Liberia’s total debt stock has reached $2.5 billion, with domestic debt surpassing $1 billion. Finance Minister Augustine Ngafuan attributed this rise to excessive borrowing in the Weah-Taylor administration, creating a trust deficit with creditors. Efforts are underway to improve financial credibility, increase economic growth, and enhance infrastructure, notably through energy projects and road development.
In a recent revelation, Liberia’s Finance and Development Planning Minister, Augustine Ngafuan, reported that the country’s total debt stock has escalated to over $2.5 billion, with domestic debt exceeding $1 billion. This rise in debt is primarily attributed to excessive borrowing during the Weah-Taylor administration, heavily relying on loans from commercial banks to fund operations. Increased unpaid obligations to contractors, service providers, and small businesses have significantly contributed to this growing burden.
Minister Ngafuan remarked on the significant trust deficit that exists between the government and creditors, stemming from consistent defaults on payments by previous administrations. This has hindered vendors and contractors from engaging in business with the government. “The debt stock of Liberia is over $2.5 billion—a total that signals serious financial obligations,” he stated.
In efforts to rebuild trust, Ngafuan shared that the government borrowed $80 million from the Central Bank of Liberia (CBL) to pay civil servants. The administration is focused on restoring financial credibility by honoring existing commitments. “Commercial banks are beginning to trust the government again, and we are making payments on interest owed,” Ngafuan explained, indicating improved business relations with previously reluctant vendors and contractors.
To address fraudulent claims, the General Auditing Commission (GAC) has initiated a verification process of debts owed to vendors, uncovering over $400 million in bogus claims. “We are reversing the situation, and confidence is returning,” he noted, emphasizing that vendors must fulfill their obligations before receiving payment.
Despite these financial challenges, Ngafuan remains optimistic about Liberia’s economic outlook, projecting a 6% growth rate for the year. The government aims to expand its tax base and improve revenue mobilization to lessen dependency on loans. Recognizing new revenue sources, he indicated that enhanced financial returns from the extractive sector are a priority.
Ngafuan disclosed plans for energy development with assistance from the World Bank and African Development Bank, aiming to raise electricity access from 30% to 75-80% by 2030. Initiatives include a new hydroelectric facility and expanded solar energy generation, necessitating an investment of $1.3 billion.
Emphasizing infrastructure’s role, Ngafuan advocated for road improvements to foster economic activity. Efficient transport would allow farmers to reduce losses and enhance product distribution. Furthermore, ongoing discussions with the National Port Authority aim to streamline business operations by extending port hours and facilitating online transactions.
In conclusion, Minister Ngafuan reiterated the government’s commitment to stabilizing the economy and restoring trust with creditors and investors. By focusing on infrastructure, energy accessibility, and building stronger business relationships, the administration intends to create a favorable environment for economic growth and development in Liberia.
In summary, Liberia’s increasing debt burden poses significant challenges for the government, with total debt exceeding $2.5 billion, attributed largely to excessive borrowing. The administration is taking steps to rebuild trust with creditors, improve financial credibility, and streamline operations. Optimism surrounding economic growth and plans for energy and infrastructure development indicates a commitment to enhancing financial stability and promoting sustainable growth in Liberia.
Original Source: frontpageafricaonline.com
