Monrovia, Liberia – The Ministry of Finance and Development Planning (MFDP) has issued a directive to government spending entities, urging them to “prioritize their priorities” in light of persistent fiscal constraints.
In a recent memo signed by Finance Minister Augustine Kpehe Ngafuan and addressed to ministries, agencies, and commissions, the ministry stressed the importance of prudent financial management given the limited availability of resources.
“Scarcity of resources is a reality, and all heads or senior management of spending entities must not lose sight of this reality. You are advised to prioritize the priorities,” the memo stated.
The MFDP has instructed all government spending entities to strictly adhere to their approved budgets for Fiscal Year 2025 and exercise fiscal prudence in what it describes as a “challenging fiscal environment.”
Additionally, the ministry reminded government institutions of the need for effective budget management.
“Please manage your budget well. Your budget is for the entire 12 months of 2025. You are strongly advised NOT to execute it as if it were a six-month or one-quarter budget. You are unlikely to receive any supplemental resources from the government if you exhaust your budget lines early,” the ministry warned.
The memo further emphasized that the budget is merely a projection until revenue is actually raised through the collective efforts of the Liberia Revenue Authority, the MFDP, and other stakeholders involved in revenue generation.
“This year’s budget stands at US$880.7 million, reflecting a 19.2% increase over last year’s recast budget of US$738.9 million. While this US$141.8 million increase is significant, it remains far below the more than US$2 billion in funding requests received from spending entities during the formulation of the 2025 budget,” the ministry explained.
The memo, dated February 18, 2025, and signed by Minister Ngafuan, noted that despite being in just the second month of the fiscal year, the ministry has already received numerous requests from spending entities seeking additional funds for new priorities and unforeseen expenses not included in their initial budgets.
The ministry clarified that the “first source” of funding for such unforeseen expenditures should come from within the spending entity’s own budget.
It also highlighted that only US$3.26 million was approved as a contingency reserve fund in the 2025 budget, serving as the only unallocated pool of funds from which the ministry can address unexpected financial demands.
“This amount is obviously minuscule compared to the sheer number of legitimate unforeseen spending pressures that arise during the year. Consequently, the MFDP, operating within the frameworks of the Public Financial Management and Budget Transfer laws, must make difficult decisions regarding reallocations to fund pressing, unforeseen expenditures,” the ministry stated.
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