For the record, the World Bank has, over the years, played a key role in national development efforts. It has provided funding for public infrastructure projects such as road building and construction, budgetary support, etc.
But as it turns out, all of this has come at a cost which many consider as a never-ending debt trap given the OUTRAGEOUS debt servicing requirements demanded by this otherwise development partner under strict conditions prescribed by the International Monetary Fund, (IMF).
Foremost amongst those requirements is a drastic cut in social spending, especially on health, education and social protection in favor of increased public spending on infrastructure.
The Public Financial Management law (PFM) requires strict adherence to transparency and accountability.
But this law has been repeatedly violated by officials in charge of managing public resources.
US State Department Human Rights Reports have consistently flagged this issue pointing out that officials continue to violate the PFM law but yet the World Bank has apparently remained impervious or consistently feigned indifference to violations of transparency requirements.
In the truest sense, the World Bank encourages and endorses the corrupt behavior of public service officials, never mind its rhetorical professions of strict adherence to well spelt out principles of transparency and accountability.
Says the US State Department Human Rights report:
“Information on debt obligations, with the exception of state-owned enterprise debt, was widely and easily accessible to the general public, including online. Foreign assistance receipts, largely project-based, were neither adequately captured in the budget nor subject to the same audit and domestic oversight as other budget items.
“Significant deviations between projected and actual revenues during the review period undercut the reliability of budget information. The supreme audit institution did not meet international standards of independence and did not make its audit reports publicly available within a reasonable period of time.
“The criteria and procedures for awarding natural resource extraction licenses and contracts were outlined in law, although there have been reports of corruption and inconsistent application of regulations in practice. Basic information on some, but not all, natural resource extraction awards was publicly available. “
In view of the above stated observations of the US State Department report, the question is, how come the World Bank/IMF continues to ignore such red flags?
Instead, the institution continues to provide monetary assistance without demanding that state officials in charge of managing public resources strictly adhere to Liberia’s Public Financial Management Law(s) as a precondition for granting loans.
In our search for answers, this newspaper undertook a review of the country’s loan portfolios.
Liberia’s debt portfolio consists of debts owed to bilateral and external creditors. Prior to President Sirleaf’s ascension to office in 2006, the country’s total debt stood at US$4.7 billion.
The total sum of money (principal) received from external sources, including the World Bank, as stated in the 2007 report of the Central Bank of Liberia (CBL), amounted to US$223 million. Interest paid on the principal (US$223 million) totaled US$1.1 billion.
On the other hand, the report shows that money received from bilateral sources, including local commercial banks, amounted to US$687 million. Interest payment on this debt totaled US$314 million.
As can be seen, the interest payments in both cases are very high, repugnant to say the least.
Thus, one can readily see why the World Bank has consistently feigned indifference to public concerns about transparency and accountability. This suggests that public officials are at liberty to steal public resources and divert same to personal bank accounts as long as such exploitative interest payments continue to flow.
In other words, it is profit above people at all costs, no matter how long or how loudly the US State Department hisses over concerns that public officials are acting in direct contravention of the PFM laws of Liberia.
Thus, one can clearly see why the country continues to remain in an unending cycle of rising debt and deepening poverty.
Just imagine how many hospitals, schools, etc. can be built from such an amount of US$1.1 billion that this poor nation has paid as interest on loans, most of which have gone into the private pockets of state officials.
And this is the same World Bank that serves as principal financial advisor to the Government of Liberia.
Now we can begin to understand the rationale of debt forgiveness, which leads many into the false belief that debt forgiveness is an act of charity by creditor institutions.
Such debt forgiveness is granted under strict arrangements imposed by the IMF, requiring the country to make deep cuts in social spending (health, education and social safety nets) in favor of capital projects (infrastructure), an area in which kickbacks are high.
Look at the road construction projects undertaken by the Sirleaf government, for example, most of which were/are substandard and are today falling into disrepair. The Caldwell Road, Monbo Town Dorleh-La (Douala) and other streets in Monrovia. Many of them were sourced to fly by-night Lebanese contractors.
The project to build the road from ELWA Junction to the Roberts International Airport was awarded to another fly by-night Chinese-owned company which, prior to the award, was engaged in selling building materials but with no proven history of road construction.
But the World Bank is not interested in all this. What matters most is the exacting and exploitative interest payments (debt servicing, they call it).
In fairness, this in essence was President Sirleaf’s bequest to the George Weah government. By the time she left office national debt had again risen to about US$1 billion, with US$16 billion in direct foreign investment but with little or nothing to show.
This nation must never forget that in 1980, after a bogus and sham trial, 17 public officials were publicly executed on charges of rampant corruption. If it happened then, could it possibly happen again? When history repeats itself, it is said, it becomes a farce.
President Weah is entreated to do all in his power to curtail runaway corruption, especially the lavish and ostentatious display of ill-gotten wealth by his officials. He should be, by now, aware of the rising tide of public resentment against such practices. If he is not aware, then when will he become aware -- in 2023?