Controversy hangs over US426m loan


President George Weah has submitted a new pre-financing loan agreement worth US426 million before the national Legislature for rectification, just at the time lawmakers here are still debating an initial US536m pre-financing loan for costal roads here amidst controversies.


The new loan in question is between the government of Liberia and Group EBOMAF is is expected to be financed by EuroBond. It is, according to a government statement redeemable after 15 years with a 5-year grace period and a 10-year interest only on payment.

The Weah administration says when ratified, the loan will be used for the construction of 256.2 kilometres of paved roads and bridges in Monrovia and major corridors of the interior of the country.

They say Group EBOMAF will begin pre-financing the road project within three months after the agreement is ratified.

The government has named the Sinkor to Kesselley Boulevard elevated Road, Zwedru to Greenville, Toe’s Town to Ivorian Border, and Tappita to Zwedru roads as projects to be financed by the loan.

But there are critics who have raised eyebrows over the acquisition of the loan, saying it is too early for the young government which is just in entering into its 6 months to have accrued about USD$1 billion over such a short period.

The critics further argued that the source of the loan is questionable especially at the time where there are controversies over the relationship between the lender and the President. Some say the loan could leave the 15th poorest West African nation smarting under a huge debt burden.

But the Weah administration maintains that the acquisition of this pre-financed agreement, coupled with the agreement to pave 503 kilometres of roads connecting the coastal cities as well as parts of Western Liberia makes it worth the risk.

The administration argues that it is poised to construct more kilometres of paved roads within Weah’s first term as President than the entire kilometres of paved roads that have been constructed by all previous administrations combined; within the over 170 years of Liberia’s existence as a sovereign nation.

The government said the decision to acquire to loan have been fully endorsed by the Cabinet. The government added that by virtue of the new agreement, Liberia stands to gain a great deal of economic growth through the creation of jobs as well as a significant increase to Liberia’s GDP.

 

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