World Bank Suspends Liberia's Access to Loans over Unsettled Depths Raising Concerns for Economic Stability

Nov 22, 2023 - 15:27
Nov 22, 2023 - 15:41
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World Bank Suspends Liberia's Access to Loans over Unsettled Depths Raising Concerns for Economic Stability

The World Bank has taken the unprecedented step of suspending Liberia from accessing unwritten loans due to the failure of President George Weah's administration to service previously disbursed loans. The Bank's decision, which has raised significant concerns about the country's economic stability, comes as the outgoing Weah administration finds itself 60 days behind on its debt repayment.


Ousmane Diagana, the World Bank Vice-President of the Western and Central Africa region, emphasized in a detailed statement that the suspension decision was made after the Weah administration failed to meet its debt payment obligations, despite Finance Minister Samuel Tweah being notified ahead of time on October 31.


"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 added.


"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," said Diagana's letter to Liberia’s Minister of Finance, Samuel D. Tweah Jr., dated November 15.


The suspension, outlined in the letter, is expected to impact financing from the International Development Association, Project Preparation Facility Advances, and Institutional Development Fund grants. Additionally, it will affect other grants and loans financed under trust funds administered by the Bank, which might be made to or guaranteed by Liberia or other recipients for projects carried out within the country.


While expressing regret for the necessity of such action, Diagana emphasized that the suspension would only be lifted once all outstanding payments are settled, expressing "sincere hopes for a swift resolution to allow the resumption of withdrawals, supporting the crucial operations the Bank has been backing in Liberia."


The World Bank Liberia office, when contacted for clarity, informed the Daily Observer that the suspension would have implications for the incoming government of President-elect Joseph N. Boakai. They highlighted that Liberia has reached 60 days overdue on its debt repayment to the World Bank, impacting the Bank's ability to mobilize resources for the benefit of the country and its people.


Diagana's letter further noted that during the suspension period, the Bank will continue to withdraw from the loan account of the relevant suspended loan to pay amounts requested by commercial banks and payable under outstanding special commitments issued by the Bank on or before the suspension date.


"Until the suspension is lifted, no disbursement will be made to the designated account(s) of the suspended loans. Nevertheless, applications received by the Bank on or before the date 90 days after the suspension date, covering payments made or due to suppliers and contractors under contracts
signed before the suspension, for goods supplied, services provided, and works carried out within 60 days after the suspension date," the letter added.


"However, the suspension will not apply to withdrawals under the suspended loan payment requests from commercial banks holding special commitments issued by the Bank on or before the suspension date," Diagana concluded. "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."

 

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Daniel Theo Cole Daniel Theophilus Cole is a Senior Reporter at Kool 91.9 FM/TV/Knewsonline. Cole has a keen interest in Human Interest, Political, Economy, and Agricultural Stories. His passion for journalism extends beyond self-interest. Cell#0776762186 Email: [email protected]