Liberia: Gov’t Commits to Servicing Domestic, External Debts

Deputy Finance and Development Planning Minister for Fiscal Policy, Anthony Myers has expressed strong commitment of the Boakai administration to service the government’s domestic and external debts.

According to the government’s public debt service portfolio as captured in the administration’s recently submitted draft national budget to the national Legislature, the total debt service, subscription, and other payables for FY2024 are projected at US$217.28 million, representing a 117.69 percent increase compared to the FY2023 forecast of US$99.81 million. 

However, US$129.00 million has been allocated to service this debt. This represents an increase of 29.26 percent compared to the FY2023 forecast of US$99.81 million. 

Moreover, the overall debt stock as of December 2023 stands at US$2,337.26 billion, of which domestic debt is US$1,022.00 billion (43.73 percent) and external debt is US$1,315.26 billion (56.27 percent).

Myers attributed the increase in the budgetary allocation of the Ministry of Finance and Development Planning mainly due to the commitment of the government to finance the accumulated debt incurred by other institutions of government. 

He said it is so because it is the responsibility of the Ministry of Finance to finance the activities and liabilities of other government entities.

He noted that the allocation of US$129 million was a major reason that led to the increase in the allocation to the Ministry in the FY2024 draft National Budget.

Minister Myers further clarified that as a function of government, the Ministry of Finance and development is the institution responsible for debt management.  

He stressed that by increasing debt servicing, the government wants to, as he put it, be “responsible” to domestic and foreign partners.  

However, servicing the debt obligations to domestic banks, for example, would help strengthen the capital portfolio of the commercial banks and keep them more viable thus preventing them from collapsing.  

He added that servicing the government’s external debt obligations will help create space for the needed support to finance the government’s development plan for the next five (5) years.

Speaking at the MICAT regular Press Briefing on Thursday, March 28, where he led a team of Senior Managers from the Finance Ministry including the Deputy Minister of Budget and Development Planning, Tanneh Brunson, the Deputy Minister of Administration, Bill McGill Jones and Sarah Mulbah.

Myers also disclosed a more favorable outlook for the country’s economy, it is projected to expand to 5.3 percent in 2024 and by an average of 6.4 percent in the medium term (2025-2027).  

This is a progress from the 4.6 percent Real GDP expansion in 2023 based on growth in the mining, manufacturing, and services sector.

The Deputy Minister of Fiscal Policy at the Finance Ministry also expounded on a number of macroeconomic assumptions that informed the preparation of the Draft FY2024 National Budget.

Among them were: favorable GDP growth rate, expected rise in imports due to anticipated increase in major commodities outturn in all sectors of the economy, projected increase in government revenue due to expected rise in mining, manufacturing, services and primary commodity output, moderation of inflation and stability of exchange rate in the medium term, etc.

The draft 2024 Draft National Budget, which was recently submitted to the national Legislature, constitutes a resource envelope of the total draft resource envelope for FY 2024 in the tune of US$692,409,245.53. Domestic currency constitutes 28 percent or (L$41.1 billion), while the remaining 72 percent (US$500.4 million) is in United States Dollars. Projected annual average exchange rate is US$1:213.82.

Total projected revenue from domestic resource mobilization is US$649.9 million or 93.9%, while external resources account for US$42.4 million or 6.1 percent.