afrol News - Liberia's debt cancellation approved

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Liberia
Politics | Economy - Development | Human rights
Liberia's debt cancellation approved

afrol News, 13 November - After hues and cries, the International Monetary Fund (IMF) has finally agreed to cancel Liberia's outstanding debts.

After securing sufficient funding and pledge [US $842 million] from donor nations, the IMF promised to start the cancellation process as soon as the pledges have been honoured.

But the agency's Managing Director, Dominique Strauss-Kahn, said Liberia's comprehensive debt relief took a "critical step".

The IMF debt relief helps countries to embark on a three-year growth programme geared towards reducing poverty, among others.

Liberian President, Ellen Johnson-Sirleaf, became so concerned that she flew to Washington, arguing that her country had met both political and economic requirements to enjoy the debt cancellation.

The World Bank President, Robert Zoellick, had praised Mrs Johnson-Sirleaf for doing "a tremendous job in a difficult situation and this breakthrough will help all of us to offer her and Liberia more support."

A consortium of organisations [Jubilee USA Network, Africa Action, and European Network on Debt & Development] scolded the IMF for its failure to reach an agreement to clear the arrears owed by Liberia, a necessary step that allows the country to access life-saving debt cancellation.

“The IMF and its main shareholders ought to be ashamed of their broken promises to Liberia,” said Emira Woods, Board Chair of Africa Action and Co-director of Foreign Policy in Focus, arguing that the country has met all of the onerous requirements demanded by the IMF to access debt cancellation, and yet Liberia has gotten nothing in return.

Liberia’s debt to the IMF, the World Bank, and other creditors totals more than $4.5 billion.

However, much of this debt is “odious or illegitimate” in nature, having been run up by the brutal regime of Samuel Doe, with no benefit to the people.

During years of civil war, Liberia failed to make its scheduled payments, resulting in huge arrears which the IMF insists must be cleared before the West African country entered the debt cancellation process.