By Blesset D. Kpenkennie
Monrovia – Liberia: In a 3-page letter to the Acting Finance Minister of Liberia, Mr. Anthony G. Myers, the World Bank through its Regional Vice President for Western and Central Africa, Mr. Ousmane Diagana, has cut off all disbursements, including IDA financings and PPF advances, to Liberia due to the Liberian Government’s failure to pay its outstanding debt amounting to US$2,452,198.03.
The leaked letter in possession of Verity News shows that the Liberian government defaulted on its IDA loan which was borrowed under nine (9) separate projects including the Liberia Electricity System Enhancement project, the West Africa Agric Production Program, the Road Asset Management project, the Urban and Rural Infrastructure project, the West Africa Regional Energy Trade project among others.
According to its Regional Vice President for Western and Central Africa, the World Bank said it has taken the decision not to continue disbursements of any new IDA financings and PFF advances to Liberia.
“No new IDA financings to or to be guaranteed by the Member Country will be presented to the Bank’s Executive Directors for approval, and no agreements related to approved IDA financings or PPF advances to or to be guaranteed by the Member Country will be signed. The Bank will not make disbursements to the designated accounts established under any IDA financings or loans/grants financed under trust funds. Furthermore, we must advise you that unless all payments due under all IDA financings and PPF advances have been received by the Bank by the close of business on or before August 14, 2024, further withdrawals under all effective and not fully withdrawn IDA financings, PPF advances, and IDF grants will be suspended,” Mr. Ousmane Diagana, Regional Vice President of the World Bank, said in his letter to Acting Finance Minister Anthony Myers
.
Furthermore, the World Bank said it is obligated to inform other co-financiers and the African Development Bank about its decision to suspend all withdrawals by Liberia while at the same time cautioning the Liberian Government to take immediate steps to pay its debt.
The MFDP’s Side:
Verity News placed calls to and texted the Minister and the Deputy Minister of the Ministry of Finance to inquire on the leaked letter relating to GOL’s accrued financial obligations with the World Bank but to no avail. However, an authority in the management of the Ministry, who prefers anonymity, confirmed to Verity News that the debt in question has already been paid and wired to the accounts of the World Bank around August 15, 2024, while other debts are being processed for timely payment according to the authority who spoke with Verity News.
What could this World Bank’s withholding of disbursements to the Government of Liberia mean for the Economy and Liberians?
According to the current data, the value of the World Bank’s financing portfolio in Liberia is estimated at US$1 billion of which 88.7% constitutes IDA financings. The World Bank is financing and has made commitments to finance dozens of different multimillion projects in Liberia including the Liberia Electrification Sector Strengthening and Access Project (US$50M), the Rural Economic Transformation Project (US$85M), Liberia Women Empowerment Project (US$44.60M) among many others.
Fiscal and Economic Analysts have told Verity News that the socio-economic impact would be severe if all disbursements are cut off from Liberia, especially for a protracted period due to the fact that the World Bank is like a lifeline to the Liberian economy. They argued that ongoing projects and economic activities could be stalled if the government fails to address this situation as soon as possible.
