Monrovia – The Liberian People’s Party (LPP) has called on President Joseph Boakai to explain if the $714M dollars needed to pay for Liberia food projects between 2024 through 2030 is another debt to be added to Liberia’s US$2.3B dollar debts.
The LPP said while it appreciates the Boakai administration for stressing the importance of food sufficiency alongside modern and reliable infrastructure, the Unity Party-led administration should also pay attention to the consequences of excessive debts.
In less than six months since his inauguration on January 23, 2024, President Boakai has disclosed his intent to spend $60M (estimate) for the 285 Yellow machines and $70M (estimate) for 300 buses, and is now proposing to borrow $714M to be spent for agriculture.
The LPP says such proposed spending means that the country is acquiring more debt and it has consequences, considering the high interest payments, private financial crowding, the possibility of debt distress, among others.
Liberia’s ‘high interest payments’
A review of the records show that interest payments accounted for the larger proportion of Liberia’s $4.7bn debt portfolio, which was cancelled or forgiven in 2010.
The LPP believes the point being made here is that interest charged by the World Bank on loans given to creditor nations, including Liberia, is much too high. “For example, for a loan of $233m awarded to Liberia by the World Bank, an amount of $1bn was charged as interest on the principal sum($233m) owed to the World Bank and other external banks).”
“More to that it is important to underscore that the World Bank performs three (3) functions for and on behalf of Liberia as a. Official economic advisor to the Liberian Government, b. Largest Creditor and c, an Investor in the country’s economy,” the LPP said.
One key aspect of borrowing money from the west, LPP said, is the International Finance Corporation (IFC), a World Bank subsidiary/affiliate, is a major investor in the Bea Mining Corporation currently exploiting rich gold deposits in Kinjor, Grand Cape Mount County.
“The possibility of debt distress, distressed debt refers to the securities of a government or company that has either defaulted, is under bankruptcy protection, or is in financial distress and moving toward the aforementioned situations in the near future.”
Additionally, philanthropists had withheld their donations even though, in 2006, Liberians democratically elected former President Ellen Johnson Sirleaf, the first female president of Africa, a stellar personality much touted and feted by the World Bank.
Economic hardship resulting from excessive debts is not limited to Liberians. LPP added that apparently President Boakai’s advisers have embraced the theory that the 5.1 to 5.8 growth in the economy would generate adequate revenue to pay back debts incurred to finance projects.
At the recent Agricultural Seminars dubbed “Liberian Feed Yourself Agenda”, a Government official announced that Liberia will acquire/credit $714M to finance Agricultural activities from 2024 through 2030.
Unfortunately, the speaker did not say if government will play a role, oversight or otherwise in implementation or whether it will transfer the $714million dollars to private investors recalling the Sirleaf/Boakai administration transfer of US$30M to a private investor to manage the failed Foya Rice Project and, recalling also that International
The LPP firmly believes that a sustainable development strategy cannot rely on excessive borrowing of money. LPP cautions government that, in its response to popular demands for quick deliverables, to resist the urge to borrow excessively based on rosy economic projections which may prove unfounded and leave government stranded unable to pay back those loans at maturity.
National Executive Committee, LPP.
The LPP said it believes that a sustainable development strategy cannot rely on excessive borrowing of money. LPP cautions the government that, in its response to popular demands for quick deliverables, to resist the urge to borrow excessively based on rosy economic projections which may prove unfounded and leave the government stranded unable to pay back those loans at maturity.
“Government should play a lead role to ensure food sufficiency because private entrepreneurs always tend to redirect capital to quick profit-making ventures,” the LPP says.
The LPP called on the Boakai administration to abide by the December 6, 2019 Memorandum of Understanding signed between the Liberian government and the Central Bank, which stipulates that the government should begin paying the $487M dollar debt in 2029 and redirect the payment to finance agricultural activities.
The LPP also urged the Boakai administration allocate 50% of the proceeds from all assets recovered to finance agriculture. Also, reduce by 25% the money appropriated for National Security Administration, Executive Presidential Service, and Legislature, as well demand 15% cuts of allowances and compensations paid to all officers, including allowances to board members of state-owned entities.
