-Warn Proposed Diaspora Fund Could Burden Families, Encourage Informal Transfers
MONROVIA, LIBERIA — Two concerned Liberians residing in the diaspora, James Jornyoun and Alfred Sieh, have raised strong concerns over the proposed Diaspora Development Fund Act of 2026, warning that any attempt to finance national development through taxation on remittances could place an unfair burden on Liberians abroad and their families back home.
Their concerns come amid ongoing public debate surrounding a proposal linked to the establishment of a Diaspora Development Fund, which recently generated national discussion after a diaspora advocacy group suggested a US$1 remittance contribution mechanism aimed at supporting Liberia’s development agenda.
While supporters of the proposal argue that the initiative could create a sustainable pool of funding for infrastructure and social development projects, critics say the approach risks penalizing Liberians who already contribute significantly to the country’s economy through regular remittance inflows.
In a joint statement, Jornyoun and Sieh described dependence on remittance taxation as “an ineffective and unsustainable policy approach,” citing concerns highlighted in analyses by the International Monetary Fund (IMF) and the World Bank Group.
“Double Burden” on Diaspora Liberians
According to the two diaspora Liberians, imposing additional charges on remittances would create what they called a “double burden” on Liberians living abroad, many of whom are already paying income taxes in their countries of residence.
“Diaspora Liberians are already subject to income taxation in their countries of residence,” the statement noted. “Imposing additional taxes on remittances disproportionately affects working households and the family members who rely on these transfers for basic needs.”
Remittances remain a major lifeline for thousands of Liberian families, supporting food, education, healthcare, rent, and other household expenses.
Economic analysts have long recognized remittance inflows as one of Liberia’s most stable external financial sources, particularly during periods of economic hardship.
Call for Diaspora Political Representation
Meanwhile, Sieh and Jornyoun argued that if the Government of Liberia is serious about imposing taxation on Liberians living abroad, then diaspora communities should also be granted greater political inclusion and constitutional representation.
According to them, diaspora Liberians deserve a direct voice in national governance through out-of-country voting rights and legislative representation.
The two men proposed that 10 percent of seats within Liberia’s Legislature should be allocated to Liberian diaspora communities as part of broader democratic reforms.
Observers note that debates surrounding diaspora voting and political representation have intensified in recent years, particularly as remittances from Liberians abroad continue playing a major role in sustaining the national economy.
Warning Against Informal Transfer Channels
Jornyoun and Sieh also warned that increasing the cost of formal remittance transfers could unintentionally drive many Liberians toward informal and unregulated money transfer systems.
According to them, such a development could weaken financial transparency, reduce oversight, and create opportunities for illicit financial activities.
“Increasing the cost of formal remittance transfers may incentivize the use of informal, unregulated, and potentially illicit channels,” the statement cautioned.
The two Liberians further argued that overdependence on remittance-based financing could gradually reduce pressure on government to improve public service delivery and accountability.
“Excessive reliance on remittance inflows can reduce pressure on the state to provide essential public services and may, over time, weaken public demand for government accountability,” they warned.
Questions Over Economic Viability
The statement also questioned the long-term fiscal effectiveness of remittance taxes, arguing that similar policies elsewhere have historically produced limited financial returns relative to the administrative and enforcement costs involved.
According to the pair, such systems often encourage avoidance behavior while failing to generate meaningful development revenue.
“For these reasons, policy experts generally recommend that governments prioritize the creation of a stable and attractive investment climate,” the statement added.
The two men instead encouraged policies that would voluntarily attract diaspora investment into savings, entrepreneurship, and productive economic sectors rather than compulsory remittance deductions.
Clarification on Escrow Accounts
Addressing another aspect of the ongoing discussion, Jornyoun and Sieh clarified that while escrow accounts can legally be opened in Liberia, such accounts cannot be established directly through the Central Bank of Liberia (CBL).
“The CBL acts as a regulatory and oversight body and does not offer retail or commercial banking services to the public,” the statement explained.
The clarification appears connected to ongoing public conversations about possible financial management structures for any future diaspora development initiative.
Debate Continues Over Diaspora Contribution Model
The proposed Diaspora Development Fund has generated mixed reactions among Liberians both at home and abroad.
Supporters believe the initiative could harness the economic strength of Liberia’s large diaspora population to help finance national development priorities, especially at a time when external donor support continues to decline globally.
Critics, however, insist that any contribution mechanism must remain voluntary, transparent, and carefully structured to avoid placing additional financial strain on diaspora families already supporting relatives in Liberia.
The debate also reflects broader national discussions surrounding governance, transparency, public trust, and sustainable domestic resource mobilization.
As public consultations continue, observers say the success of any future diaspora financing initiative will likely depend on strong accountability mechanisms, broad stakeholder engagement, and public confidence in how funds would be managed and utilized.
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