Deputy Finance Boss reveals strategy to address debts

Liberia’s Ministry of Finance and Development Planning outlines strategy to address domestic and external debts.

By Kruah Thompson 

Monrovia, Liberia, April 1, 2024 – To tackle Liberia’s increasing domestic and external debts, Deputy Finance and Development Planning Minister for Fiscal Policy Anthony Myers has unveiled comprehensive plans to manage the country’s financial obligations.

The recently submitted draft national budget to the legislature highlighted the government’s dedication to addressing its public debt service portfolio. 

For fiscal year 2024, the projected total debt service and other payables amounted to a staggering US$217.28 million, marking a significant 117.69 percent increase compared to the FY2023 forecast of US$99.81 million.

During a regular briefing at the Ministry of Information in Monrovia, Deputy Minister Myers emphasized two crucial actions needed to manage the country’s debt effectively. 

Firstly, he revealed that the country’s aim is to reduce borrowing. For this fiscal year, the government plans to borrow only US$40 million, using existing arrangements from the previous administration. 

He said efforts will focus on debt repayment programs, and US$129 million will be allocated for debt servicing to reduce the debt stock domestically and externally.

“On the domestic debt front, it is important to note that the commercial banks in Liberia were struggling due to non-performing loans taken by government contractors who could not pay back refinancing that they took from various projects undertaken on behalf of the government.

He explained that when companies’ debts could not be paid, the government had to convert them to its debts, increasing domestic debt.

However, it was also making it difficult for contractors who provided significant infrastructure services to the country because they could no longer obtain refinancing.

 In response to these pressing concerns, the deputy finance boss said that in consultation with stakeholders, the ministry initiated negotiations with commercial banks to restructure the commission on these debts. 

Despite the effort, he also revealed that the country was at risk of losing its status in many ways on the external front.

 He added, “For example, the African Development Bank threatened to drop Liberia or take some primitive measure against the country.” He indicated that the government needed to make an additional payment to trigger funds into the many projects supported by the World Bank.

According to him, the ministry is doing its best to meet all necessary timelines and schedules for debt service on a weekly basis.

At the same time, Myers also shared a positive economic outlook, projecting GDP growth to expand to 5.3 percent this year and by an average of 6.4 percent in the medium term (2025-2027), driven by growth in the mining, manufacturing, and services sectors.

The draft FY2024 National Budget, recently submitted to the 55^th Legislature, totals US$692,409,245.53, with 28 percent in domestic currency and 72 percent in US dollars. Domestic resource mobilization is projected to contribute US$649.9 million (93.9%), while external resources account for US$42.4 million (6.1%) – the first financial instrument from the Boakia administration. Editing by Jonathan Browne