Monrovia — As the government of Liberia sought swift ratification of the US$65 million financing agreement with the International Development Association (IDA), it faced mounting pressure from the legislature to justify the deal. Initially, the government presented the funds as essential budgetary support falling under the revenue generation category in the 2023 Budget.
However, some lawmakers expressed concern about the timing of the concession but feared that rejecting the agreement would lead to a significant shortfall of US$65 million, in addition to the already projected US$44 million budget deficit. In response to these apprehensions, certain lawmakers convinced their colleagues that refusing to ratify the financing loan agreement could have disastrous consequences for the government, potentially causing a complete collapse.
Despite the government's public statements, it has not disclosed the extensive prerequisites and conditions set forth by donors to secure the loan. FrontPageAfrica has uncovered these conditions, including the requirement to empower the Liberia Anti-Corruption Commission (LACC) with prosecutorial powers.
Granting the LACC prosecutorial authority was contingent on amending the Act that established the commission, resulting in the displacement of some Liberians from their tenure positions. Nevertheless, the government deemed this measure a necessary compromise given the pressing need for the US$65 million loan.
One of the key conditions in the financing agreement focused on improving public sector transparency and accountability. To fulfill this requirement, Liberia was obligated to enact and uphold the amended act that granted prosecutorial powers to the LACC and placed administrative aspects of asset declaration and verification under the commission's control. Additionally, the government had to ensure greater transparency in public procurement by approving and publishing Circular No. 001/fiscal year/2023, dated March 27, 2023. This directive mandated all procurement entities to submit quarterly procurement reports and publish verified and validated procurement information in a quarterly procurement compliance report.
Furthermore, under pillar #2, Liberia, through the Ministry of Finance and Development Planning, had to issue a circular adopting debt reporting guidelines that expanded the coverage of debt reporting. This included mandating the annual publication of the audited, verified, and validated stock of domestic arrears of the central government, along with a detailed breakdown of arrears by spending category and the type of economic agents owed payments. The official circular, signed by the Minister of Finance, came into effect on April 4, 2023, and was subsequently published on the Ministry of Finance and Development Planning website on April 11, 2023.
In summary, the US$65 million financing agreement was ratified amidst considerable legislative pressure and strict conditions set by international partners, ultimately aimed at enhancing transparency and accountability within Liberia's public sector.
It can be recalled that on Thursday, June 29, 2023, the Liberian Senate faced an unprecedented situation as several opposition senators defected during a crucial vote on the ratification of a US$65 million loan agreement from the International Development Association (IDA).
During the vote, sixteen (16) senators voted in favor of the passage of the loan agreement, while eight (8) senators, including Darius Dillon (LP-Montserrado County), James Biney (NPP-Mary Land County), Johnathan BoyCharles-Sogbie (ANC-River-Gee County), Nyounblee Karnga-Lawrence (LP-Grand Bassa County), Gboto Kanneh (IND-Gbapolu County), Prince Moye (UP-Bong County), Prince Johnson (MDR-Nimba County), and Jeremiah Kpan-Koung (MDR-Nimba County), voted against it.
The opposition senators expressed concerns about the loan's unprecedented nature and raised questions about its timing and procedural aspects. They argued that the passage of the loan agreement did not adhere to the standing order and violated the established rules of the legislature, which require multiple readings before passage.
However, some senators, including Conmany Wesseh (UP-River-Gee County), Francis Paye (RiverCess County), who recently joined ranks with the Unity Party, Daniel Flomo Naathn (ANC-Gbapolu County), Willington Geevon-Smith (Rivercess County), another Unity Party collaborator, and Dr. Henrique Tokah (IND-Bong County), as well as J. Milton Teahjay (UP-Sinoe County), voted in favor of the loan agreement.
This decision came just two days after these senators publicly expressed concerns about the loan's timeliness. Senator Geevon-Smith emphasized that his vote was contingent upon the Ministry of Finance submitting a written program detailing how the funds would be utilized. However, Senator Smith changed his stance a day later, stating that he now supported the loan agreement.
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Notably, Senator Conmany Wesseh presented an argument in favor of the loan agreement, much to the dismay of his colleagues. He highlighted that the financial instrument was included in the 2023 passed fiscal budget as a line item called 'extended budget support.' Wesseh cautioned that rejecting the loan agreement would mean canceling $65 million from a budget that already faces a shortfall of over $40 million. Nevertheless, rumors persist regarding potential financial inducements offered to lawmakers, but these claims have yet to be independently verified by FrontPageAfrica.
Furthermore, critics of the government have voiced disapproval of the loan, alleging that the funds may be misused as campaign money. However, the loan agreement was signed between the Government and the International Development Association on June 19, 2023, extending a credit of US$65,000,000.00 to Liberia in two installments. The repayment schedule spans from July 15, 2029, to January 15, 2035, with an interest rate of 8.33334%, culminating in a final repayment.
