Liberia: Bokai Suspends Central Bank Governor For Exceeding Approved Expenditure Limits By $19.31m, Other Audit Findings

President Joseph Boakai has suspended Aloysius Tarlue, the Central Bank of Liberia (CBL) governor, following an audit by the General Auditing Commission (GAC), as stated by Information Minister Jerolinmek Piah.

The decision was made after a GAC compliance audit report revealed significant financial irregularities at the CBL from January 1, 2018, to December 31, 2023. The report outlined several compliance issues affecting the bank’s operations.

The GAC found that CBL management exceeded approved expenditure limits by about $19.31 million from 2018 to 2022. The audit also showed that the bank’s budgeted expenditures consistently exceeded revenue projections, indicating a pattern of deficit financing.

FrontPageAfrica reported that Liberia risks losing further assistance from the International Monetary Fund due to a recent controversial decision by the CBL to guarantee loans to two struggling banks under the pretext of stabilising the financial sector. The IMF and other international stakeholders are concerned that the decision was made without proper procedures.

According to its reports, the situation began in August 2020 when Sapelle International Bank Liberia Limited (SIBLL) took over GN Bank Liberia Limited. This purchase was approved by the CBL, allowing SIBLL to operate under GN’s licence. In January 2024, Bloom Bank Africa (Liberia) Limited (BBALL) took over Global Bank Liberia Ltd, another struggling bank.

During the acquisition of Global Bank, Bloom discovered a pending lawsuit between Global Bank and George Kailondo Oil and Gas Company. Bloom hesitated to proceed with the purchase due to the lawsuit, leading the CBL to sign a memorandum of understanding to compensate Bloom if Global lost the legal case. The Supreme Court eventually ruled in favour of Kailondo, awarding him US$2.3 million in damages.

Both acquisitions were initially seen as efforts to revitalise poorly managed banks with many bad loans.

To reduce the losses, the CBL promised to cover some of these loans and gave millions to cover the losses from the FIB-GN Bank—SBLL loans. However, these promises are considered unreliable, and SIBLL had already used up its reserves with the CBL. Global Bank also had problems with bad management, bad loans, and legal issues.

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