By Monrovia, Liberia- The World Bank has promptly blocked Liberia’s credit accessibility, blaming the administration of President George Weah’s inability to fulfill its debt settlement commitments. The Weah government is 60 days behind on debt repayments, thus this extraordinary move raises major questions about the soundness of the country’s economy.
In a thorough statement, World Bank Vice-President for Western and Central Africa Ousmane Diagana emphasized the seriousness of the issue and disclosed that the suspension was brought on by the administration’s inability to repay loans that had already been disbursed. The Weah government failed to fulfill its debt payment obligations on the final day of October despite previous alerts to Finance Minister Samuel Tweah.
“Effectively from November 15, the right of the respective borrower to make any further withdrawal of unwithdrawn amounts under the disbursing loans and the right to make any further withdrawal of unwithdrawn amounts under the trust fund grants and loans are collectively suspended,” Diagana maintained.
Important sources of funding such as grants from the Institutional Development Fund, Project Preparation Facility Advances, and the International Development Association would be impacted by the suspension. Moreover, it will have an impact on other grants and loans financed by Bank-managed trust funds, which would put projects in Liberia at risk.
In a letter dated November 15 to Liberia’s Minister of Finance, Samuel D. Tweah Jr., Diagana expressed the World Bank’s hope for a swift resolution. “We sincerely hope that all such payments will be cleared soon to allow the resumption of withdrawals for the execution of the important operations the Bank has been supporting,” the letter stated.
The World Bank indicated its expectation for a prompt resolution in a letter dated the 15th of November addressed to Samuel D. Tweah Jr., the Minister of Finance in Liberia, via Diagana. “We sincerely hope that all such payments will be cleared soon to allow the resumption of withdrawals for the execution of the important operations the Bank has been supporting,” added the letter.
The World Bank branch in Liberia emphasized that President-elect Joseph N. Boakai’s future administration will be impacted by the suspension. Liberia’s debt repayment has reached a 60-day past due state, which significantly hinders the Bank’s capacity to mobilize resources for the benefit of the nation.
The Bank will continue to take money out of the relevant loan account during the suspension period in order to satisfy payments demanded by commercial banking institutions and payable under pending commitments made prior to the suspension date. However, until the unpaid balance is paid in full, no funds will be disbursed to the specified accounts for the stopped loans.
“As is standard Bank practice, the suspension will continue until the member country and all other borrowers are current on all payments owed to the Bank under the suspended loans,”
Furthermore, Diagana said. Now, the crucial question is whether President Weah’s government is leading Liberia toward economic collapse or whether a speedy solution can be found to preserve the financial viability of the nation.
By: Alphanso G. Kalama
