Liberia: “Domestic Debt Reaches US$708M”

Deputy Finance Minister for Economic Management, Flomo: "it will take the government ten years to pay the US$708 million in full"



— Says Deputy Finance Minister

Augustus J. Flomo, Deputy Finance Minister for Economic Management, recently disclosed that the domestic debt portfolio of Liberia has climbed to US$708 million since December 2021. 

The deputy finance minister said due to the increase of domestic debt, his ministry is now adhering to the President's decision not to borrow any funds from the Central Bank of Liberia (CBL) to pay off the current debt.

President George Weah has reportedly put a block on borrowing money from the Central Bank since 2019, according to the deputy minister for Debt Management at the MFDP. Flomo made the disclosure on the nation's domestic debts when Senator Abraham Darius Dillon of Montserrado County, posed a question to him recently before the Senate Committee on Ways, Means, and Finance.

"The government owed the CBL US$233 million, the National Social Security and Welfare Corporation (NASSCORP) US$50 million, and commercial banks US$55 million before the President made his decision in 2019,” he explained. "After the President ordered in 2019 that no money be credited from the CBL, further debts were calculated and imputed to the government grant, totaling US$708 million."

Flomo further revealed that the government's debt increase began as early as 1930, even though he was fully aware that the government is in continuity. He emphasized that some of those instances were litigated in court and that the government was successful in winning some of them based on the admissible evidence provided.

He, however, said that the government has set aside US$72 million for domestic debt in the 2020–2021 budget and another US$69 million in the 2022 budget to help the country pay its debts. 

According to him, if it is done annually, it will take the government ten years to pay the US$708 million in full.  But early this year, Weah said his administration has made significant progress in restructuring the country's domestic debt, which stands at US$660 million, saying the total stock of external debt now stands at approximately US$1.03 billion.

In his 5th Annual Message delivered at the Fifth Session of the 54th Legislature Monday, 24 January 2022, Weah added that the total public debt stock is valued at US$1.69 billion as of 31 December 2021.

He also said all debts owed to the Central Bank of Liberia (CBL), including the debt owed to the former National Bank of Liberia, were bundled into a Restructured and Consolidated Loan at the start of the International Monetary Fund (IMF)-supported program two years ago.

However, Flomo further informed the committee that an audit of the nation's internal debt is now being conducted by the General Auditing Commission (GAC).

Senator Prince Moye, the co-chair of the Committee on Ways, Means, and Finance, informed the Minister after the public hearing that the committee will adjourn to the committee room and ask his office to provide some documents needed for the committee's consideration.