Monrovia — The Liberian government and the World Bank appear to be at odds after the Bank accused the country of defaulting on debt obligations and mismanaging funds tied to a key fisheries project. The Ministry of Finance and Development Planning (MFDP) and the National Fisheries and Aquaculture Authority (NaFAA) have refuted the claims, insinuating that Bank misinformed the press on the debt default, however, the Ministry did not clarify when the debt payment was made.
The Liberian Investigator reported last Friday that the World Bank suspended Liberia's access to critical funding on August 15, 2024, due to the government's failure to meet its debt obligations. The suspension, The Liberian Investigator gathered, affects several projects and funding channels, including active credits, Project Preparation Facility advances, and Institutional Development Fund grants. The suspension was triggered after Liberia reportedly failed to settle payments within the required 60-day window.
"The World Bank looks forward to the Republic of Liberia's payment of all overdue amounts and remains committed to supporting Liberia to ensure the effective implementation of all the projects in its portfolio, for the benefit of the Liberian people," said Michael Sahr, the World Bank's External Affairs Officer, confirming the suspension to The Liberian Investigator on August 21.
Ministry of Finance Refutes Default Allegations
In response to the World Bank's claims reported by The Liberian Investigator, the Ministry of Finance and Development Planning (MFDP) categorically denied that Liberia defaulted on its debt obligations. According to the Ministry, the government has made payments totaling approximately $44.3 million under President Joseph Nyuma Boakai's administration since January 2024. This amount includes $23 million in arrears from 2023 and $21 million in scheduled repayments for 2024.
"The payments to the IDA so far stand at $12.19 million," the Ministry's statement noted. "This announcement comes in the wake of some recent media reports suggesting that Liberia was suspended from the World Bank due to overdue loans."
The Ministry further explained that the confusion stems from reduced external transfer dates at the Central Bank of Liberia (CBL), a legacy issue inherited from the previous administration. According to the MFDP, the Federal Reserve Bank of New York, which handles international payments for the CBL, reduced the weekly transfer period from five days to two days due to irregular transactions prior to the transition of power in January 2024. The Ministry clarified that this reduction has caused payment delays that have been wrongly interpreted as defaults.
"This administration inherited a debt portfolio of $2.6 billion, including $1.5 billion accumulated under the CDC government in six years," the statement continued. "Despite these challenges, the Ministry of Finance remains committed to maintaining the government's credibility and strengthening relationships with development partners."
The Ministry argued that the Federal Reserve Bank of New York, which handles international payments for the Central Bank of Liberia (CBL), reduced the weekly transfer period from five days to two days due to irregular transactions that occurred before the transition of power in January 2024. The World Bank, however, contended that the overdue debt had exceeded the 60-day grace period window, leading to the suspension.
Fund Reallocation in Fisheries Project
Another controversy with the World Bank involves the Liberia Sustainable Management of Fisheries Project (LSMFP), managed by the National Fisheries and Aquaculture Authority (NaFAA). On July 31, 2024, World Bank Country Manager Georgia A. Wallen issued a strongly worded letter to NaFAA Director General Emma Metieh Glassco, highlighting "factual inaccuracies" and "misrepresentations" in NaFAA's Project Progress Report.
The World Bank specifically disputed NaFAA's claim that $3 million originally allocated for the construction of NaFAA's headquarters was reallocated to purchase vehicles and other items, allegedly with the World Bank's approval. "The document contains factual inaccuracies and weighty allegations that fundamentally mischaracterize the role, priorities, and actions of the World Bank," Wallen's letter stated. "The report also misrepresents the nature of the World Bank's working relationship with the LSMFP Project Implementation Unit (PIU) and refers to reallocations under the Project for which no formal requests have been received."
The letter further clarified that reallocation of project funds must undergo formal processes, including approval by the World Bank's Board of Directors. "World Bank policies and legal agreements are meant to ensure that project funds are used for the purposes intended," Wallen emphasized.
NaFAA Defends Project Management
However, Madam Glassco defended NaFAA's management of the project, insisting that all reallocations were conducted with full transparency and approval from the World Bank. "There was no disbursement done without the explicit 'no objection' from the World Bank," Glassco asserted. "We possess comprehensive documentation to substantiate these processes, and these will be made available to the public and the media."
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While NaFAA displayed communications seeking the restructuring of the project funds to the World Bank, its dossier of documents did not include any showing formal approval from the World Bank.
According to NaFAA, $831,000 of the reallocated funds was used to procure six vehicles, two motorbikes, public awareness billboards, and electric generators--resources that Glassco argued were essential for the project's success. "These expenditures were necessary for the effective implementation of the project and were sanctioned by the World Bank," she said.
Glassco also pushed back against allegations that the vehicles were used for political purposes, dismissing such claims as baseless and politically motivated. "This orchestrated misinformation campaign is a direct attack on the progress and transparency NaFAA has maintained under my leadership," she declared, pointing to former employees and political adversaries as being behind the spread of these "falsehoods."
Meanwhile, the World Bank has announced that it will conduct a Mid-Term Review (MTR) of the LSMFP in October 2024. This review will focus on assessing the project's progress, particularly regarding beneficiary outcomes and value for money. The MTR will also revisit unresolved issues from the previous Supervision Mission and propose recommendations to improve project performance.
