The World Bank has suspended its access to “unwithdrawn loans” in Liberia after the country defaulted 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 suspension comes as Liberia ushers in a new administration led by Joseph Boakai following presidential elections on October 10.
The country’s right to withdraw from the Disbursing Loans and specific Trust Fund grants is now temporarily halted until the debt to the Bank is serviced.
For the incoming administration, the suspension will have a serious impact on Liberia’s capacity to borrow from other lenders and will require the new leaders to negotiate repayment timing with the World Bank.
While the World Bank says that Liberia’s economy grew by 4.8% in 2022, the country’s fiscal position worsened with its deficit estimated to have risen to 5.6% of GDP in 2022, up from 2.4% in 2021.
It adds that, with a debt-to-GDP ratio of 53.4, the west African nation is at “moderate risk of external debt distress and high risk of overall debt distress”.
The Liberian economy, focused on agriculture and mining, is set to grow by 4.5% in 2023.
