High Exchange Rate Skyrocketing Prices of Basic Commodities

The Government of Liberia (GOL), through the Ministry of Commerce and Industry, has admitted that the hike in the exchange rate between the United States and Liberian dollars is affecting the prices of basic commodities on the local market, but cautioned against the increment of the cost of rice by importers and business owners.

Rice is the country’s staple food.

For nearly a month now, consumers of the commodity have been complaining of increment in the price of rice due to the high exchange rate between the US and LD. Currently, the exchange rate stands at US$1 to L$180 in Monrovia and its environs.

A bag of 25kg rice, which was sold for US$13 to US$13.50, is now being sold for between US$18 to US$19 in Monrovia. In the leeward areas, the price has increased from US$20 to US$23.

But speaking in an exclusive interview with FrontPageAfrica in Congo Town recently, Deputy Commerce Minister for Administration Wilfred Bangura admitted that though the exchange rate is high, government has not adjusted the price of rice on the local market.

He said the Ministry of Commerce and Industry cannot be held liable for the depreciation of the local currency.

“There is inflation in the exchange rate which is affecting the Liberian dollar side of our dual currency regime. If the currency performs better which I know the Central Bank folks are working very hard to stabilize, the cost of rice in Liberia dollars would drop once the exchange rate is stabilized. But it does not mean that there has been an adjustment in the price of rice.”

“The exchange rate situation we are facing right now is not the Ministry of Commerce’s area or control. But we wish to state that the exchange rate is affecting commodities because, the LD goes up against the US dollars.”

Minister Bangura expressed the hope that when the exchange rate is stabilized by the CBL, “everything is going to return to normal.”

No more subsidies

Following his inauguration, President George Manneh Weah negotiated with rice importers to ensure that the commodity was cheap and affordable for Liberians.

The negotiation led to the government providing subsidies to rice importers to stabilize the price. It reduced the price of rice from US$14.50 to US$13.50.

But the deal between the government and the importers lasted for a little over two years, following the failure of the government to ensure the timely payment of subsidies to the importers. The situation led to the shortage of rice on the local market and the hike in the price of the commodity. Citizens, including suppliers and consumers took to the streets to protest the situation.

But Minister Bangura blamed the collapse of the deal between the government and importers and the hike in the price of rice at the time to the outbreak of the Coronavirus in the country and the Ukraine and Russia war.

“During these periods, the importers of rice started to cry on the government that they needed to make adjustment in the price of rice so that the commodity can be available and affordable for the Liberian people.”

He recalled that President Weah later constituted a taskforce that consulted stakeholders and a recommendation was made for the price of a 25kg bag of rice to be increased to US$17.50.

He claimed that since the adjustment was made, there has been no increment in the price of the commodity by the government.

“The price of rice stands at US$17.50 and one of our importers called K and K I even selling today at US$17. That is the cheapest and lowest price you can find in the sub-region.”

Minister Bangura pointed out that as a result of the increment in the price of rice from US$14 to US$17.50; government is no longer providing subsidies to importers.

He said the rice market has “adjusted considerably,” and the commodity is sufficient to serve the country up to March next year.

Citizens’ complain

Liberians continue to complain that the US$17.50 announced by the government as the price for a 25kg bag of rice, is only for owners of various businesses that are supplying and buying wholesale from rice importers.

The rice is being sold by suppliers for between US$18 to US$18.50.

But Minister Bangura claimed that an individual can also go to any of the rice importers to purchase a bag of rice at the cost of US$17.50 or US$17.

According to him, the government does not intend to increase the price of rice anytime soon.

No profiteering

Speaking further, Minister Bangura pointed out that the ministry has observed that some business owners are maximizing profits on rice due to the hike in the exchange rate.

He said the ministry has mandated every business to publically display their respective exchange rates to ensure that consumers make “wise purchasing decisions.”

“Businesses are trying to profiteer from the exchange rate situation in the country. The ministry is working very hard for the Liberian people to ensure that rice and other commodities are affordable and available on the market.”

Minister Bangura disclosed that in Montserrado, no business is allowed to add more than US0.10 to US0.15cents for a 25kg bag of rice purchased for US$17 or US$17.50.

“If you are taking the rice to Kakata, we have another margin of maybe US0.5cents difference. We add US0.5cents based on the distance you are talking the rice.”

He, however, threatened that the ministry will take punitive measures against importers and others increasing the price of the nation’s staple food in the wake of the depreciation of the local currency.

Provided by SyndiGate Media Inc. (Syndigate.info).