Liberia Begins Path Toward Debt Relief

WASHINGTON, December 10 – Over the past year President Ellen Johnson Sirleaf has led a vigorous and steadfast campaign for Liberia’s debt relief. The campaign gained momentum during the Annual Meetings of the World Bank and International Monetary Fund in Washington in October, where President Sirleaf, along with the Liberian Minster of Finance Antoinette Sayeh, tirelessly campaigned for Liberia to move on from its arrears situation to a path of sustained growth and development.

Liberian President Ellen Johnson-Sirleaf

The overdue obligations to the International Bank for Reconstruction and Development (IBRD) amounted to around $344 million and those to the International Development Association (IDA) to around $56 million. The payment of these arrears is part of a comprehensive plan for arrears clearance that includes the IMF and the African Development Bank. The financing for the plan was made possible by the support of a wide range of shareholders at the three institutions and marks an important step for Liberia on the road to sustainable economic recovery and engagement with the international community.

In a joint press conference with the World Bank in Liberia the Minister of Finance, Antoinette Sayeh, explained that the arrears clearance “marks the beginning of a new era as the country normalizes its economic relations with the international community, which have been strained for well over 26 years”.

Indeed the clearance of the arrears heralds a new chapter in Liberia’s relations with the Bank, one that will allow it to fully benefit from resources from IDA to finance its reconstruction and development program. It also means that Liberia will be able to begin the process of obtaining debt relief under the Highly Indebted Poor Countries’ (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) programs.

With the clearance of Liberia’s arrears, the World Bank, along with the international community, firmly recognizes the progress made by the Government of Liberia on its reform agenda over the past two years, especially in the areas of economic governance and accountability, infrastructure rehabilitation and the provision of basic services.

Although still one of the poorest countries in the world, Liberia has undergone profound changes since the signing of the Accra Comprehensive Peace Agreement of August 2003.

Following 15 years of civil war and two years of a transitional government, peaceful, free and fair elections were held in October-November 2005, and Johnson-Sirleaf’s administration has produced substantial reform. Together with international partners, Liberia has worked to ensure a peaceful society and to revive its once thriving economy.

“The World Bank has stood by Liberia since immediately after the Accra Comprehensive Peace Agreement and through the difficult period of the National Transition Government,” said World Bank Country Manager for Liberia Luigi Giovine. “It has been a great satisfaction to have supported Ellen Johnson Sirleaf’s reform minded government all the way to the critical milestone of arrears clearance.”