MONROVIA: When the International Development Association (“World Bank”) a week or two ago announced loan suspension for Liberia, it sent out a demeaning image for the George Weah administration which over the years has beat many odds in order to the keep the Liberian struggling economy afloat amid stern challenges, thus maintaining good relations with the Bretton Woods system for six years. In fact, others thought news about the loan suspension was the final nail in the coffin of the outgoing administration widely demonized by the opposition community as being corrupt and incompetent—all wild and unsubstantiated perceptions. But it seems the administration would not let such a dint stand for a minute to deface its legacy, and in no time, it fought very hard to meet all that was required to purge off the suspension action and get on even track with the World Bank once again, as The Analyst reports.
The Government of President George Manneh Weah must have felt the hit when the International Development Association (World Bank) announced mid-November suspending withdrawals under the Suspended Loans, something apparently inhabiting the Government’s relations with the Bank.
The World Bank November14 suspended its access to “unwithdrawn loans” after the country defaulted on loan repayments by 60 days under the administration of outgoing president George Weah.
The decision to suspend access was conveyed in a letter on November 15 to Liberia’s Finance Minister Samuel Tweah, from the Vice-President of the Western and Central Africa region at the World Bank, Ousmane Diagana.
The lifting of Suspension
But in a number of days, the Liberian Government is once again on track with its principal donor, the World Bank, as it has noted receiving “all the overdue payments referred to” in the suspension notice.
In a letter to Finance Minister Samuel D. Tweah, and signed Elisabeth Huybens, Director for Strategy and Operations, Western and Central Africa, the World Bank states: “In reference to the notice issued by the International Development Association (“World Bank”) to the Republic of Liberia (“Member Country”) dated November 15, 2023, suspending withdrawals under the Suspended Loans referred to in said notice, we are pleased to inform you that the World Bank has received all the overdue payments referred to in the suspension notice and all other payments owed by the Member Country that have fallen due since the Suspension Date referred to in said notice.”
The communication, dated November 28, 2023, further asserts: “The Member Country is therefore now current on all payments owed by them to the Bank under the Suspended Loans. Consequently, the suspension of withdrawals under the Suspended Loans has been lifted as of November 24, 2023.”
In the last six years of its existence, the Weah administration (now outgoing), unlike its predecessor which is about to retake state power, has had little or no luxury for credit facility and a wider sphere of economic largess save for that of the World Bank Group that has been the sole relief for Liberia.
The lifting of the suspension, according to economic experts, is a boost to the Weah administration’s fiscal credentials and paves the way for the incoming administration.
Reasons for the Suspension
According to the World Bank when it announced the action mid this month, it was suspending Liberia from accessing “unwithdrawn loans” due to the failure of the Weah administration to service previously disbursed loans.
World Bank vice-president of the Western and Central Africa region, Ousmane Diagana explained that the suspension decision comes after the outgoing Weah administration failed to meet its debt payment obligations.
This, despite Finance Minister Samuel Tweah being notified ahead of time on October 31, that “Liberia has reached 60 days overdue on its debt repayment to the World Bank.”
In its response, the World Bank emphasises that its “ability to mobilise resources for the benefit of the country and its people, depends critically on the punctual servicing of debt to the bank. We hope that the arrears situation can be resolved promptly so that operations can resume for the benefits of the people of Liberia.”
The World Bank has been a long-standing partner of Liberia and has reiterated its commitment to support the African state to overcome the development challenges the country is enduring.
In his suspension letter to Tweah, dated November 15, Diagana wrote, “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 said the suspension would affect financing from the International Development Association, Project Preparation Facility Advances, and Institutional Development Fund grants.
The suspension, the letter added, is also expected to affect other grants and loans financed under trust funds administered by the World Bank, which might be made to or guaranteed by Liberia or other recipients for projects carried out within the country.
Diagana said the World Bank regretted having to take such action but indicated 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.”
Meanwhile, Diagana’s letter noted that during the suspension period, the Bank would 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.