Several companies, including the Prestige and Alliance Motor Corporation, are now running back to the Commercial Court for settlement of over US$100 million the Liberian government owed them. The companies’ action comes a week after the Executive Board of the International Monetary Fund (IMF) approved US$20.7 million for the government to offset its domestic financial obligations.
The world financial institution said the US$20.7M was part of its seventh and eighth final review of Liberia’s economic performance under the program supported by the Extended Credit Facility (ECF) arrangement.
Prestige and Alliance Motors alleged that government was indebted to them in the amount of US$10.7 million for vehicles and spare parts they supplied from 2003 to March 2008, but are yet to receive any payment, which case has been at the Commercial Court for almost three years.
The two companies are owned by Lebanese businessman George Haddad. The court has now reopened the case for hearing today, Tuesday, November 21.
The decision to resume the case comes two months to the end of President Ellen Johnson Sirleaf’s administration. She is expected to use the money and pay back her government’s inherited debt, and many of the companies the government is allegedly indebted do not want their debts to go unpaid.
The Haddad case was forced to be suspended when Chief Judge Eva Mappy Morgan denied state lawyers’ contention that her court lacked legal jurisdiction over the case.
The lawyers’ argument at that time was that the Commercial Court was established in 2010, and therefore lacked jurisdiction to hear cases beyond 2010.
It was based on that argument that Judge Morgan, in a ruling then, said, “the act that established the Commercial Court in 2010 gives it jurisdiction to handle all commercial matters without intimidation.”
The IMF said the disbursement of US$20.7 million to the Liberian government brings to bear the total of about US$156.7 million.
The IMF Executive Board also approved the authorities’ request to waive the non-observance of performance criteria. The waivers pertain to the end-December 2016 floors on total revenue collection of the central government and ceiling on the present value of gross external borrowing by public sector to the end of June this year.
“Good progress has been made on structural reforms, and it would be important that this momentum is maintained beyond the expiration of the fund-supported program,” the IMF release said.
The IMF believes that quick resolution of the country’s current political uncertainty in a timely manner consistent with the democratic process would be important to minimizing the economic and social costs of delay.
Shortly after the announcement, Tao Zhang, IMF Deputy Managing Director and Acting Chair, said, “Liberia’s economic recovery has suffered some delay, because of the lingering effects of the 2014 Ebola epidemic, low global commodity prices, and the impact of the drawdown by the United Nations Mission in Liberia (UNMIL).
“This has resulted to decline in net foreign currency inflows, which has put pressure on the exchange rate and inflation leading to a mixed program performance.”