Liberian Government Denies Defaulting On Payments After World Bank Suspends Funding

The Liberian government has denied defaulting on payments after the World Bank suspended the country’s access to funding.

The World Bank told FrontPage Africa that as of August 15, 2024, Liberia’s repayment obligations had been overdue for 60 days, leading to a halt in the withdrawal of funds, which include credits, grants, and trust funds.

However, the Liberian Ministry of Finance and Development Planning (MFDP) in a statement, said that the government has not defaulted on its obligations to the International Development Association (IDA), the primary financing arm of the World Bank for low-income countries. The ministry said that the delays in loan payments were due to logistical issues, not an inability or unwillingness to pay.

MFDP stated that President Joseph Boakai’s administration has paid a total of $44.26 million since January 2024, which includes $23 million in arrears from 2023 left by the previous administration and $21 million in external debt repayments due this year.

The ministry further explained that the Central Bank of Liberia (CBL) had faced challenges in repayment due to changes in its external transfer schedule. The Federal Reserve Bank of New York reduced the bank’s transfer days from five days a week to two days following irregular transactions before the Boakai administration took office in January 2024.

The ministry clarified that some IDA loan repayments did not align with the new transfer dates, which led to the misunderstanding that Liberia had defaulted, the ministry said.

Nevertheless, the World Bank said it would support Liberia financially once the overdue debts are cleared.

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