The Ministry of Finance has revealed that Liberia did not default on the settlement of its outstanding obligations to the International Development Association (IDA) as being reported by some media institutions.
The IDA is the leading financing institution of the World Bank Group for low-income countries and provides low-interest loans and grants to promote sustainable economic growth and reduce poverty.
In a Finance Ministry release issued over the weekend, it reported that about US$44.3 million has been paid by the administration under Joseph Boakai since January 2024, after taking over as President of Liberia.
Also, the amount includes US$23 million outstanding from 2023 that was not paid by the previous administration and US$21 million out of the scheduled external debt repayments due in 2024, as the payments to the IDA so far stand at US$12.19 million.
Recently, it was reported that the World Bank has suspended Liberia’s access to crucial funding after the country defaulted on its payment obligations for 60 days; a move that could derail development projects just as the government grapples with austerity measures and a recast national budget.
The report also stated that the suspension which became effective on August 15, 2024, halts Liberia from withdrawing funds under active credits, Project Preparation Facility advances, Institutional Development Fund grants, and other loans and grants managed by the World Bank.
The Bank’s External Affairs Officer, Michael Sahr however confirmed the decision, thus expressing hope that Liberia would clear its overdue payments to resume project financing.
“The Bank looks forward to the Republic of Liberia’s payment of all overdue amounts and remains committed to supporting Liberia to ensure the effective implementation of all the projects in its portfolio, for the benefit of the Liberian people,” he added.
But the Ministry notes the reduction in external transfer dates at the CBL which poses challenges to the current administration, as the reduction in transfer dates is due to transfer risks resulting from poor management of external payments by the previous administrations at the CBL.
The Ministry therefore call on the media to carefully verify information before spreading news that could damage the country’s reputation locally and globally as well as in the face of its partners.
“The Federal Reserve Bank of New York which handles international payments for the CBL reduced the weekly transfer period from five days to two days as a result of irregular transactions through the CBL in the period before the January 2024 transition of power.
This means the due dates for some IDA loan repayments do not fall on the CBL transfer dates leading to what is being wrongly interpreted as defaults by the Government,” the release intoned.
It continues, “So, it is important that the challenges in debt management for the current government of President Boakai is not limited to the huge debt portfolio of 2.6 billion, including US$1.5 billion accumulated under the CDC government in six years compared to US$881.8 million during the entire 12 years of the first UP administration.”
“There is also the challenge of dealing debt payments that was scheduled in previous years but not paid and as such, the Ministry assures Liberians and partners that the government remains committed to strengthening its relationships with the World Bank and other international partners in recognition of the critical roles development partners continue to play in advancing the country’s development agenda.
The ministry’s priority remains the promotion of the government’s agenda through development partnerships for sustainable development, stronger and stable economy, and improved quality of life for all Liberians,” the release added.
