President Joseph Nyuma Boakai, Sr. formally opened the National Conference on the Resolution of Non-Performing Loans on Tuesday at the EJS Ministerial Complex, telling bankers, regulators, lawmakers, judges, and development partners that Liberia's mounting bad-debt problem is ultimately "about people", farmers seeking financing, young entrepreneurs without access to capital, and depositors whose savings must be protected.
The three-day conference, convened by the Central Bank of Liberia (CBL) under the theme "Resolving Non-Performing Loans to Unlock Access to Finance for Private Sector Growth and Job Creation," brings together the country's financial and legal institutions to confront a debt crisis that officials say has quietly strangled credit across the economy for years.
According to figures presented at the conference, non-performing loans (NPLs) made up roughly 19 percent of total bank loans at the end of 2024, well above prudential benchmarks before declining to between 12.5 and 12.9 percent by the end of 2025, depending on the measure cited. Officials cautioned that much of that decline reflects write-offs and loan restructuring rather than actual cash recovery, meaning the underlying problem has not disappeared so much as been reclassified.
Keep up with the latest headlines on WhatsApp | LinkedIn
The consequences extend well beyond bank balance sheets. Domestic credit to the private sector stands at only about 15 percent of GDP, and loan-to-deposit ratios hover near 35 percent, reflecting how reluctant banks have become to lend. Nearly 40 percent of Liberian businesses surveyed recently identified lack of access to finance as their single biggest obstacle to growth, up from roughly 30 percent a decade ago.
In his keynote, President Boakai argued that resolving the NPL crisis is inseparable from his administration's broader ARREST Agenda for Inclusive Development, which aims to expand jobs, strengthen agriculture, and grow Liberian businesses. None of that is achievable, he said, without "a strong, healthy financial system prepared to finance productive economic activity."
The President placed responsibility on both sides of the lending relationship. Banks, he said, must lend responsibly and properly assess borrowers, but borrowers must also treat loans as obligations that must be repaid. "Contracts must mean something. Collateral must mean something," he told the audience, adding that when disputes arise, Liberia's legal and judicial institutions must be able to resolve them "fairly and efficiently" to build confidence in the financial system.
He was candid about the scale of the underlying weaknesses, pointing to gaps in credit assessment and risk management, weak collateral enforcement, slow judicial processes, and a broader repayment culture that needs strengthening. But he insisted that no single institution -- not the Central Bank, not commercial banks, not the courts, not borrowers -- can fix the problem alone.
Looking ahead, Boakai called for stronger credit reporting systems, improved land administration and collateral registration, expanded and responsibly regulated digital financial services, and a modernized insolvency framework, warning that "the financial world is changing rapidly, and Liberia cannot afford to remain behind."
His most pointed message, however, was reserved for the conference's aftermath. Noting that Liberia "has had many conferences" and "produced many good reports and recommendations," Boakai told participants that success would be measured not by the speeches delivered but by what happens after everyone leaves the room. He urged delegates to leave with concrete commitments, assigned responsibilities, realistic timelines, and a mechanism to track implementation, declaring the conference officially open on behalf of what he framed as a shared national effort to move "from discussion to action."
Finance and Development Planning Minister Augustine Kpehe Ngafuan used his remarks to turn the conversation toward the government's own role in the NPL cycle. He argued that when the government delays payment to contractors, suppliers, or vendors -- many of whom rely on bank credit to operate -- the ripple effects can travel directly onto a bank's books as a non-performing loan. "The chain is clear," he said, describing how an unpaid government contract can leave a vendor unable to service a bank loan, employees unpaid, and tax obligations unmet.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Ngafuan said restoring the government's own credibility as a borrower and payer has become a policy priority for the Boakai administration, telling the audience that vendors doing legitimate business with the government should expect their obligations to be honored. He cited this year's national budget, which allocates close to $235 million for debt service, including more than $90 million for commercial debt, as evidence of the government's intent to model the repayment discipline it is asking of the broader economy extending that commitment to Liberia's external creditors, including the World Bank.
The minister outlined four broad areas he said require sustained action going forward, beginning with strengthening the wider economic environment for private sector-led growth. He argued that a healthy credit system ultimately depends on a healthy economy, one where inflation is contained, the government pays its bills on time, infrastructure improves, and investor confidence rises.
