The way I see Liberia

There are major developments been undertaken by the Ellen Johnson Sirleaf administration in Liberia in all phases of nation building and human advancement but they are not visible to the common man on the street. And if the common man on the street cannot see them, feel them, taste them and touch them, then the vicious wheel of poverty will keep spinning around and around.

The core reason why the four senses have not realized the developments in Liberia is the debt burden of a little over 4.5 billion dollars that overshadowed the growth of the country for many years. Loans were taken and loans must be paid. If they are not paid, interest and penalties are levied and arrears are accumulated and before you know it, you become a high-risk borrower and Liberia enjoys the dubious pleasure of ranking top in that category.

Let’s do the math:

Exports ~ +/- $115 million
Imports ~ +/- $275 million
Total external debt US +/- $4.6 billion
Life expectancy ~ +/- 40 years
Population: ~ +/- 3.2 million

Liberia’s debt burden will be handled down continuously to the third generation of any present generation. What a sad state of affair for the children yet unborn. Liberia needs help and the help that is not helpful is the help of talk without substance. Liberia deserves the help and must demand the help now if she is to succeed in achieving the eight Millennium Development Goals. Our story is not hidden. It was played out globally for all to see and everyone knows about our plight. It is time that our friends come to our help and take us out of our slump.

The International Monetary Fund and the World Bank are squeezing Liberia to cough out the almost two billion US$ she owes in back payments, accumulated interest and penalties, which seem to be an above face stance, since the funding bodies played blind eyes to the repayment efforts or lack of, and kept providing illegitimate loans masterminded by previous rogue leaders, while at the same time playing lip services to well meaning nations that were calling for debt relief or cancellation of Liberia’s debt.

Due to the cry of the present government, the World Bank, the International Monetary Fund and the African Development Bank are now painfully talking shop and working on modalities to relieve Liberia of its bilateral and multilateral debts.

After the successful election, which ushered in the first female African leader, the UN and the funding bodies have not fully lifted all of the sanctions that were levied on Liberia, which has suffocated the country from accruing needed exported funds to meet her commitments to her creditors.

This is the time for our friends to show their support and come to Liberia’s aid and agree on a financial plan to alleviate the country's foreign debt and not stray away due to donor fatigue. We know you have been there for us and we plea that you come to our help now. If there ever was the time, now is the time.

It is no secret that an agreement on writing off Liberia’s debts has been delayed by power struggle amongst member countries on how the deal should be financed. One sticking point in this whole saga is that the IMF has been unable to approve any loan program for Liberia until the outstanding 1.5 billion in arrears be repaid.

We are all aware that the major creditors have all pledged to forgive Liberia’s debts, but the ball was stuck in the IMF’s court, where their Board had been debating, over a year now, how to share the costs to cancel this enormous debt of a little over $4.6 billion. There is a likelihood that donors could divert development funding for Liberia to pay off the 1.5 billion dollar arrears to the IMF, World Bank and the African Development Fund. That is a scary thought.

It is widely believed that Liberia’s total debt may be cancelled if she enters the Heavily Indebted Poor Countries initiative, a debt relief program administered by the World Bank and the IMF. For that to happen, Liberia must first settle her outstanding arrears to the International Monetary Fund, the World Bank, and the African Development Fund.

Three close friends of Liberia, the UK, Germany and the US, have offered to waived the total debt owed them under the context of the Heavily Indebted Poor Countries Initiative; however, for the Heavily Indebted Poor Countries Initiative to kick in, Liberia must agree to undergo significant economic and social reforms, and also write a Poverty Reduction Strategy Paper endorsed by all segments of Liberian society.

There is a revolving door within financial institutions that could convey perturbing apprehension when considering a case for debt relief; that is, monies earmarked to pay off multilateral debts on behalf of Liberia could be funneled out of existing donor funding pledged towards Liberia’s development.

From where I sit, as I apply risk management theory to Liberia’s fiscal nightmare, two terms come to light in my mind, enlightened caution and enlightened gamble. Let us as a people make all efforts to help ourselves and not rely on the extended powers to come to our aid to correct our own mistakes, when we are truly responsible for our own present state of affairs. We have the land and we have the people. Let us farm our land and feed ourselves. Most of the foods we eat are imported and that take up a huge chunk of the country’s import burden. The government must stay away from luxury expenditures. Everyone should lend a hand and be part of the solution and not rely on the government for everything. What assurance do we have to indicate that the cancellation of the debt will really make any change for Liberia and for Liberians? What assurance do we have to suggest that Liberia will not find herself in similar debt situation in the next fifteen? In risk management, we call this constructive insubordination, formulating and answering the right questions. We need a new mindset, a new way of thinking and a new way of working. Let us all hope for the best and may God bless the Republic.