Liberia’s total debt has exceeded $2.5 billion, with domestic debt surpassing $1 billion. Finance Minister Augustine Ngafuan attributed this to previous excessive borrowing by the Weah-Taylor administration. Trust issues with creditors hinder business operations, though efforts are underway to restore credibility and improve revenue mobilization. The government projects a 6% economic growth rate while focusing on infrastructure and energy access enhancements.
Monrovia – Finance and Development Planning Minister Augustine Ngafuan has raised alarms regarding Liberia’s alarming debt crisis, reporting that the total debt stock has surpassed $2.5 billion, of which domestic debt exceeds $1 billion. Ngafuan attributed this growing burden to extensive borrowing by the Weah-Taylor administration, primarily from commercial banks, resulting in unpaid debts to contractors and small businesses.
Ngafuan emphasized that previous administrations’ consistent defaults on payments have eroded trust between the government and creditors. This trust deficit has hindered vendors and contractors from engaging in business with the government, creating significant operational challenges.
Efforts to address this trust deficit are underway, with Ngafuan noting that $80 million was borrowed from the Central Bank of Liberia to ensure civil servants receive their salaries. He reported progress in rebuilding credibility, revealing that commercial banks are beginning to trust the government again as it makes efforts to honor its financial obligations.
To address fraudulent claims and streamline payments, the General Auditing Commission (GAC) has been verifying debts owed to vendors. Ngafuan announced the discovery of over $400 million in fraudulent claims, stating, “We are reversing the situation, and confidence is returning. Now, vendors must deliver before the government makes payments.”
Minister Ngafuan remains optimistic about Liberia’s economic outlook, forecasting a growth rate of 6% for the year. He highlighted the government’s commitment to expanding the tax base and enhancing revenue mobilization to reduce dependency on external loans, focusing on new revenue sources, particularly in the extractive sector.
Additionally, Ngafuan revealed Liberia’s selection by the World Bank and the African Development Bank to participate in an energy compact aimed at increasing electricity access from 30% to between 75% and 80% by 2030. The government plans to construct a new hydroelectric facility, St. Paul Two, and expand solar energy initiatives, with an estimated investment of $1.3 billion already secured for funding.
Infrastructure development is also a priority, as Ngafuan stressed the necessity of improving roads to bolster economic activity. “Better roads mean improved connectivity, allowing farmers to transport goods efficiently and reducing losses due to spoilage,” he articulated.
Furthermore, ongoing initiatives with the National Port Authority aim to remove barriers to business operations. Potential measures include extending port hours and enhancing online transaction capabilities, which Ngafuan stated would be vital for local businesses: “Enhancing efficiency will help businesses thrive and add value to locally produced goods.”
In conclusion, Minister Ngafuan reaffirmed the government’s commitment to stabilizing the economy while rebuilding trust with creditors and investors. These efforts encompass managing debt, improving infrastructure, and boosting electricity access to create a conducive environment for business.
In summary, Liberia’s escalating debt, exceeding $2.5 billion, poses significant challenges to the government, as illustrated by Finance Minister Augustine Ngafuan’s remarks. The government aims to rebuild trust with creditors, enhance revenue mobilization, and improve infrastructure while targeting a 6% growth in the economy. Development plans include ambitious energy projects and ongoing efforts to support local business operations, all intended to strengthen Liberia’s economic stability.
Original Source: frontpageafricaonline.com
