Liberia: World Bank Clears Country’s U.S.$400 Million Debt

The Inquirer (Monrovia)-6 December 2007

The Government of Liberia and the World Bank have concluded arrangements for the clearance of all of Liberia’s arrears to the Bank, amounting to more than US 400m.

The Executive Mansion, quoting a Finance Ministry release says the clearance of the arrears to the Bank and to other multilateral agencies, in the weeks ahead, will enable Liberia to begin the process of obtaining debt relief, under the Highly Indebted Poor Countries’ Initiative (HIPIC).

Liberia has been in arrears to the Bank for more twenty-one years, dating back to 1986.

The decision of the Bank to clear Liberia’s arrears is a direct result of a vigorous debt relief campaign led President Ellen Johnson Sirleaf and supported by Finance Minister Antoinette Sayeh.

The Clearance of the arrears will allow Liberia to fully benefit from resources from the International Development Association (IDA) to finance the country’s reconstruction and development program.

The Government continues to work with the African Development Bank and the International Monetary Fund with the view of having the arrears to both institutions cleared by late January 2008.

The latest decision by the World Bank to clear the more than $4-hundred million and arrears Liberia owes the Institution follows a comprehensive arrears plan reached last month by the Bank. The Agreement positions Liberia for debt relief under the Heavily Indebted Poor Country Initiative and the Multilateral Debt Relief Initiative (MDRI).

It covers Liberia’s Arrears to the World Bank and the IMF, and will permit Liberia to rapidly clear much of its arrears to smaller multilateral creditors and, with the Paris Club assistance, to clear much of its arrears to bilateral creditors.

Liberia’s total arrears to the International Financial Institutions amount to $1.5 billion, including the just cleared more than $4-hundred million to the World Bank, $772-million to the IMF and $233-million to the African Development Bank.