the CBL which tends to bear the brunt of public disapproval of the depreciating Liberian Dollar. This situation, however, has increased the appreciation of the public and commercial banks for the CBL’s interventions to reduce volatility in the exchange rate. Banks and customers, therefore, seem to be cooperating with key interventions such as the regulation to pay 25 percent of inbound wire transfers in L$, a measure that was flatly rejected by the public when attempted more than a decade ago. Socio-Cultural Factors The poor savings and credit culture poses a major challenge to the stability of the financial system, although the ‘Naming & Shaming campaign’ appears to be improving loan performance. This culture also affects the success of the financial inclusion agenda, which seeks to attract the unbanked into formal financial institutions and grant them access to affordable financial services, to facilitate their private investment. These outcomes are threatened as the risk aversion of banks increases. This challenge, however, helps to raise urgency around the strengthening of transparency and disclosures policies in banks and non-bank financial institutions (NBFIs). Notwithstanding, more robust measures are needed to change this culture, which could pose a threat to the housing, agriculture and development banks that the CBL hopes to establish through private investment. Technological Factors The constant emergence of new technologies globally leaves Liberia far behind, with inadequate technical knowledge hindering our adaptability to new trends. This means that the CBL and the financial system are unencumbered by legacy infrastructure and systems, and ready to seize new
29 CENTRAL BANK OF LIBERIA opportunities without reinventing the wheel to upgrade and digitize. It also mounts constant pressure to enhance internal control mechanisms to withstand evolving security risks. However, limited resources hinder CBL’s ability to obtain costly technology. The difficulty in building sufficient capacity at the speed of global technological advancement would mean heavy dependency on costly outsourced talent to bridge capacity gaps. Moreover, initial costs to banks and NBFIs of upgrading infrastructure and rollout of new technologies may be shouldered by customers, at least in part. Choosing to stay behind, however, could pose major security risks from a legal and technical standpoint. Legal Factors The Legal and regulatory framework governing the financial sector requires major revisions to meet international standards and increase Liberia’s attractiveness for domestic and foreign investment. General recognition of this fact could result in concrete actions by policy makers to effect real and significant change. Meanwhile, financial institutions can capitalize on the inadequate governance to manipulate the system and facilitate capital flight to secrecy jurisdictions. Weak governance could also cause a confidence crisis in the banking sector, furthering the investment slowdown, and triggering increased hoarding. Environmental Factors Liberia’s tropical climate, with six months rainy and dry seasons provides predictable weather patterns and supports the anticipation of weather related challenges to CBL and Government activities and proactive measures against them. The weather patterns also allow for anticipation of financial needs in various industries, which can be used to design policy interventions and schemes to meet those needs. CBL activity is hindered for half of each year, however, with impassible rural roads and the high cost of building and vehicle maintenance due to torrential rains’ impact on assets.
Figure 6: CBL Strategic Goals
FINANCIAL FINANCIAL CBL REFORM SECTOR REFORM INCLUSION Formulate and Foster a sustainable Promote the ease of implement strong economic and financial access to, and the policies and procedures environment through affordability of, financial that put the bank in an the enhancement of services. appropriate position to regulatory and achieve its vision, supervisory services, and mission and mandate. ensure that monetary growth is consistent with economic growth.
STRATEGIC PLAN 2017 - 2 0 1 9 30 Table 5: PESTLE Analysis FACTOR OPPORTUNITY THREAT POLITICAL Pillar 1: elections pressure on the national budget limits space for recapitalization until FY17/18; new legislatures tend to exert greater authority, especially 2017 elections - New executive and legislative Pillars 2 & 3: New administration, new energy and when the opposition is dominant. Could hinder leadership may change national development policy pressure to meet expectations; great time to push for restoration of autonomy. direction, and be unfamiliar with CBL mandate, int’l strong cooperation on CBL vision, and use it to Pillar 2: Slowdown in Gov’t and Legislative activities standards of operation. influence national agenda. until 2018 may affect CBL activities that require collaboration with GOL and the Legislature; Political interference & politicizing of CBL affairs. Pillar 1: Raises urgency to invest in security Pillar 1: High risk to staff moving currency enhancements to meet int’l standards Pillar 2: High risk of continued bank robbery Pillar 2: Judiciary’s cognizance of shortcomings attempts; Slow justice process and lower likelihood of raises hope for cooperation and concrete change; recovering lost assets; deters foreign investment National security remains fragile, especially after leverage commercial banks’ interest in boosting Pillar 3: Deters domestic investment in new UNMIL Drawdown; weak justice and rule of Law. security to mobilize their support to LNP and agriculture, housing and development banks, and in Commercial Court, credit reference bureau, other sectors; unbanked consumers afraid to use new investment in local deposit insurance scheme. technologies for access to finance, for fear of losing Pillar 3: Microfinance institutions will welcome limited resources without redress. requirement to procure domestic insurance policies. Pillar 1: Improved research can provide a solid basis for legislative and executive action that shows benefit Pillar 1: High cost of legislative engagement. to constituencies. Pillar 2: Ratification processes for new legislation Frictional relationship between executive, CBL & Pillar 2: Compels CBL to think outside the box and likely to be slow and highly politicized; political legislative. promote private investment in key areas, through actions targeted at individuals, not issues; means that do not require direct legislative recapitalization process slow. intervention. Pillar 1: Space to assess program’s impact internally and in the economy, and advise new gov’t on the way forward. Impending expiry of current IMF ECF program; Pillars 1 & 2: Reduced financial and technical Pillar 2: Less pressure to meet ill-suited int’l renewal pending inauguration of new government support. standards; more space to make unorthodox decisions and take calculated risks that promote growth, development & inclusion. Pillar 1: Access to support for key initiatives, as new Pillar 2: CBL could be subject to pressure, along with CBL is a key stakeholder in GOL’s relations with country strategies are developed with new GOL, to meet ill-suited int’l standards and bilateral and multilateral partners. government. development strategies.
31 CENTRAL BANK OF LIBERIA Pillar 2: Opportunity to influence policy decisions on the approach to implement international conventions and frameworks (SDGs). Pillar 1: Grants CBL time to accurately assess capital needs and determine realistic course of action in view Pillar 1: Elections and other competing priorities Recent National budget passed without reference to of limits. limit fiscal space for recapitalization until FY17/18. CBL recapitalization Pillar 2: Limited GOL resources compel CBL to Pillar 2: Limited space to implement strategic plan. devise new revenue generation strategies.
ECONOMIC Pillar 2: Local commercial banks risk losing Pillar 1: Developing a strong AML/CFT regime will correspondent banking relationships thus limiting make banking sector more attractive for investment ability to facilitate trade transactions; Low confidence Liberia is noncompliant or in the early stages of and reduce adverse effects of de-risking of correspondent banks in our banking system; compliance with international standards (AML/CFT) Pillar 2: Tracking the effects of the transition to further reduces the incentive to repatriate currency AML/CFT compliance can aid in future policy into the banking system, especially for exporters making. Pillar 3: May hinder innovative non-traditional initiatives to increase financial inclusion. Pillar 1: Low credibility for the CBL’s core functions; Pillar 2: High potential for widespread acceptance of Pillar 2: Low confidence in the financial system; low Rife corruption in the public and private sectors, with a more robust credit reference system that provides investment attractiveness. conflicts of interest being a key issue. Failed banks background on borrowers and lenders Pillar 3: Weak institutional and legal framework (FIB, housing and agriculture banks); Poor public Pillar 3: Providing clarity on LEAF performance sustains the high cost of access to limited finance, in perception of the CBL & the LEAF program and could generate public acceptance for more sound spite of inclusiveness policy initiatives. public pressure for reform across government lending practices and initiate a paradigm shift in the LEAF set a precedent for CBL lending, setting credit culture. expectations for insecure, free money. Pillar 1: Continued challenges could create a strong Pillar 1: exchange rate and price instability has a case for restoring CBL autonomy. Documentation of psychological effect on the legislature: they perceive CBL research on Liberia’s economic evolution that an increase in their authority over CBL is a through enclave dependency and other crises (such as solution to the challenges. This is mainly a result of Ebola) could generate revenue down the road. disinformation. Heavy reliance on primary commodity exports and Pillar 2: Current economic challenges foster Pillar 2: Large sum of export proceeds are not import of staple and luxury products. Global partnership between regulator and regulated to devise repatriated, which hinders monetary growth, limits commodity price volatility, low economic growth; no solutions to attract and retain currency into the local investment; proceeds from import sales are value addition. Reduction of export earnings has put banking system. May support case for de- largely hoarded outside of banks, driving exchange downward pressure on the exchange rate, inflation Dollarization. rate volatility and price instability, and hindering CBL rate and increased unemployment. Pillar 3: Consequences of the current enclave management of exchange and inflation rates. dependent structure of the economy raises urgency Pillar 3: Heavy consumer dependency on imports for investing in private sector development, especially (and perception of them as status symbols) means agriculture and supports CBL efforts to promote meager demand for cheaper, healthier local products. inclusion. Lack of financial literacy, and the cumbersome
STRATEGIC PLAN 2017 - 2 0 1 9 32 process currently associated with access to finance, deters entrepreneurs from even attempting to access credit for investment beyond a micro/small level. Increases risk aversion among microconsumers, deterring them from banking meager currency supply and using new technologies (e.g. MM). Pillar 1: Opportunity to reassess the dual currency Pillar 1: Potential for staff dissatisfaction with regime and provide advice to GOL on way forward. compensation due to falling value of L$ salaries. Pillar 2: Can lead to full public acceptance of gradual Limited resources may not allow adequate measures transactional de-Dollarization, while Liberia takes to address this. advantage of the dual currency regime, which is Pillar 2: Pressure on limited reserves to intervene in attractive to investors due to stability of asset prices. the market. Limited intervention increases the Constant public mistrust of the dual currency regime Could open doors for more currency inflow. likelihood of price hikes. due to exchange rate depreciation. Exchange rate depreciation would boost exports, if Transactional de-Dollarization could initially lead to Liberia were adding value to raw materials, leading to the hoarding of the US$. job creation and economic growth. Pillar 3: Low political will to create capital markets. Pillar 3: If dual currency is an investment attracter, Could create disincentive for banks to lend in L$. The this could have a positive ripple effect on job creation alternative, lending US$ necessitates a high cost, and domestic private sector growth. which counters our effort to increase affordability. Pillar 1: Pillar 2: Gives CBL time to catch up with the evolving trends of Central Banking without being Pillar 1: overwhelmed with the fast-moving operation of Pillar 2: Hinders CBL control of currency, and private financial institutions; commercial banks are contributes to exchange rate instability. Sustained Traditional approaches to banking are still dominant, especially anxious to leapfrog into modern approach cost of maintaining a cumbersome banking system while the majority of population is under banked will be supportive of CBL. Research on the reasons for CBL and financial institutions. for bank aversion and the dynamics of Liberia’s Pillar 3: Low financial literacy and low perceived financial culture can prove useful to domestic policy financial security and cumbersome nature of banking making and marketable internationally. means population could be content to remain Pillar 3: Creates space for innovative and more unbanked and averse to new technologies efficient approaches to reach unbanked consumers, designed to effectively attract untapped market. Pillar 1: Hinders domestic enterprise, limiting CBL’s opportunities to procure Liberian goods and services. Low disposable income & standard of living, high Limits availability of skilled labor to fill new roles unemployment within largely unskilled/under skilled created within an evolving financial system. population Pillar 3: limited access to financial services and opportunities to benefit from capital markets Pillar 1: CBL can grow with the industry, and lead it Pillar 1: Limited options for quality health coverage Undeveloped insurance industry into the future – not run behind it – and design it to for staff. support growth, development and inclusiveness
33 CENTRAL BANK OF LIBERIA Pillar 2: New financial products in the sector can be Pillar 2: This compounds the lack of security in the introduced using new technologies, essentially entire system (cyber security and credit reference), leapfrogging from the current state rendering it vulnerable to immeasurable and Pillar 3: Potential for microinsurance offering to the irrecoverable loss. underbanked and unbanked. Pillar 3: This insecurity sustains the high cost of credit and general risk aversion of banks. Pillar 1: High running costs for CBL & financial institutions (water and power) Pillar 2: Limited pool of highly skilled labor necessary to drive the development of the financial sector. Pillar 2: Offering digital financial services may Limited infrastructure & basic services (health, Environment remains unattractive to those who are encourage skilled (health and education) workers to education) highly skilled. Basic road, energy networks hinder work in rural areas. technological advancement to increase systemic efficiency. Pillar 3: Limited infrastructure to get money into remote areas.
SOCIO-CULTURAL Pillar 1: Using biometric ID, direct deposit and other DFS by CBL staff may serve as ‘proof of concept’ for Pillar 1: NPLs held by CBL staff at commercial banks wider offering of such services (if any) could dampen CBL credibility Poor savings and credit culture, although ‘Naming & Pillar 3: Encourages strengthening of banks’ Pillar 2: Housing, agriculture and development banks Shaming campaign’ is improving loan performance transparency and disclosures policy, and fosters at risk of failure if this culture does not improve. banks’ cooperation with CBL to develop the financial Pillar 3: Continued risk aversion among commercial system so that it attracts savings and promotes high banks will hinder inclusiveness agenda. loan performance. Pillar 1: Limited access to advanced training locally Pillar 2: Our youthful population has a higher means CBL’s capacity building costs will likely remain likelihood of widespread adaptability to financial high over medium term. system advancement, and more readiness to embrace Pillar 2: Limited pool of highly skilled labor necessary a positive shift in financial culture through formal About 60% of Liberia’s population is under 35 years to drive the development of the financial sector. education, social marketing and other avenues. old with low general and financial literacy rates, and Pillar 3: lack of financial literacy and absorptive Pillar 3: Our situation is common across the is mostly unskilled and unemployed capacity for available finance through marketable developing world; leveraging current technology and skills perpetuates the low demand for formal financial knowledge about design thinking can position Liberia services, low sustainability of loan performance as an innovator in making financial literacy accessible where demand exists, and risk aversion on the part of to all, a model that can be replicated globally. service providers. Gender roles and biases, and masculine cultures Pillar 1: CBL can serve as model for gender Pillar 1: the fewer women at key professional and across the economy and society, lead to gender promotion and equity though a coordinated program decision-making levels, the less gender-balanced (and disparity in access to education, training, employment that promotes gender equality, especially in possibly the less effective) the CBL’s policy and promotion opportunities, and entrepreneurship management positions. perspective and decisions are.
STRATEGIC PLAN 2017 - 2 0 1 9 34 support; and to generally female-unfriendly Pillar 2: More in-depth research into Liberia’s gender Pillar 2: Organizations stand to lose about environments. economics can yield key insights into unlocking our US$22,500 a year for each employee affected by growth potential. sexual harassment or gender bias, with consequences Pillar 3: Women feel and often embrace the social ranging from general job dissatisfaction to post- expectation to shoulder the burdens of their families traumatic stress. (Harvard Business Review) and communities. This staunch adherence to Pillar 3: Women and girls are less likely to be traditional gender roles makes targeting women for educated and financially literate, and therefore more specific inclusiveness schemes a smart choice, as they liable to be excluded or taken advantage of while are more likely than men to invest the resources into seeking financial services. their families, communities and businesses. Pillar 2: Understanding the key differences can Pillar 2: limited infrastructure could increase the cost position CBL to effectively advise GOL on, and Financial and economic behaviors differ based on of appropriate approaches to core functions and to implement, sound policies. geographic location (rural v. urban). financial inclusion agenda Pillar 3: CBL can promote innovation among service
providers to increase ease of access. Pillar 2: While not a significant threat at the national Pillar 1: Opportunity for CBL to serve as role model Tribalism, racism, ethnic friction, classism, ageism level, these social cleavages hinder the efficiency and through its HR practices which will eschew tribalism, and rare but significant inter-religious tension effectiveness of any organization or system through ethnic friction, religious intolerance, etc. broken communication, exclusion and abuse Pillar 1: Susu clubs are prevalent in the CBL, fostering a culture of trust, teamwork and a collective Pillar 1: in the absence of policies governing the pressure toward integrity, transparency and functioning of private clubs on CBL premises, consideration for others. We can build on this to potential tensions arising from them could affect foster a team-spirited environment work processes. Pillar 2: Better understanding the dynamics the wide Pillar 2: keeps a significant amount of currency Susu culture network of RCFIs, VSLAs and other informal outside of banks. Threatens the security of individuals microfinance institutions can help devise policies and responsible for holding cash. systems to promote financial inclusion and Pillar 3: If no interventions, many may get stuck into formalization. believing this is the only source of financial access Pillar 3: Opportunity to build on susu culture to they have, which may hinder acceptance of other design programs that will improve financial inclusion initiatives in the longer term. and access to other financial services Pillar 1: Free rider problem exists with the overtime Pillar 1: Pressure to deliver for beneficiaries can scheme, although new policies have curbed it. The foster high commitment to performance at work. opportunity cost of paying overtime, where Pillar 2: Understanding this culture, what unnecessary, will continue to stretch limited resources Prevalent culture of dependency & the free-rider beneficiaries ask for and why, and why people give thin. problem and how much, can inform effective, culture shifting Communication among staff is hindered when staff policy design and implementation for both inclusion ignore calls from strange numbers because they think and financial sector reform. it’s a beggar calling. Staff suffer pressure to spread
personal resources thin and to maintain a good
35 CENTRAL BANK OF LIBERIA reputation as a giver, and are occasionally distracted by visits from beneficiaries. Pillar 2: Free rider problem contributes to the prevalence of NPLS. Dependency at the individual and household level culminates in national dependency on development assistance, whereby any attempt to wean the system off ODA could meet public resistance. Pillar 3: Households that should have achieved and approached middle class status by now have not, because they allow others to consume their disposable income instead of investing it. This culture fosters complacency among those who have less, and weakens any entrepreneurial spirit they may have. Pillar 1: Persistent culture of fear and silence will lead Pillar 1: Less likelihood of unfounded complaints. with lower staff satisfaction, cohesion and Opportunity to develop an attractive whistle blower performance. Fewer opportunities for corporate Aversion to reporting wrongdoing and seeking campaign with a strong communications plan that improvement. redress for fear of retaliation and of being blamed for addresses these fears. Pillar 2: No motivation for change within financial “taking bread from someone’s mouth.” Pillar 2: Similar whistle blower campaign could be institutions if customers and staff do not feel secure developed for the wider financial services sector. to demand accountability, quality treatment and service.
TECHNOLOGICAL Pillar 1: Not having to reinvent the wheel to upgrade Pillar 1: limited resources to obtain costly technology. and digitize the CBL and the financial system. Pillar 2: poses security risks from, a legal and Pillar 2: The planned Banking Institute of Liberia can technical standpoint, which CBL and GOL cannot Constant emergence of new technologies while focus on addressing this knowledge gap within the yet handle because of limited capacity and weak Liberia lacks adequate technical knowledge financial services sector. controls. Dependency on and high cost of outsourced domestically to absorb the changes. talent Constant pressure to enhance internal control Pillar 3: Initial costs of upgrading infrastructure and mechanisms to withstand evolving security risks. rollout of new technologies could be shouldered by Pillar 3: customers at least in part. LEGAL Pillar 1: Opportunity to promote best practice Pillar 1: Moving too fast in implementing best Legal and regulatory framework (including CBL and initiatives in CBL reform program practice without adequate controls may lead to Financial Intelligence Acts) inadequate, by Pillar 2: general recognition of this inadequacy means additional risks emerging international standards, to govern the financial the government, public and financial sector actors are Pillar 2: Banks capitalizing on inadequate governance system, and makes Liberia unattractive for ready for real and significant change, and are not to profit from new technologies at the expense of investment comfortable with a grandfathered system that is customers; capital flight to secrecy jurisdictions. inefficient and costly. Confidence crisis in the banking sector, bank
STRATEGIC PLAN 2017 - 2 0 1 9 36 Pillar 3: Innovation by Gov, CBL and financial uncertainty and investment slowdown; loss of service providers to enhance the strength and seigniorage; increased hoarding; lawsuits from profitability of the system dissatisfied parties. Pillar 3: ENVIRONMENTAL
Pillar 1: predictable weather patterns support the anticipation of weather related challenges and proactivity in securing the CBL against them. Pillar 2: predictable weather patterns support the Pillar 1: Rural roads blocked half of the year, anticipation of weather related challenges and hindering CBL activity. High cost of building and Tropical climate, six months rainy and dry seasons proactivity in securing the financial services sector vehicle maintenance because of torrential rains’ against them. impact on assets. Pillar 3: predictable weather patterns and heavy rains allow for anticipation of financial needs in various industries, and design of policy interventions and schemes to meet those needs. Pillar 2: diminished credibility of Liberia’s Pillar 2: Industrialized nations could develop without governance, internationally. Public health crises from the added pressure of observing environmental environmental hazards could far outweigh the Low attention to environmental hazards standards, which can be a costly endeavor. benefits of overlooking them. Pillar 3: Pillar 3: Will likely affect vulnerable groups that the CBL’s inclusion agenda targets the most
37 CENTRAL BANK OF LIBERIA
SECTION 4: CBL STRATEGIC OBJECTIVES
The Central Bank of Liberia’s three-year strategy rests on its three goals Financial Sector Reform, Financial Inclusion and CBL Reform. Figure 7 below highlights key interventions that encapsulate the expected outcomes under each goal, while the matrices that follow outline the objectives and corresponding activities that form the detailed plan. The matrices are arranged by administrative division, and each indicates one or more of the three goals that the objective is meant to fulfill.
Figure 7: Key Interventions by Pillar
Financial Sector Reform Financial Inclusion CBL Reform
Sound Law & Policy Expand Microfinance Automation
Strong Institutions Promote Mobile Money Optimized Performance
Effective Policy Coordination Capacity, Literacy & Awareness Risk Efficiency
Efficient Processes Increase Speed & Efficiency Expanded Research Capability
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GOVERNOR’S DIVISION
Executive Governor’s Office Goal(s): CBL Reform; Priority Objective: Facilitate the mutuality of support between the Intended Output 1: The efficient and effective coordination of the Financial Sector Reform; Board of Governors, Executive Management and the CBL’s various day-to-day administrative and operation management of the Office Financial Inclusion business units, the effective oversight of all CBL operations, and the of the Executive Governor in support for actualizing the CBL’s constructive engagement with external stakeholders, to achieve the vision, mission and mandate. CBL’s vision, mission and mandate. Intended Output 2: Project clear and effective messaging to the public on CBL decisions and activities, in support of the goals of the enterprise. Intended Output 3: The strategic effectiveness of the Board of Governors, to ensure the fulfillment of the CBL’s vision, mission and mandate. Intended Output 4: Facilitate the CBL’s constructive engagement with bilateral and multilateral partners toward the achieving of the vision, mission and mandate of the enterprise, in line with international standards. Financial Sector Development Unit Goal(s): CBL Reform; Priority Objective: Conduct media campaigns to raise public Intended Output 1: The public is fully aware of all new Financial Sector Reform; awareness of the opportunities available through the financial developments in the financial sector. Financial Inclusion system; promote financial literacy, and build the capacity of non- Intended Output 2: Majority of the public is financially literate. bank financial institutions to promote financial inclusion; support the implementation of the FSDIP; monitor national development Intended Output 3: All NBFIs fully capacitated to fulfill their strategies, and support their implementation where financial sector mandates, and remain fully compliant and aligned with international is concerned. standards. Intended Output 4: Implementation of the FIRST Program. Intended Output 1: Completion and Implementation of the FSDIP. Intended Output 2: Successive national develop strategies align with existing plans for the financial sector. Enterprise Risk Management Department
39 CENTRAL BANK OF LIBERIA Goal(s): CBL Reform Priority Objective: Collaborate with Management and business Intended Output 1: Identify all risks facing business units across units to identify risk events across the CBL and conduct risk the Bank, arising from current activities. assessments of these events, to determine their likelihood and Intended Output 2: Institutionalize the conduct of risk and control impact; establish, and monitor the implementation of, self-assessments by all business units in between preparation for compensating controls and risk responses to narrow or eliminate intermittent risk assessments for ongoing activities. identified control gaps; develop a platform to consistently communicate identified risk information in a form and timeframe Intended Output 3: Anticipate all possible risks to business units that support the Bank’s risk management philosophy and goals; and across the Bank, arising from new activities. develop measures for monitoring key risks and communicate findings to responsible Management personnel. Intended Output 4: Establish policies and procedures to guide business units’ appropriate risk response and control activities, thereby mitigating identified risks. Intended Output 5: Consistently Monitor adherence to policies and procedures, to ensure the narrowing and elimination of risks and control gaps. Intended Output 6: Conduct regular staff seminars, and occasionally publish content, aimed at continuously building institutional knowledge of enterprise risk management. Intended Output 7: Produce regular reports on the Bank’s risk profile, for Management and Board consumption and decision making. Intended Output 8: Develop key risk indicators and key performance indicators to ensure that controls and risk responses are monitored and modifications made as necessary. Human Resources Management Department Goal(s): CBL Reform Priority Objective: Automate all HR procedures to increase Intended Output 1: All HR records and processes are digitized, efficiency and transparency; methodically promote the continuous automated and web-based. strengthening of CBL capacity to fulfill its mandate; promote Intended Output 2: Implement a robust capacity building strategy transparent, fair and consistent performance management; and that responds to current and emerging organizational needs. implement the revised organogram. Intended Output 3: High return on training investment through performance and knowledge transfer. Intended Output 4: Thorough, transparent, fair and consistent performance evaluations. Internal Audit Department Goal(s): CBL Reform Priority Objective: Review and revise Internal Audit Section’s Intended Output 1: An updated Charter that fully covers all CBL Charter, as necessary, to ensure that it supports the strategic goals activities, from the perspective of the Internal Audit Section.
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of the Bank, in line with best practice; conduct audits and Intended Output 2: Consistent low incidence of risk to CBL goals assessments to promote efficiency and integrity in the management and objectives, and early detection of such risks. of all CBL resources and detect the incidence of risks and gaps in Intended Output 3: Low incidence of fraud and error in CBL control; and promote general adherence to corporate policies and activities, and early detection of such risks. guidelines through compliance audits and corporate governance reviews. Intended Output 4: Audit reports on asset management for submission to the Board Audit Committee. Intended Output 5: Business units’ compliance with all corporate policies and procedures. Intended Output 6: All Management’s strategic decisions are fully supported by documented Board approval. Legal Counsel Goal(s): CBL Reform; Priority Objective: Amend the existing legal and regulatory Intended Output 1: A revised legal and regulatory framework that Financial Sector Reform; framework upholding the CBL and the Financial Sector to align aligns with international standards, and is passed by the National Financial Inclusion with international best practice, and submit for ratification by the Legislature. Legislature. resolve outstanding cases involving the CBL; and Intended Output 2: All outstanding cases involving CBL are complete the liquidation of all failed private and government owned dismissed or otherwise resolved. banks. Intended Output 3: All failed banks liquidated by operation of law. Intended Output 4: All failed Government banks liquidated.
ECONOMIC POLICY DIVISION
Regulation & Supervision Department Goal(s): Financial Sector Priority Objective: Expedite the adoption of new or revised Intended Output 1: A revised legal and regulatory framework that Reform; Financial financial sector legislation including amendments to CBL Act; aligns with international standards. Inclusion continue robust supervision of all financial institutions to promote Intended Output 2: All financial institutions (FIs) are fully full compliance with the legal and regulatory framework; establish compliant with laws and regulations. and fully operationalize the Banking Institute, in collaboration with the Liberia Bankers’ Association; and promote financial inclusion Intended Output 3: Highly efficient banking operations that through enhanced consumer protection and alternative product promote inclusiveness. offerings.
41 CENTRAL BANK OF LIBERIA Intended Output 4: All NBFIs fully capacitated to fulfil their mandates and remain fully compliant and aligned with international standards. Intended Output 5: A robust Banking Institute that serves the current and future needs of the financial sector. Intended Output 6: Expanding access to finance, by consistently improving the regulatory and supervisory framework for Consumer Protection and empowerment due to information asymmetries typical of financial services. Intended Output 7: Support the development and implementation of the Digital Financial Services/Mobile Money Strategy. Intended Output 8: Expanding Mobile Money activities though green finance, women groups and other non-bank institutions and growing agent network. Research, Policy & Planning Department Goal(s): CBL Reform; Priority Objective: Enhance the scale, scope and quality of CBL Intended Output 1: Increased proficiency of staff in the Financial Sector Reform; research; and enhance policy coordination with key stakeholders. application of research software and methodology, and in the Financial Inclusion presentation of data, to adequately inform policy formulation and implementation regarding monetary and financial issues. Intended Output 2: Expanded geographical coverage and scope of data collection for macroeconomic analysis. Intended Output 3: Specialized entities established, within the department, for financial programing, modeling and forecasting, and statistics. Intended Output 4: An economic model built for Liberian policy scenarios. Intended Output 5: Quality policy advice on ECOWAS Macroeconomic Convergence (ECOMAC). Intended Output 6: Improved Liquidity Monitoring Framework. Intended Output 7: Monetary Policy Committee (MPC) established and fully operational. Financial Markets Department
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Goal(s): Financial Sector Priority Objective: Develop an efficient, profitable, well-regulated Intended Output 1: Establish interbank and secondary markets Reform; Financial and inclusive Liberian Capital Market. that will subsequently lead to the establishment of the Liberian Inclusion Stock Exchange, Liberian Securities and Exchange Commission and the Central Securities Depository or bank for securities. Intended Output 2: Robust capital markets that fosters equitable and sustainable economic growth and development, and is effectively operated and regulated, in line with international standards.
OPERATIONS DIVISION
Banking & Payments Systems Goal(s): Financial Sector Priority Objective 1: Enhance the ease and efficiency of banking Intended Output 1: Banking operating procedures updated and Reform; Financial operations; and decentralize banking services for efficiency, implemented, in line with regional & international standards. Inclusion inclusiveness. Intended Output 2: Banking & Currency Management Unit Established. Intended Output 3: Reduced turn-around time for processing of transactions in favor of Commercial Banks. Intended Output 4: Commercial banks fully compliant with SWIFT standards. Intended Output 5: Settle all checks through the automated clearing house. Intended Output 6: Maintain an adequate threshold in cash at all four payment centers. Intended Output 7: Decentralization of Payments to GoL civil servants and commercial banks. Intended Output 8: Establish CBL Regional Cash Hubs An established correspondent mechanism. Intended Output 9: Promote rural use of Mobile Money (MM) through agent banking.
43 CENTRAL BANK OF LIBERIA Intended Output 10: Enhance cash distribution capability Establish Independent Automated Clearing House (ACH). Goal(s): Financial Sector Priority Objective 2: Complete technological upgrades and Intended Output 1: Full RTGS/SSSS, ACP-ACH and Core Reform; Financial automation of processes for ease and efficiency of financial Banking Upgrades and interoperability arrangements for card Inclusion transactions; and align the governance and oversight of payment payments. systems with international standards. Intended Output 2: Automated transactions for Government through electronic funds transfer. Intended Output 3: Simplified tax payment through MFDP and LRA connection with RTGS and ACH payment channels. Intended Output 4: Interoperability between Mobile Money providers and banks. Increased security in the payments system. Intended Output 5: Integrate with the Regional Payments System Infrastructure. Intended Output 6: Dedicated payment oversight functions and policies established within CBL structure. Intended Output 7: National Payments Council established. Intended Output 8: Consolidate all payment data into a single databank. Intended Output 9: Legal & regulatory framework covering payment systems aligned with international standards. Finance Department Goal(s): CBL Reform Priority Objective: Further align financial management with Intended Output 1: Financial management and reporting meets international standards. international standards. Management Information Systems & Technology Goal(s): Financial Sector Priority Objective: promote operational efficiency in information Intended Output 1: Increase UPSes to meet CBL’s current and Reform systems management by: upgrading the CBL’s power capacity; future power capacity needs. consolidating databases onto a single iteration of their Intended Output 2: Establish a Future Development Area within corresponding platforms; advancing infrastructure development the DR Site. and the enforcement of standards to increase interoperability and ease of transactions; and establishing and enforcing security Intended Output 3: All existing Oracle databases consolidated standards within the Bank and the financial system. under a unified Oracle Sun 12c clustered infrastructure. Intended Output 4: All existing SQL databases consolidated under a unified MS SQL 2012 instance.
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Intended Output 5: A fully operational Metropolitan Area Network (MAN) infrastructure. Intended Output 6: Strong cyber security controls enforced within the CBL computer enterprise. Intended Output 7: A fully ISO 27001 compliant financial sector. Intended Output 8: A fully Payment Card Industry Data Security Standard (PCIDSS) compliant financial sector. General Support Services Department Goal(s): CBL Reform Priority Objective: Optimize the functioning of the CBL by: Intended Output 1: Systematic distribution of supplies and maintaining the necessary supply and efficient distribution of services, as needed, to each business unit. appropriate goods and services for the effective operation of the Intended Output 2: Effective management of assets to ensure Bank; maintain an efficient and responsive building management longevity cost-efficiency. system that anticipates and meets all reasonable needs at the highest level of quality; and facilitating the swift and efficient supply of Intended Output 3: A systematic building management operation goods and services to the Bank, with reduced processing time. ensuring quality and accountability. Intended Output 4: Well managed events. Intended Output 4: Revised procurement process to increase efficiency and cost savings.
45 CENTRAL BANK OF LIBERIA
SECTION 5: IMPLEMENTATION OUTLINE
This section outlines the new and existing structures that will drive, monitor and evaluate implementation of the strategic plan and other economic policy initiatives driven or supported by the CBL, as well as the internal policies and procedures that have been adopted to guide CBL operations. In addition to the revised organogram, which clearly shows the lines of reporting within the enterprise, these structures that have been inherited or newly established with an oversight mandate that allows for the full expression of the CBL’s core values and the effective coordination of operations and policy. The mechanisms to ensure strategy implementation will comprise the development and periodic review of cascading annual workplans for divisions, departments, units and individuals. Business units’ plans will be subject to the Board’s quarterly and annual reviews, while individual performance on planned activities will be evaluated semi-annually. The new Performance Management System being implemented will comprise of supervisor-to-staff reviews and self-evaluations, to foster introspection, frank and constructive dialogue, and determine each staff member’s understanding of their personal role, and that of their team, in the fulfillment of the CBL’s mandate, mission and vision. The process also provides the staff with an opportunity to share ideas for the CBL’s advancement and express their needs and career aspirations.
COORDINATION FRAMEWORK
DEVELOPMENT POLICY COORDINATION
The CBL Strategic Plan will be championed and overseen principally by the Board of Governors, whose policy level guidance has shaped it. Executive Management, comprising the Executive Governor and Chair of the Board, the Deputy Governor for Operations and Deputy Governor for Economic Policy will oversee implementation through the development and enforcement of operational procedures. The Corporate Secretariat will support the two most senior decision-making bodies, to monitor fulfillment of all expected outcomes and facilitate periodic reporting on progress. At the policy level, inter-organizational bodies exist to manage liquidity; set and maintain a sound monetary policy; facilitate the coordination of economic policy across government; and steer the nation’s rolling medium term development agendas and their corresponding expenditure frameworks. These include the following: . Liberia Development Alliance (LDA) . Economic Management Team (EMT) . Liquidity Working Group (LWG) . Monetary Policy Committee (MPC) . Debt Management Committee (DMC)
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The CBL’s role in these coordinating bodies is to provide high quality data and analysis, and evidence- based policy advice to support the critical decisions that each body is mandated to make. The Strategic Plan, therefore, fits within the larger framework of the Government of Liberia’s development policy, rooted in the Liberia RISING 2030 National Vision “to become a middle-income country, by 2030, characterized by inclusive growth and development.” As illustrated in Figure 8, the Agenda for Transformation (AfT, 2012-2017), the current medium-term national, and its attendant sector development plans are designed to fulfill the National Vision. The CBL’s interventions in support of Figure 8: Liberia’s Development Strategy Framework for 2012-2030 these cascaded strategies, while indirectly linked to all AfT Pillars illustrated in National Vision (Liberia RISING 2030) Figure 9, directly fulfill the AfT’s Pillar II: “To transform the economy so that it Broad national aspiration to be achieved by 2030 meets the demands of Liberians through development of the domestic private sector—using resources leveraged from FDI in mining and plantations; providing Five Year Development Plan (Agenda for Transformation) employment for a youthful population; Participatory Socio-Political Inclusive Economic Growth investing in infrastructure for economic Development growth; addressing fiscal and monetary issues for macroeconomic stability; and improving agriculture and forestry to expand the economy for rural Sectoral Strategies and Plans participation and food security.” Informed by various studies and Incorporates issues of equality diagnostics and inclusion Liberian Development Alliance Steering implementation of the AfT is the Liberian Development Alliance (LDA), which is chaired by H.E. President Ellen Johnson Sirleaf, and consists of cabinet members, the leadership of the National Legislature and Judiciary, development partners, civil society and the private sector. Economic Management Team Also chaired by the President, the EMT facilitates Cabinet-level coordination to bring swift decision making to bear on immediate and emerging issues affecting the Liberian economy. In addition to the CBL Executive Governor, its membership includes the Ministers of Finance & Development Planning; Commerce & Industry; Agriculture; the Minister of State without Portfolio; and the Chairperson of the National Investment Commission. Liquidity Working Group The Liquidity Working Group is a technical body chaired by the Deputy Governor for Economic Policy, whose core function strikes at the heart of the CBL’s principal mandate. Responsible to facilitate policy coordination among the fiscal and monetary authorities, the LWG Debt Management Committee Debt sustainability is a key factor in efficiently mobilizing and distributing limited resources for development; maintaining Liberia’s access to much needed development assistance; and increasing the strength of Liberia’s economy. The CBL’s role on the DMC, chaired by the Minister of Finance & Development Planning, is to assist in prioritizing target areas for incurrence of domestic and foreign
47 CENTRAL BANK OF LIBERIA debt, to ensure that Liberia’s Figure 9: AfT Pillar Structure planned investments yield a high and lasting return. The Committee also comprises the Minister of Justice and the Minister of State without Transforming Liberia into a Portfolio. middle-income country Monetary Policy Committee
The MPC is the newest
Peace & Security & Peace Rule & of Law Governance & Public Inst. Public & Governance coordinating body that the CBL Transformation Economic will undertake to establish, as Development Human part of this strategy. Comprising a multidisciplinary membership of academics, policy makers, the private sector and civil society, the Committee will provide
Management and the Board of
Governors with a broad based and accurate perspective to support the formulation and Cross-cutting Issues application of sound monetary policy. National Payments Committee The National Payments Committee is charged with the ownership and implementation of the National Payments System (NPS) reform strategy. It operates as a consultative body, providing ongoing support to the CBL to ensure that the payment and securities clearance and settlement systems are safe and efficient; and that a suitable array of modern, affordable payment instruments are available to the public. The Committee also serves as a forum to secure commitment and cooperation from key stakeholders, encourage innovation, promote competition, contribute to the development of the financial markets and ensure that the NPS serves the interests of all stakeholders at all times. Stakeholders are those that have an interest in the NPS. The definition includes those that need to be informed and consulted, providers of payment services, the users of the NPS, and those that own, provide, manage or regulate components of the system or provide support services integral to the operation of the system. The CBL chairs the Committee, which has the current membership: the Liberian Bankers’ Association, telecommunications service providers, the Liberia Telecommunications Authority, MFDP, the Liberia Chamber of Commerce, and the Liberia Business Association. OPERATIONAL COORDINATION
As earlier stated, departmental, unit and individual work plans will guide the implementation of the strategy, with the organogram providing clear reporting lines for oversight and accountability. Recognizing, however, the need for enhanced coordination and communication within the CBL,
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existing operational coordinating structures have been strengthened, and new ones designed, to ensure that all CBL actions align with its core values and support the fulfillment of its mandate. These structures consist of three management committees: The Assets and Liabilities Committee, the Enterprise Risk Management Committee, and the Financial Stability Committee, which are described below. Assets and Liabilities Committee The newly established Assets & Liabilities Committee (ALCO) reports to the Executive Governor, provides oversight of the CBL’s financial assets and liabilities, and ensures that treasury and lending operations comply with CBL’s Risk Management Policy and risk appetite. ALCO also has specific responsibility for managing liquidity risk, interest rate risk, foreign exchange, funding, concentration and counter-party, net interest margin management, financial risk and settlement risks, including maturity mismatch. The Committee’s ultimate objective is to achieve sustainable and appreciable levels of liquidity, increase CBL’s investments and ensure that they match the underlying liabilities. Enterprise Risk Management Committee The Enterprise Risk Management Committee (ERMC) supports Management in maximizing the CBL’s ability to fulfill its mandate by taking a comprehensive approach to anticipate, identify, prioritize, and manage material risks to the Bank’s business objectives. Enterprise risk is defined as any significant event or circumstance that could impact the achievement of the CBL’s business objectives, including strategic, operational, financial, and compliance risks. Financial Stability Committee Chaired by the Deputy Governor for Economic Policy, the Financial Stability Committee (FSC) undertakes economic analysis of the markets, including monitoring and assessing market developments; assessing and measuring systemic risk and other impediments to financial stability; and informing the Executive Governor about relevant micro-prudential trends, potential risks and vulnerabilities. The FSC regularly monitors the functioning of Liberia’s financial system, including the banking, debt, equity, insurance and related markets; deliberates on events, issues and developments with possible cross market and systemic implications; and, where appropriate, formulates and coordinate responses. The FSC reports periodically, and upon request, to the Executive Governor and Members of the Board of Governors.
CRITICAL SUCCESS FACTORS
In strengthening the oversight and coordination framework and structure, the Board and Management have breathed fresh dynamism into the robust and professional culture that already characterizes the CBL. The incorporation of the following critical success factors (CSFs), rooted in our overarching aims to enhance our governance, technology, capacity, adds to that effort and spells success for the strategy: . A sound legal and regulatory framework to optimize the CBL’s oversight role in the financial system; . A strong network of institutions within the financial system that are both profitable and compliant with national and international standards;
49 CENTRAL BANK OF LIBERIA . An enhanced approach to policy coordination for effective development interventions that promote inclusive economic growth; . A modern technological infrastructure that promotes high transactional efficiency; . An effective approach to public communication and sector coordination, to promote financial inclusion, consumer protection and sector reform; . A convenient, speedy and efficient financial services, supported by interoperable, digitized and decentralized systems; . A high performing staff that continues to raise the bar for public service, providing quality leadership and policy guidance for growth and development.
Figure 10: Critical Success Factors
Efficient and effective . Strong governance financial, payment and . Modern technology CSFs mission information systems, for . High capacity prudent monetary policy
3 strategic goals
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SECTION 6: PERFORMANCE MANAGEMENT, MONITORING & EVALUATION
The effectiveness of this strategic plan hinges on its ability to produce outcomes consistent with the CBL goals to foster a sustainable economic and financial environment through enhanced regulation and supervision; to ensure monetary growth is consistent with economic growth; to increase accessibility and affordability of financial services; and to implement the strong internal policies and procedures that enable the CBL to optimally fulfill its mandate and vision. This section outlines the CBL’s approach to realizing these expected outcomes, at corporate and individual levels, highlighting the aspects of plan coordination, monitoring and evaluation, and the management of staff performance. PLAN COORDINATION, MONITORING & EVALUATION
As illustrated in the CBL management structure, the Board of Governors provide the highest level of oversight and policy guidance, with Executive Management guiding corporate operations. The Corporate Secretariat supports the two oversight bodies and senior staff, coordinating and recording the decision-making processes of the Board of Governors, communicating, following up and ensuring the fulfillment of, Board and Management directives. The Secretariat is, therefore, responsible for coordinating with the Financial Sector Development Unit (FSDU) to capture reporting on implementation of the strategic plan for Board review and decision making, in close consultation with the various business units and relevant external stakeholders. The FSDU is directly responsible for monitoring, evaluating and reporting Figure 11: CBL Strategic Plan Management Structure to the Board on the implementation Board of of the CBL Strategic plan, as well as Governors the Financial Sector Development Plan (FSDIP), which was launched in November 2016. It is important to Executive note that the CBL strategic plan Governor prioritizes the implementation of the FSDIP, beginning with the FIRST Deputy Deputy Initiative, which is the portion of the Governor for Governor for FSDIP that focuses on financial Economic Policy Operatons inclusion and capacity building from Financial Sector Corporate RCFIs. While the detailed planning Development and costing for the FSDIP is ongoing, Secretariat Unit
51 CENTRAL BANK OF LIBERIA having been delayed by the Ebola outbreak, the CBL’s strategic plan seizes existing opportunities to take major strides in the development of the financial sector. Coordination between the Corporate Secretariat and the FSDU is crucial, therefore, to support the finalization of the FSDIP; the fulfillment of the CBL’s role in implementing the Agenda for Transformation (AfT) and any successor program introduced by the newly elected administration post-2017; and the mapping and coordination of any other stakeholder interventions that in any way promote financial inclusion. In this direction, a major output of the FSDU is to create and maintain a dashboard to track strategic plan and FSDIP progress, produce periodic reports on implementation progress that highlight any need for Management and Board intervention, and recommend reviews, as may be required, to measure the effectiveness of planned interventions in the achievement of intended outcomes. Reporting from business units as well as coordination committees will feed the FSDU’s reports to the Board on plan implementation. In addition, research and reporting already conducted by the Regulation & Supervision Department and the Research, Policy & Planning Department will be useful in tracking of the impact of CBL interventions on the financial sector. PERFORMANCE MANAGEMENT
Supporting the coordination and implementation of the strategic plan and FSDIP is the CBL’s performance management system, which has undergone critical external review. The newly adopted system builds upon past success in building capacity and emphasizes a focus on strategic plan results. The first step in implementing the new system was the revision of the organization structure to reflect the upgrading of the Human Resources Department to Department status, along with the Enterprise Risk Management and Internal Audit Sections, and their positioning under the Executive Governor’s direct oversight. These structural changes demonstrate the Board and Executive Management’s commitment to transparency and fairness in the management of personnel and operational matters, as well as a keen interest in raising the bar for performance. Establishing, within the enterprise, business units focused on emerging priorities constitutes another important step. In this direction, Management established the Financial Sector Development Unit to drive implementation of the CBL’s financial inclusion policy initiatives and support the coordination of the FSDIP; the Financial Markets Department to develop Liberia’s capital markets; the Anti-Money Laundering/ Combatting the Financing of Terrorism (AML/CFT) Unit; and the Non-Bank Regulation and Supervision Unit to cover the regulatory aspects of the CBL’s financial inclusion drive. To ensure the effectiveness and impact of these and all other business units, the CBL is introducing a new automated and consultative performance evaluation system. The web-based module will link with an equally automated personnel information database and will retain record of agreed outputs for business units and individual personnel and key performance indicators, based on strategic plan targets. This will facilitate transparent and fair evaluations, and increase each staff’s access to their personal records. The system will include a self-evaluation form, to foster constructive dialogue between staff and supervisors about their respective roles and that of the enterprise, individual and team opportunities and challenges, and capacity development needs. The evaluation system will also allow supervisors to factor training provided and competencies gained into their assessments, and assist Management in making merit-based decisions about staff opportunities and advancement in the enterprise. Evaluations will be conducted semi-annually.
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ANNEX: CBL STRATEGIC PLAN IMPLEMENTATION MATRIX (2017-2019)
53 CENTRAL BANK OF LIBERIA GOVERNOR’S DIVISION
Table A1: Executive Governor’s Office OBJECTIVE: Facilitate the mutuality of support between the Board of Governors, Executive Management and the CBL’s various business units, the effective oversight of all CBL operations, and the constructive engagement with external stakeholders, to achieve the CBL’s vision, mission and mandate. PILLAR: CBL Reform; Financial Sector Reform; Financial Inclusion
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Innovative and change management programs that will enhance efficiency and efficacy of CBL administrative and operations performance; Healthy working environment effective and efficient delivery where staff members are of the CBL mandate; provided with clear objectives, Coordinate with Deputy goals, direction, guidance and The efficient and effective Governors, business units and appropriate tools to enable coordination of the day-to- external stakeholders meeting them meet their responsibilities day administrative and briefs and feedback for the effectively and efficiently; operation management of EG. the Office of the Executive Map reporting and The efficient flow of Governor in support for communication processes, in communication and support actualizing the CBL’s vision, consultation with business Ongoing Ongoing Chief of Office Staff between the Executive mission and mandate. units, for Management Governor, Deputy Governors, approval; business units and external Develop reporting templates stakeholders. to set standard for uniform
and quality information Swift and clear lines of delivery; communication between coordinating weekly briefings Management and business from the units and units; high quality and departments reporting directly timeliness of responses; to the Executive Governor. Map time management processes for clarity and to ensure that the Executive Governor’s schedule
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continues to reflect highest priorities. Develop media strategy and budget, in consultation with Constructive relations with the Project clear and effective Management and relevant media; enhanced quality of messaging to the public on business units, to ensure high media coverage of the CBL and Head of Corporate CBL decisions and activities, effectiveness of media Ongoing Ongoing the Liberian economy; Communications in support of the goals of the campaigns; widespread public awareness of enterprise. Develop strategy to promote CBL activities as needed. and track quality of media coverage of the economy. Facilitate the timely distribution of briefs for Board meetings; attend Board meetings and record minutes in a timely fashion; maintain corporate records of Board Adequate frequency of Board minutes, resolutions and other and committee meetings; high documents; work with quality of decision making, The strategic effectiveness of business units to follow up on reflecting adequate oversight of the Board of Governors, to implementation of Board Corporate Policy CBL operations; timely and ensure the fulfillment of the decisions and their impact. Coordinator and effective implementation of Ongoing Ongoing CBL’s vision, mission and Secretary to the Board Board decisions, reflecting the mandate. Support the Board, where of Governors effective flow of needed, in formulating communication among the policies, procedures and Board, Management and the guidelines for the effective business units. operation of the enterprise.
Facilitate the communication of current and proposed policies to the enterprise and to external stakeholders. Liberia remains in good Maintain up-to-date contact standing, and is fully engaged with key multilateral and Facilitate the CBL’s with, key regional and bilateral partners; constructive engagement international multilateral bodies; with bilateral and multilateral increased attractiveness of Continue engagement with partners toward the Advisor on External Liberia’s financial sector to partners to mobilize resources achieving of the vision, Relations foreign investors; for priority initiatives, such as mission and mandate of the correspondent banking the credit reference system; enterprise, in line with relationships restored, due to Support the coordination of international standards. significant and effective risk key multilateral/international mitigation efforts. meetings hosted by CBL;
55 CENTRAL BANK OF LIBERIA Facilitate the CBL’s effective participation in key regional and international conferences, and ensure quality reporting and follow up on outcomes;
Table A2: Financial Sector Development Unit OBJECTIVE: Conduct media campaigns to raise public awareness of the opportunities available through the financial system, promote financial literacy, and build the capacity of non-bank financial institutions to promote financial inclusion. PILLAR: Financial Inclusion; Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Head of FSDU; WB TA to facilitate Develop a robust Director for Increased confidence in the Workshops including The public is fully aware of all communications strategy that Regulation and financial system through needed logistics; new developments in the anticipates CBL’s strategic 1/2/17 Quarterly Supervision; Director effective communication of its Outsourced financial sector. activities and raises awareness for Financial Markets; developments and their impact. communications and nation-wide. Corporate branding services. Communications Facilitate CBL collaboration with LISGIS and other relevant stakeholders to Head of FSDU; The financial literacy rate is WB TA to facilitate conduct baseline study on Director for increased; Workshops including financial literacy. Regulation and Majority of the public is needed logistics; 1/2/17 Ongoing Supervision; financially literate. The level of financial services Outsourced Based on study findings, Director for Financial offered to the public is communications and engage with FSDIP Markets; Corporate increased branding services. stakeholders to strategize and Communications mobilize resources to promote financial literacy. NBFIs are equipped with the technology and skills to provide WB TA to facilitate All NBFIs fully capacitated full services to the public, Implement FSDIP objectives Workshops including Head of FSDU; to fulfill their mandates, and according to their mandate, with to support NBFIs in aligning needed logistics; Director for remain fully compliant and 1/2/17 12/30/18 full customer satisfaction. operations and reporting with Outsourced Regulation and aligned with international international standards. communications and Supervision standards. Increased financial inclusion branding services. due to access to quality financial
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services for vulnerable populations.
OBJECTIVE: Support the implementation of the Financial Sector Development Implementation Plan. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? All FIRST Program deliverables Top management support Implementation of the and outcomes are achieved Maintain a dashboard of and cooperation from 1/2/17 12/30/19 Head of FSDU FIRST Program within the expected timeframe activities and continue follow stakeholders; and budget. up with key stakeholders to Indicative target is ensure that objectives are All objectives planned in detail, Top management support 3 years after achieved. Completion of the FSDIP fully costed and ready for and cooperation from 1/2/17 launch of Head of FSDU
implementation. stakeholders; program; Continuous reporting to 12/30/20 Management and the Board, All FSDIP deliverables and raising foreseen challenges for Top management support Implementation of the outcomes are achieved within swift intervention. and cooperation from TBD TBD Head of FSDU FSDIP the expected timeframe and stakeholders; budget.
OBJECTIVE: Monitor national development strategies, and support implementation where financial sector is concerned. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Work in collaboration with all All FIRST Program deliverables stakeholders to sequence the and outcomes are achieved implementation of the FSDIP within the expected timeframe and the national financial and budget development strategies
TA from development Successive national develop Successive national and sector Maintain contact with external partners to help harmonize strategies align with existing development strategies are well 2/2/18 TBD Head of FSDU key stakeholders, especially the various financial sector plans for the financial sector. coordinated with CBL policy MFDP & MOS, regarding reform programs and plans, and build on CBL national development strategy. data for evidence based policy
interventions that support Maintain a dashboard of financial sector development. CBL/financial sector related
activities within national
57 CENTRAL BANK OF LIBERIA strategy, and continue follow up with key stakeholders to ensure that objectives are achieved.
Attend related meetings and report on key decisions.
Continuous reporting to Management and the Board, raising foreseen challenges for swift intervention.
Table A3: Enterprise Risk Management Department
OBJECTIVE: Identify risk events across the CBL and conduct risk assessments of these events, to determine their likelihood and impact. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? 1. Review incident logs or registers and audit reports; 2. Hold brainstorming sessions with staff of departments; 1. The regularly required 3. Research the economic, office materials. political, legislative and 2. The continued capacity operating environment; strengthening of the Identify all risks facing Compile and regularly update a 4. Conduct interviews with staff of ERMS; business units across the Bank-wide risk register, relevant people; 3. Staff cooperation, and Recurring, on a Ongoing Director, ERMD Bank, arising from current prioritized based on likelihood 5. Undertake surveys of staff Management and semi-annual basis activities. of occurrence and impact. to identify anticipated Board support. issues or problems; 4. The keen participation 6. Flowchart processes; and cooperation of the 7. Hold risk assessment Heads and staff of all meetings with the business units; Department senior management to identify the key risks relative to core activities and
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processes within his/her Department. Same as immediately above The regularly required
office materials; Train business units to use Institutionalize the conduct The continued capacity Strengthened business units’ questionnaires and checklists of risk and control self- strengthening of the staff capacity and consistency in for self-assessment and assessments by all business of ERMS and the conducting self-assessments monitoring of risks and By end-February units in between preparation Functional Risk Officers Ongoing Director, ERMD and monitoring risks and controls. 2017 for intermittent risk of all business Units; controls, and independently and assessments for ongoing The keen participation and quickly identify risks. Monitor business units to activities. cooperation of the Heads promote consistency in self- and staff of all business assessment and self- units. monitoring exercise. Institutionalize the conduct of, and reporting on, risk 1. Regular inquiries about Management and Board assessments for all new new and future activities commitment to strenuously ventures/projects; and the and initiatives during adhere to a process of adoption and implementation regular risk assessment referring new ventures and Anticipate all possible risks of a risk-sensitive strategy for exercises. projects for a complete risk to business units across the Ongoing and as Ongoing and as each new activity. 2. Develop mechanism to analysis before committing Director, ERMD Bank, arising from new necessary necessary When the ERMD has institutionalize the the CBL; and giving due activities. completed as required a Risk inclusion of ERMD in the consideration to the Report on a new planning process for new assessments conducted by venture/project and presented activities, to ensure their ERMD in the decision- to Management a risk-sensitive risk sensitivity. making process. strategy on the way forward. OBJECTIVE: Establish, and monitor the implementation of, compensating controls and risk responses to narrow or eliminate identified control gaps. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? 1. Conclude development of 1. The regularly required policies and procedures, office materials; Establish policies and along with business units; 2. The active procedures to guide business Each business unit has adopted 2. Seek scrupulous review participation of the units’ appropriate risk policies and procedures, with and approval of draft Enterprise Risk Ongoing 03/31/17 Director, ERMD response and control ERMD’s support, Management policies and procedures Management activities, thereby mitigating and Board approval. from the Enterprise Risk Committee (ERMC), identified risks. Management Committee Management, and the (ERMC), Management and Board in the the Board. scrupulous review of
59 CENTRAL BANK OF LIBERIA draft policies and procedures. 1. Conduct Quarterly Risk Business units prioritize Compliance Assessment management of identified risks, Exercises to identify risks in line with policies and and monitor the Consistently Monitor procedures and self-monitor the application and The keen participation and adherence to policies and effectiveness of risk effectiveness of risk cooperation of the Heads 1. 01/31/17 1. Quarterly procedures, to ensure the management processes. Director, ERMD management processes in and staff of all business 2. As required 2. As required narrowing and elimination of business units. units; risks and control gaps. Mutual and proactive 2. Conduct follow-up engagement between ERMD assessments to ensure that and business units for risk identified corrective management. actions are implemented. OBJECTIVE: Develop a platform to consistently communicate identified risk information in a form and timeframe that support the Bank’s risk management philosophy and goals. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? 1. ERMD holds seminars to train Functional Risk Officers (FROs) and other 3. Conduct intermittent relevant personnel from all Conduct regular staff training and refresher business units on applying seminars, and occasionally workshops for FROs and the ERM model to their The regularly required publish content, aimed at other personnel; Ongoing activities; and office materials. 01/02/17 Director, ERMD continuously building 4. Pen risk management- Quarterly institutional knowledge of related articles for 2. ERMD produces articles on enterprise risk management. newsletter and other risk management for internal publications. publication in the CBL newsletter and bulletins.
1. Whenever the ERMD The regularly required makes a quarterly report of office materials. risk management Produce regular reports on information to the Board of the Bank’s risk profile, for 1. Prepare and forward The continued capacity 1. Quarterly Governors; 1. Ongoing Management and Board reports to the Board and strengthening of the staff as required Director, ERMD as required consumption and decision Management; of ERMD; 2. Whenever the ERMD making. provides Management, The keen participation and through the ERMC, cooperation of the Heads information on risk
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management activities, and staff of all business including loss statistics; units;
3. Whenever a risk event crystalizes and the ERMD escalates it to the Board and oversees the resolution of the control deficiency that led to the event; and
4. Whenever the ERMD provides an annual report to the Board on the management of risk and aggregate risk profile.
OBJECTIVE: To develop measures for monitoring key risks and communicate findings to responsible Management personnel. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? The regularly required office materials. Develop key risk indicators and key performance Develop, apply and modify (as The active participation of 1. Ongoing indicators to ensure that When we all business units have necessary), key risk indicators, the Internal Audit Section 1. January 201 controls and risk responses key risk indicators and key key performance indicators; in its capacity as the third 2. Ongoing are monitored and performance indicators monitor controls and risk line of defense in the CBL 2. Quarterly Director, ERMD modifications made as responses. risk management universe; 3. As required necessary 3. As required
The participation and cooperation of the Heads and staff of all business units.
61 CENTRAL BANK OF LIBERIA
Table A4: Human Resources Management Department
OBJECTIVE: Automate all HR procedures to increase efficiency and transparency. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Reduced processing time and discretionary decision making Map current processes and for all HR activities. work with MIS to determine Increased efficiency in HR plan of action for automation. All HR records and processes records management, and Implement plan with Office appliances and are digitized, automated and higher accessibility of staff’s 1/2/17 6/30/17 Director, HRM Management approval, software. web-based. respective records. applying appropriate user Reduced use of paper Bank- interface for ease of access for wide. all staff. User-friendly platform applied, for an easy transition. OBJECTIVE: Methodically promote the continuous strengthening of CBL capacity to fulfill its mandate. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Develop strategy, in consultation with internal and external stakeholders, considering the Bank’s current The strategy promotes the Implement a robust capacity and future activities, as well as efficient use of all available building strategy that regional and international resources, foreign and responds to current and standards. 1/2/17 6/30/17 Director, HRM domestic, to quickly build the emerging organizational skills needed to regulate the needs. Obtain board approval for financial sector. plan and budget.
Implement plan and semi- annually review and adjust.
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Systematically adjust performance evaluation Each training recipient’s targets to reflect training performance clearly reflects received. High return on training acquired knowledge. investment through Establish systematic peer-to- 1/2/17 Ongoing Director, HRM performance and knowledge Each training recipient fulfills peer knowledge sharing transfer. agreed mandate to transfer mechanism for training acquired knowledge to team beneficiaries, to maximize members. capacity building opportunities in view of any budget constraints. OBJECTIVE: Promote transparent, fair and consistent performance management. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Revise and automate the performance evaluation form and process, consistent with HR Review recommendations to reduce discretionary decision making and efficient paper usage.
Each evaluation process Provide web-based resources provides ample opportunity for to demonstrate appropriate deep self-assessment, and professional modes of Thorough, transparent, fair constructive supervisor- conduct for supervisors and 4/30/17 and consistent performance supervisee communication, and 1/2/17 Director, HRM staff, and set clear standards evaluations. clarification of expectations and for evaluation of staff needs, to support the fulfillment comportment. of mandates for each individual
staff and business unit. Maintain records of standardized work plans tied to strategic plan, business unit mandate and staff terms of reference, to allow HR to serve as central repository and to assist in settling HR-related disputes.
63 CENTRAL BANK OF LIBERIA OBJECTIVE: Implement all necessary personnel adjustments in view of the approved grading system and the revised organogram. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Submit to Management a The proper ranking and benefits proposed staff listing with are ascribed to each staff, based justification for their on roles and responsibilities, corresponding grade. tenure, level of experience and New grading system fully Bi-annually education. 1/2/17 Director, HRM implemented. Facilitate the conduct bi- starting 1/30/17
annual reviews, considering Promotions and augmentations past performance evaluations, are effected systematically, with to determine promotion transparency and fairness. opportunities.
Table A5: Internal Audit Department OBJECTIVE: Review and revise, as necessary, Internal Audit Section’s Charter to ensure that it supports to the actual activities of the bank and further supports the strategic goals of the Bank, in line with best practice. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Conduct a full review of new activities, the Risk Register, quarterly audit reports and governance review reports, against the IAD charter, to Internal Audit Charter provides Current operational An updated Charter that fully capture current and new clear mandates and procedures manuals, most recent risk covers all CBL activities, activities for the current and for auditing and review of all register, quarterly audit 1/2/17 3/30/17 Director, IAD from the perspective of the following year. CBL activities, covering all and governance review Internal Audit Section. current and emerging risks. reports. Draft amendments to the charter
Obtain Audit Committee and Board approval.
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OBJECTIVE: Promote efficiency, integrity and compliance with laws, policies and procedures, in the management of all CBL resources, by conducting audits and assessments to detect the incidence of risks and gaps in control, and reporting findings and recommendations to the Board Audit Committee for decision-making. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Conduct consistent and in- depth risk assessments, and provide timely reports that highlight emerging medium to
high risks, in addition to those
already contained in the Risk Consistent low incidence of Register; and make effective risk to CBL goals and Incidence of high and medium recommendations to the BAC 1/2/17 Ongoing Director, IAD objectives, and early risks decreases over time, as for decisions and action, in detection of such risks. adherence to policies, collaboration with ERMD and procedures and controls business units. increases.
Provide continuous feedback to BAC until emerging risks are resolved.
Conduct consistent and in- depth audits, and produce reports that provide thorough, accurate evaluations of internal controls and early indication of fraud or errors that could Low incidence of fraud and Incidence of high and medium prevent the bank from Ongoing error in CBL activities, and risks decreases over time, as achieving its goals; and offer 1/2/17 Director, IAD Quarterly early detection of such risks. adherence to policies, effective recommendations to procedures and controls the BAC for upgrading the increases. control system. Conduct audit exercises.
Provide continuous feedback to BAC until emerging risks are resolved. Conducts consistent and in- Audit reports on asset depth audits of Bank assets, management for submission and provide reports with 1/2/17 Ongoing Director, IAD to the Board Audit Incidence of misuse and abuse thorough evaluations of asset Committee. decreases over time, as management, detailing
65 CENTRAL BANK OF LIBERIA safeguards are increasingly adherence to, or violation of, observed. safeguards against misuse and abuse; and recommends BAC actions to strengthen control.
Submit reports to BAC.
Provide continuous feedback to BAC until emerging risks are resolved. OBJECTIVE: Promote general adherence to corporate policies and guidelines through compliance audits and corporate governance reviews. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Conduct consistent and thorough semi-annual audits of the Bank’s general compliance with Management and Board policies and Business units’ compliance guidelines, and recommend Low incidence of risk, fraud or with all corporate policies improvements to the Board 1/2/17 Ongoing Director, IAD error. and procedures. Audit Committee.
Follow up with ERMD, business units and Management, to ensure corrective actions are taken. Perform consistent and thorough reviews of the CBL’s corporate governance to ensure that Management’s strategic decisions are All Management’s strategic No gaps exist between supported by documented decisions are fully supported Board resolutions, Board documented Board approval Board approval. 1/2/17 Ongoing Director, IAD by documented Board minutes. and key Management decisions. approval. Report findings and recommendations to the BAC, and follow up with Board Secretary and Management to ensure enhanced compliance.
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Table A6: Legal Counsel OBJECTIVE: Amend the existing legal and regulatory framework upholding the CBL and the Financial Sector, in collaboration with relevant departments, consistent with international best practice, for ratification by the Legislature. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Review the current framework, consulting with and seeking validation from, internal and external stakeholders (LRC, NBA, MOS, MOJ, Commercial and other court judges, Supreme Court, IMF, WB).
Submit review findings to the Board with recommendations The Revised CBL Act and the A revised legal and regulatory for revision where current laws Financial Institutions Act and framework that aligns with and policies do not align with relevant regulations fully reflect international standards, and international standards. Technical assistance from international standards. 1/2/17 12/30/17 Head Legal Counsel is passed by the National IFIs All proposed amendments are Legislature. Make revisions, as approved ratified, as submitted, and by the Board. signed into law. Submit draft amended Acts to MOS for onward transmission to the Legislature.
Engage in consistent follow- up with the MOS and lobbying in the Legislature to ensure a swift ratification process.
Publish ratified Acts into handbills. OBJECTIVE: Resolve outstanding cases involving the CBL. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities?
67 CENTRAL BANK OF LIBERIA Prepare a comprehensive report on each case, with recommendations for course of action, in consultation with external lawyers where applicable.
All outstanding cases CBL has no cases to defend. All Obtain Management and the involving CBL are dismissed cases resolved in favor of, and at Board approval of course of 1/2/17 6/30/17 Head Legal Counsel or otherwise resolved. minimal cost to, the CBL. action. Pursue each case as approved by the Board, with the intent of achieve resolution at the earliest possible time.
Appear in court as needed and argue CBL’s case. OBJECTIVE: Complete the liquidation of all failed private banks by operation of law. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Make a submission informing court that failed banks are no longer functional and requesting their dissolution by All failed banks liquidated by Banks liquidated at minimal cost Head Legal Counsel, operation of law. 1/2/17 9/30/17 operation of law. to the CBL. R&S
Pursue case as needed, applying due tenacity to ensure its swift resolution.
OBJECTIVE: Complete the liquidation of failed government owned banks PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? The appropriate liquidation, of Engage the GoL through All failed Government banks Head Legal Counsel, failed public banks and effective MFDP to agree upon course 1/2/17 9/30/17 liquidated. R&S communication to the public of of action.
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CBL & GoL actions in that regard. Obtain Board approval for proposed plan.
Pursue case as needed, applying due tenacity to ensure its swift resolution.
ECONOMIC POLICY DIVISION
Table A7: Regulation & Supervision Department
OBJECTIVE: Expedite adoption of new or revised financial sector legislation including amendments to CBL Act. PILLARS: Financial Sector Reform & CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Review the current framework, consulting with and seeking validation from, internal and external stakeholders (LRC, NBA, MOS, MOJ, Commercial and other court judges, Supreme A revised legal and regulatory The Revised CBL Act and the Court, IMF, WB). framework that aligns with Financial Institutions Act and Technical assistance from R&S, with support 1/2/17 7/31/18 international standards. relevant regulations fully reflect IFIs from Legal Counsel Submit review findings to the international standards. Board with recommendations for revision where current laws and policies do not align with international standards.
Make revisions, as approved by the Board.
69 CENTRAL BANK OF LIBERIA OBJECTIVE: Robust supervision of all financial institutions to promote full compliance of financial institutions with the legal and regulatory framework for transparency, accountability, efficiency and inclusiveness. PILLARS: Financial Sector Reform, Financial Inclusion
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Early documentation of non- Non-compliance decreases over compliance discovery, within All financial institutions (FIs) time, as regulation and Director for one business day; and robust are fully compliant with laws supervision is strengthened 1/2/17 6/30/17 Regulation and enforcement of remediation. and regulations. through a systematic approach Supervision Establish a mechanism to to remediation enforcement. enforce swift remediation.
Set or clarify standards for user-friendly banking operations. Highly efficient banking User-friendly banking processes Director for Periodically review and assess operations that promote improve customer experience 1/2/17 12/30/17 Regulation and banking operations to measure inclusiveness. and attract the unbanked. Supervision efficiency, and recommend to Management adjustments to increase ease of banking for customers.
NBFIs are equipped with the technology and skills to provide All NBFIs fully capacitated full services to the public, Implement FSDIP objectives Workshop logistics; to fulfil their mandates and FSDU; Director for according to their mandate, with to support NBFIs in aligning Outsourced remain fully compliant and 1/2/17 12/30/18 Regulation and full customer satisfaction. operations and reporting with communications and aligned with international Supervision Increased financial inclusion international standards. branding services. standards. due to access to quality financial services for vulnerable populations. OBJECTIVE: Establish and fully operationalize the Banking Institute, in collaboration with the Liberia Bankers’ Association while promoting financial inclusion through enhanced consumer protection and alternative product offerings. PILLARS: Financial Sector Reform and Financial Inclusion
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? The Banking Institute produces Develop roadmap for Director for A robust Banking Institute Approved budget; strong and certifies highly trained operationalizing the Banking 1/2/17 12/30/17 Regulation and that serves the current and cooperation with LBA; banking and finance Institute, for Board approval. Supervision; FSDU;
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future needs of the financial professionals, sets and enforces Liberia Banker’s sector. standards for knowledge, skill, Association ethics and professionalism. Ensure compliance with the rules set forth in the Regulations, especially those related to transparency, disclosure and service quality. This will enhance the knowledge of customers and Setting up of Consumer Help Conduct follow-up minimize the information Desk in all financial exercises and on-site asymmetry between customers institutions, branches and Expanding access to finance, inspection to fifteen and providers and also reduce subsidiaries and developing a by consistently improving the counties to ensure the risks (both moral and template for consumer regulatory and supervisory compliance. financial risks) for the reporting and feedback Director for framework for Consumer consumer. Transparency and mechanism between the CBL 1/3/17 6/30/17 Regulation and Protection and On-going consumer fair treatment are the two pillars and the Financial Institution. Supervision; empowerment due to education and of the regulatory and information asymmetries sensitization programs supervisory approach. Organize consumer typical of financial services. using jingles, radio talk Consumers will begin to accept sensitization and education shows etc. and adapt banking services as program, including
well as e-banking services. information disclosure and the requirements for financial institutions to educate and sensitize their customers on new financial products and services and on their rights and responsibilities. Get stakeholders involved Support the development within the formation of this Coordinate and and implementation of the Less use of cash; greater strategy. Promote the activities Director for collaborate with relevant Digital Financial percentage of adult population of the DFS Working Group. 1/3/17 12/31/17 Regulation and stakeholders and donors Services/Mobile Money with access to financial services Ensure that targets and Supervision; concerned Strategy. timelines for implementation of deliverables are maintained. Expanding Mobile Money Coordinating with the Ministry Hold several consultative Growth or increase in agent activities though green of Agriculture, NGOs and meetings and engage Director for network and subscriber base finance, women groups and Mobile Money Providers to various groups to foster 1/3/17 12/31/17 Regulation and will ensure a successful other non-bank institutions further enhance mobile Money mobile money the Supervision; implementation. and growing agent network. throughout Liberia. counties.
71 CENTRAL BANK OF LIBERIA Table A8: Research, Policy & Planning Department
OBJECTIVE: Enhance the scale, scope and quality of CBL research. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? to produce? succeeded? your success targets? undertake the activities? Introduce training policy requiring participation and Analysts and economists earn certification. certification for statistical and
econometrics software Develop and implement applications, economic training plan for each analyst A computer with stable modeling and forecasting, and Increased proficiency of staff and economist in statistical internet connection for other relevant training. in the application of research and econometrics software each staff, software and methodology, applications, economic Computer access granted Higher quality data reporting and in the presentation of data, modeling and forecasting and to specific team members and evidence-based research. 1/2/17 12/30/19 Director, RPPD to adequately inform policy report writing and on after hours and on formulation and presentation. weekends. Each team member is able to implementation regarding Monitoring and analyze and present data monetary and financial issues. Set and communicate mentorship availability verbally, visually and in writing, standards for quality of from senior staff. for assigned task(s), according reports. to international standards.
Periodically monitor and
evaluate performance, in view of training. Expanded geographical Recruit and deploy additional Data collected from all counties, Transportation and other coverage and scope of data researchers and upgrade CBL including price and BOP research logistics for 1/2/17 12/30/18 Director, RPPD collection for macroeconomic technological networking statistics. remote coverage. analysis. ability to cover each county. Establish financial Clear division of labor between programming unit, modeling units and sections, for quality and forecasting unit, and Technical assistance or assurance in sector-focused statistical section within the Specialized entities attachment to build the research activities with department. established, within the financial programming emphasis on key department, for financial structure and help build 1/2/17 12/30/19 Director, RPPD macroeconomic variables aimed Study other central banks’ programing, modeling and models. at informing the CBL approach to structuring forecasting, and statistics. Qualified personnel Management on price, exchange financial programming, Statistical tools. rate and external sector modeling and forecasting developments. units, and statistics sections.
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Set up attachment arrangements with other central banks. Establish a data warehouse that accounts for quality assurance. Conduct dynamic and static An economic model built for Accurate policy scenarios with Technical assistance; forecasting for policy 1/2/17 12/30/18 Director, RPPD Liberian policy scenarios. limited errors. capacity building. scenarios.
OBJECTIVE: Enhance policy coordination with key stakeholders. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? to produce? succeeded? your success targets? undertake the activities? Liberia’s best interests upheld, through evidence based policy Produce quarterly reports on Quality policy advice on decisions on the ECOMAC Liberia’s progress towards ECOWAS Macroeconomic Ongoing Quarterly Director, RPPD framework in the regional build- meeting the ECOWAS Convergence (ECOMAC). up to a single currency in the convergence criteria. short-to-medium term. Enhance coordination and collaboration with stakeholders, with increased Exchange rate and price emphasis on liquidity Improved Liquidity stability, through effective CBL forecasting in the system as Forecasting software 1/2/17 9/30/17 Director, RPPD Monitoring Framework. interventions that are informed catalyst to effectively inform by accurate forecasts. the CBL’s interventions in the foreign exchange market. Develop a forecasting template for use by the LWG Work with Liquidity Working Group (LWG) member institutions to establish the framework for the MPC to serve as the LWG’s decision Monetary Policy Committee Enhanced effectiveness of making body. Approval of the Board of (MPC) established and fully 1/2/17 3/30/17 Director, RPPD monetary policy. Governors operational. Develop constituting documents and clear terms of reference for adoption by the Committee upon its formation.
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Table A9: Financial Markets Department
OBJECTIVE: Develop an efficient, profitable, well-regulated and inclusive Liberian Capital Market. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? In addition to the T-Bills and CBL Bills guidelines, develop guidelines for other money market instruments such as: Commercial paper, Bankers’ acceptance, certificates of deposits, repurchase agreements and derivatives such as forwards and swaps Technical
for the Liberian market. support/capacity building
Develop a comprehensive in Securities market Establish interbank and market development roadmap operations to include secondary markets that will Retail investors have begun to Strategy: Strategy: that takes into consideration direct training in the areas subsequently lead to the purchase GOL securities in the 1/3/17 8/3/17 the staffing and infrastructure. of stocks trading platform, Director, Financial establishment of the Liberian secondary market and Engage the Government regulation of both the Markets Stock Exchange, Liberian corporations begin to issue Plan Plan through the Ministry of Exchange and the Central Department Securities and Exchange commercial papers in the local implementation: implementation: Finance and Development Securities Depository. Commission and the Central currency. 1/3/17 1/8/18 Planning for budgetary Also, the taking of a study Securities Depository or support in jumpstarting the tour on regional bank for securities. Stock Exchange, the Securities exchanges.
and Exchange Commission and the Central Securities Depository. If necessary, engage other multilateral organizations such as the IFC, First Initiative, the IMF and AFDB for grants to support the starting of these institutions. Capital Markets are dominated Develop, for Board approval, Strategy: Strategy: Robust capital markets that by, and drive, the Liberian a comprehensive strategy for Technical assistance and 1/2/17 8/3/17 fosters equitable and private sector, supporting SME development, operation and human resource Director, Financial sustainable economic growth growth, and expanding the regulation of the capital development for capital Plan Plan Markets Department and development, and is revenue base to support markets, through a highly markets development. implementation: implementation: effectively operated and national development. consultative process. This will 8/4/17 12/30/19
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regulated, in line with include establishment of the international standards. Securities Exchange Commission (SEC) and Central Depository; capacity building for Liberia’s public and private sectors to drive the markets; effective communications; and a robust and effective effort to ensure its inclusiveness. Ensure adequate provision for the SEC and Central Depository Acts in the National Budget. Implement strategy, leveraging existing development coordination mechanisms to steer and periodically review.
OPERATIONS DIVISION
Table A10: Banking & Payment Systems Department
OBJECTIVE: Enhance the ease and efficiency of banking operations. PILLAR: Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Banking & Currency Unit Banking operating New procedures will articulate Department wide process Time, consultancy or procedures updated and processes that are compatible mapping exercises to review regional study tour, 4/15/17; implemented, in line with with the various automated and update current processes. 1/2/17 Director, Banking meeting logistics, Ongoing regional & international systems, and the department’s Build staff capacity, through overtime. standards. expansion; eliminate local and international training
75 CENTRAL BANK OF LIBERIA discretionary decision making; to implement and sustain new Timely provision of and align with regional & procedures. needed logistics for international best practice banking; Close monitoring to ensure Staff recruitment, setting Reduction in turnover time of processes and procedures are standards at various levels processing transactions and followed. in banking other banking processes. Conduct annual reviews of Cooperation from, MIS, Reduction in manual activity procedures to evaluate LRA, GSS, MFDP, through automation. effectiveness. commercial banks, Management and Board Coordination implementation approval with other departments (Payment Systems, MIS, Administration,), as needed.
Budgetary appropriation Capacity building Banking & Currency Increased efficiency and control Collaborate with HR and Study tour to central banks Management Unit in the issuance and destruction Management to set up and in the sub region 1/2/17 6/28/17 Director, Banking Established. of cash. staff the unit. Appropriate vault management software Retooling. Establishment of cash hubs Review and update current Reduced turn-around time Adequate cash-in –transit processes, factoring upgrades for processing of Minimize the impact of liquidity (CIT) logistics in technology and other newly 1/2/17 12/31/17 Director, Banking transactions in favor of shortage on the financial sector. Budgetary allotment for adopted operating procedures Commercial Banks. printing banknotes adopted. Networking with security apparatus Review and upgrade Conduct reviews of current current procedures to handling of international Commercial banks fully reflect international Efficient handling of transactions. Semi-annual compliant with SWIFT standards 1/2/17 Director, Banking international transactions. reviews. standards. Staff competency to Build staff capacity, as needed, changing SWIFT upgrades to meet SWIFT standards. Staffing needs Continuous follow-up Engage MFDP to ensure with MFDP on checks Settle all checks through the Speedy handling of all checks. transition to automated standardization 1/2/17 6/31/17 Director, Banking automated clearing house. clearing of GOL checks. Integration with LRA revenue collection points.
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OBJECTIVE: Decentralize banking services for efficiency, inclusiveness. PILLAR: Financial Sector Reform; Financial Inclusion
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Conduct a capacity assessment of payment centers, and report findings to Management with recommendations for CIT logistics maintaining a threshold in Networking with MFDP cash at those centers, taking and Judiciary stand alone Maintain an adequate Consistent supply of cash at into consideration the current Ensure insurance coverage threshold in cash at all four payment centers to meet insurance and security of each center 1/2/17 6/30/17 Director, Banking payment centers. demand. coverage and our road (consultation with Legal condition during rainy season. and GSS) Transportation, adequate Provide approved supply of cash supply. cash to payment centers, in line with adopted operating procedures. Ensure efficiency of cash Decentralization of operations to smoothen Interface with MFDP to Ease and efficiency of check Payments to GoL civil liquidity to commercial banks use Direct Credit through encashment; customer 1/2/17 12/30/17 Director, Banking servants and commercial for efficient payment of salary RTGS, ACH/ACP, or the satisfaction. banks arrears (i.e. use of quality and National SWIFT fit notes) Identify strategic locations for Easy access for commercial Budgetary allocations regional hubs. Establish CBL Regional Cash banks to liquidity from their Meet with Local Govt 1/2/17 12/30/17 Director, Banking Hubs current accounts to the rural authorities Construct and operationalize parts of the country. Staffing hubs. Increased construction of Accessible banking services in Develop and implement MC2 bricks and mortars RCFIs An established rural areas without commercial model or RCFIs where there Encourage Mobile Money, 1/2/17 12/30/17 Director, Banking correspondent mechanism. bank branches. are no bank or bank branches POS, and other digital payments modules. Establish agent banking policy Cooperation from MM Promote rural use of Mobile Increased use of Mobile Money to guide recruitment of agents. service providers, MIA, Money (MM) through agent in each county’s rural and urban MoCI, county officials and 1/2/17 3/31/18 Director, Banking banking. areas. Support training of agents to other relevant utilize the mobile money stakeholders.
77 CENTRAL BANK OF LIBERIA platform, and agent deployment. Smooth lifting of cash to CBL Increase CBL vehicle fleet, and Enhance cash distribution CIT logistics branches and Commercial Bank strengthen security to facilitate 1/2/17 Ongoing Director, Banking capability Cash hubs establishment branches upon request. transport of cash. Revise legal and regulatory framework to accommodate Establish Independent ACH independence. ACH fully independent, with Automated Clearing House 1/2/17 6/30/18 Director, Banking effective CBL oversight. (ACH) Fully support ACH administrative and physical transition. OBJECTIVE: Complete technological upgrades and automation of processes to increase the ease and efficiency of financial transactions. PILLAR: Financial Sector Reform and Financial Inclusions
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? want to produce? succeeded? your success targets? undertake the activities? Payment Systems Unit Optimal interoperability between CBL, GOL and financial institutions to process instant payments from one institution to another. Reduce check clearing time from 3 days to 1 day. Board approval of All financial transactions systems rules. Full RTGS/SSSS, ACP- automated and affordable, Have meetings and workshops Capacity Building ACH and Core Banking including check clearing and with banks Stable electricity and Dep. Dir, Banking, Upgrades and reasonably-priced cash internet connectivity. 07/28/14 6/30/17 MIST interoperability arrangements withdrawal from any ATM. Raise public awareness of new Massive Public Relations for card payments. facilities campaign to inform CBL fully capable of public of the benefits and monitoring transactions in real- Construct better network scalability of the system. time. infrastructure nationwide.
Reduced cost of, and increased use of ATMs. Customer satisfaction Extend payments system Budgetary appropriation Automated transactions for Reduced time, cost and errors in infrastructure to MFDP, for for the extension of the Dep Dir Banking and Government through processing GOL payments to connection to process all 01\15\17 12\31\17 infrastructure. MIST electronic funds transfer. vendors and civil servant. payments through direct Cooperation from MFDP. credit.
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Sign Memorandum of Understanding between CBL and MFDP and between CBL and LRA on terms and conditions of the arrangement. CBL budgetary Create access point for MFDP appropriation and LRA for revenue consideration collection and disbursement of GOL Budgetary Taxes paid instantly. Simplified tax payment funds respectively, through appropriation to support Dep Dir Banking, through MFDP and LRA RTGS and ACH as payment the arrangement. Taxpayer satisfaction with 01/2/17 12/31/17 FSDU, MIST, and connection with RTGS and channels. Seek possible counterpart simpler, faster, more Finance ACH payment channels. financing/Technical transparent process. Develop procedures, Assistance guidelines and regulations for the processes to be followed by the public and system users. Strong cooperation from MFDP and LRA. Establish an arrangement to jointly monitor the central system for transaction from payments of taxes
Establish clear framework. Interoperability between Customer satisfaction and Integrate Mobile money with Technical Consultant Dep. Dir Banking, Mobile Money providers and increased use of easier, more 1/2/17 12/31/17 the national switch. Build capacity FSDU, MIS and RSD banks. seamless, mobile transactions. Engagement with Telcos providers Low risk and incidence of security breaches and physical and cyber-attacks on electronic payments. Strengthen security network on the payments system. Reduction of payments fraud Dep. Dir Banking and Increased security in the Appropriate network Train staff in network security. 01/2/17 Ongoing MIST payments system. security devices. Significant reduction of cash transactions in the economy; Enforce regular monitoring of and increased engagement of the system. the un-banked with financial service providers, due to increased confidence.
79 CENTRAL BANK OF LIBERIA National Stakeholder’s Improved cross border trade buy-in (i.e. National Integrate with the Regional Establish viable payments and currency appreciation Legislature, others) Dep Dir Banking, Payments System system infrastructure in 01/02/17 12/31/19 against trade member countries’ Engage Technical FSDU. MIST Infrastructure. Liberia. currencies. Consultants Budgetary allotment.
OBJECTIVE: Align the governance and oversight of payment systems with international standards. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? want to produce? succeeded? your success targets? undertake the activities? Establish oversight unit.
Develop policy framework and oversight guidelines.
Hiring qualified staff for the Dept., and build capacity for oversight functions, as necessary. Strong CBL oversight of all
Dedicated payment oversight electronic payments. Budgetary appropriation Raise awareness of payments functions and policies and approval for more and Dep Dir Banking; policies, guidelines and 01/2/17 12/31/17 established within CBL Full adherence to payments needed trainings and FSDU, ERMD, procedures within financial structure. system policies, guidelines and workshops sector. procedures by all participants.
Adopt strong mechanism to monitor payments service delivery, and conduct regular appraisal of service providers’ performance.
Coordinate activities with banks. Identify and facilitate Regular, well attended council appointment of candidates for Support from CBL meetings; regular publication of DG Operations; the Council. Management National Payments Council national payments policy Director, Banking & Willingness and 1/2/17 12/31/17 established. decisions from the council; Payments Systems; Develop plan of formation, cooperation from the Formulation and annual review FSDU; Legal. By-laws and Constitution. stakeholders of national payments policies.
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Elect Council officers. Increased accessibility of Designate responsible staff for Capacity building Consolidate all payment data reliable information on the task, and identify relevant Equipment (computer) 1/2/17 12/31/17 DD Banking & MIST into a single databank. payment. data to be consolidated. Staffing Review legal & regulatory framework in collaboration Study tour for Legal and Regulation & Supervision Banking & Payment Department and Legal Systems Dept. staff to Legal & regulatory Stronger regulations compatible Section. countries with advanced framework covering payment with modernized payments DD Banking, ERMD payments systems. 1/2/17 12/31/17 systems aligned with systems and international & Legal Counsel Build capacity of the Legal international standards. standards of governance. Section to promote and Advanced law program in maintain the relevance and electronic payments, for efficacy of modern electronic Legal staff. transactions’ laws.
Table A11: Finance Department
OBJECTIVE: Further align financial management with international standards. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want to How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? produce? succeeded? your success targets? undertake the activities? 3/30/ 2017 Implement board-approved
operating procedures Copies of financial developed in collaboration instruments and bank Effective operating procedures with ERMS. statements for CBL result in increased efficiency and placements. effectiveness of financial Review current reporting 1/2/17 management. format and processes, and Daily statements of all revise to comply with IFRS, Financial management and transactions that affect Full disclosure of CBL’s including maturity dates and Director, Finance reporting meets international CBL reserves. 6/30/17 financial assets in accordance interest rates for loans Department standards. with IFRS. disbursed, placements and Develop reports for Assets deposits by the CBL. and Liabilities Committee Disaggregated CBL reserves, (ALCO). showing realized and unrealized Critically analyze the
gains. composition of CBL reserves, Prepare budget on cash in collaboration with external basis and accrual basis. auditors. 1/2/17
81 CENTRAL BANK OF LIBERIA In the equity section of the statement of financial position, 3/31/17 clearly distinguished the realized reserve portion from 1/2/17 the portion that is unrealized. 6/30/17 Procure financial reporting software that will be compatible with T24 core 3/31/17 banking application.
Establish an Internal Control Section within Finance Department to enhance the Bank’s internal control framework and ensure the implementation of internal and external audit recommendations and also IMF safeguards assessment recommendations.
To develop an accrual based budgeting system alongside the current cash based budget.
Coordinate the establishment of an Asset Liability Committee to safeguard the Bank’s assets.
Enhanced coordination with Treasury Operations.
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Table A12: Management Information Systems & Technology OBJECTIVE: Upgrade power capacity for the Uninterrupted Power Supplies (UPSes) and the Main site and Disaster Recovery site (DR), and prepare the Future Development Area at the DR site for occupancy to accommodate the DR site needs of other financial institutions. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? to produce? succeeded? your success targets? undertake the activities? Conduct assessment of Power capacity UPSes are fully capacity needs Increase UPSes to meet CBL’s operational, and able to support Identify specifications and current and future power 1/2/17 5/31/17 Director, MIST the equipment connected to maintenance services, as capacity needs. them. needed. Internet connectivity to Procure and install UPSes. identify the appropriate Procure and install necessary specs, transportation to equipment and technology. scope out available UPSes FD Area fully prepared for Establish a Future on the local market. occupancy by Government and Development Area within the Develop policy on hosting to 1/2/17 5/31/17 Director, MIST other institutions in the DR Site. guide CBL arrangement with financial sector. FD Area occupants.
OBJECTIVE: Consolidate databases onto a single iteration of their corresponding platform, to increase cost and operational efficiency. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? to produce? succeeded? your success targets? undertake the activities? All existing Oracle databases Reduced database management Determine appropriate consolidated under a unified costs and complexity. approach to consolidation to 1/2/17 4/17 Director, MIST Oracle Sun 12c clustered Appropriate redundancy and ensure cost-efficiency, server infrastructure. high availability capacity, maintenance and management of any Appropriate redundancy, high technological risks involved. All existing SQL databases availability of the production consolidated under a unified 1/2/17 2/17 Director, MIST environment, and reduced costs Implement consolidation and MS SQL 2012 instance. of database management. periodically review database performance. OBJECTIVE: Support the increased interoperability within the financial system to increase ease of transactions, through infrastructure development and the enforcement of standards. PILLAR: Financial Sector Reform; Financial Inclusion
83 CENTRAL BANK OF LIBERIA Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? to produce? succeeded? your success targets? undertake the activities? Real-time activity between the Outsourced solution CBL and all existing and Procure, install and test providers and capacity A fully operational proposed LRA hubs/tax appropriate technology to building for use of the IT Metropolitan Area Network 1/2/17 12/30/18 Director, MIST payments/collection centers in connect CBL with LRA & management and (MAN) infrastructure. and around Monrovia and MFDP. operation of the MFDP. infrastructure.
OBJECTIVE: Establish and enforce security standards within the Bank and the financial system. PILLAR: CBL Reform; Financial Sector Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? to produce? succeeded? your success targets? undertake the activities? Set and enforce controls;
CBL optimally protected from Continually strengthen Strong cyber security controls unlawful and unauthorized controls against emergent Continuous training to enforced within the CBL 1/2/17 Ongoing Director, MIST access by individuals, threats; meet emergent threats. computer enterprise. applications or processes. Continue user education to prevent future attacks. Communicate technical and operational standards. Information security
management systems (ISMS) Oversee necessary A fully ISO 27001 compliant for all financial institutions and Payment Systems, technological upgrades to 1/2/17 12/31/17 financial sector GOL spending entities are FSDU & MIST meet standards. compliant with international
standards. Provide real-time guidance for implementation. All financial institutions and Set the technical and GOL spending entities, makers operational requirements for and users of payments software Outsourced solution A fully Payment Card Industry organizations accepting or and devices meet PCIDSS providers, including: to Data Security Standard processing payment Payment Systems, technical and operation connect banks without 1/2/17 12/31/17 (PCIDSS) compliant financial transactions, and for software FSDU & MIST requirements. ATMs to the national sector. developers and manufacturers switch. of applications and devices Easy payment of bills and other used in those transactions. transactions.
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Determine approach to include banks without ATM machines.
Provide real-time guidance for implementation.
Coordinate arrangements between card companies and banks.
Table A13: General Support Services Department
OBJECTIVE: Maintain the necessary supply and efficient distribution of appropriate goods and services for the effective operation of the Bank. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want to How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? produce? succeeded? your success targets? undertake the activities? General Services Unit Periodically review inventory and record of supplies distribution, to assess each business unit’s needs. Business units consistently have Systematic distribution of Use needs assessment to Director, all needed resources to fulfill Inventory management supplies and services, as needed, support Procurement Unit’s 1/2/17 6/30/17 General Support their mandates with sufficient software to each business unit. bulk purchasing efforts. Services/DD GS ease and comfort. Anticipate and communicate shortages; and institute measures, with Management approval, to prevent wastage. Establish and implement a maintenance schedule to Effective management of assets provide timely servicing for Director, High quality management of to ensure longevity cost- equipment. 1/2/17 6/30/17 General Support vehicle fleet and other assets. efficiency. Conduct monthly inspections, Services/DD GS to anticipate and address any issues arising;
85 CENTRAL BANK OF LIBERIA OBJECTIVE: Maintain an efficient and responsive building management system that anticipates and meets all reasonable needs at the highest level of quality. PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want to How will you know that you have What do you need to do to achieve What will you need, to MM/DD/YY MM/DD/YY Who leads on this? produce? succeeded? your success targets? undertake the activities? Maintenance Unit Set clear schedules for daily, weekly and seasonal tasks, with clear lines of individual responsibility. Thorough cleaning and Schedule inspections A systematic building maintenance apparatus with Training of CBL staff to commensurate with tasks, for management operation daily, weekly and seasonal tasks take over the currently Dir, GSS/AD, quality assurance and 1/2/17 12/31/17 ensuring quality and fulfilled on time, within budget, outsourced maintenance Maintenance performance management. accountability. and with the highest level of functions
quality. Develop and implement plan to address structural issues and increase resilience against the elements. High quality conduct of CBL Provide or coordinate Assistant Director, Well managed events. events, facilitating preparations provision of all event logistics, 1/2/17 Ongoing Maintenance on time and within budget. in a timely manner. OBJECTIVE: Facilitate the swift and efficient supply of goods and services to the Bank, with reduced processing time PILLAR: CBL Reform
Intended Outputs Output Targets Indicative Activities Inputs Start Finish Responsible
What tangible results do you want to How will you know that you have What do you need to do to achieve What will you need to MM/DD/YY MM/DD/YY Who gets this done? produce? succeeded? your success targets? undertake the activities? Procurement Unit A swift procurement process Review and revise that promotes compliance and procurement process, cost efficiency. including entries into the GP
Revised procurement process software, the requirements Individual requests processed Cooperation from Dir GSS and AD, to increase efficiency and cost that need to be met for an 1/2/17 6/30/17 within three days. Finance, MIST. Procurement savings. individual request to move to
the next step and obtain End user and vendors satisfied approval. with products, services and
transactions.
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Involve all teams relevant to the procurement process, and MIST to develop a plan for automation of processes, clarify requirements to prevent discretionary decision making, improve coordination between Procurement Unit, General Services Unit and Finance Department, and reduce approval time.
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