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Liberia’s Debt Relief Party
July 2, 2010
This week, Liberians celebrated in the streets – faces painted, drums blaring, and dancing with abandon. They’re not rejoicing over some recent triumph by the Liberian soccer team or a local festival. The streets of Monrovia were overflowing because of debt relief. That’s right, debt relief. On Tuesday, Liberia secured nearly $5 billion in irrevocable debt relief from the World Bank, IMF, African Development Bank, and bilateral creditors. It’s a massive sum – the equivalent of roughly $1200 for every man, woman, and child in Liberia. As President Ellen Johnson Sirleaf stated, “today, ladies and gentlemen, is a day for us, as Liberians, to celebrate.” And celebrate they did. And so should we.
Beyond celebrating Liberia’s monumental achievement, we also should take a step back and examine just how they did it. On Wednesday, CGD was privileged to host two of Liberia’s leading stars in the debt relief drama – Finance Minister Augustine Ngafuan and Economy & Planning Minister Amara Konneh – along with a member of the IMF’s senior management, John Lipsky. Their insightful remarks kept coming back to one central theme – the overriding importance of strong, responsible, and persistent political leadership. President Sirleaf and her senior team knew the road would be long and rough. But, they refused to give up and overcame each successive wave of seemingly insurmountable challenges. Take two quick examples:
- When the Sirleaf Administration assumed office in January 2006, it didn’t have a single computer, chair, desk, or paper clip. The previous transitional government stole everything – bolted down or not. And many civil servants hadn’t been paid in months – if not years. Despite this, they found a way to mobilize enough expertise to secure an agreement the next year that cleared billions of dollars of loan arrears to World Bank, IMF, and other creditors.
- Also, the Sirleaf Administration pushed through numerous controversial pieces of legislation in order to secure debt relief – such as establishing a new Anti-Corruption Commission – despite controlling only 10 percent of the Liberian Congress. A truly tremendous display of courage and consensus building.
The path ahead for Liberia will remain uneven. It continues to face massive challenges, such as high unemployment rates and poor infrastructure. However, if the government remains determined and disciplined, they have good odds of successfully tackling these challenges one by one – just as they did with debt relief.
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4 Responses to “Liberia’s Debt Relief Party”
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July 7th, 2010 at 3:05 pm
Congratulations to President Sirleaf and her government officials. They have shown that it can be done: Africa can get out of debt and have a bright future as a full partner with the other countries of the world.
July 7th, 2010 at 4:49 pm
Well done! This is a momentous achievement by the Liberian government and a process that has been achieved in record time, especially considering where this government started from. I am once again encouraged and impressed by the tenacity with which President Sirleaf and her officials pursued this process. Again I say, Well done
July 7th, 2010 at 5:06 pm
How nice for Liberia! But did it have to cut a deal about how it would treat the foreign mining and plantation industries in the country? After all, Canada delayed an $8 billion debt relief deal for the Democratic Republic of Congo. Canada seems to have been worried about the DRC’s cancellation of some mining contracts. But according to Mineweb.com (”Canada blocks debt relief as Congo marks jubilee”) a World Bank decision on debt relief was postponed at Canada’s request (the IMF approved the request).
July 14th, 2010 at 5:05 pm
Alice:
There was no linkage between terms of foreign direct investments and the provision of debt relief. That said, independently the Liberian authorities did renegotiate rubber and iron ore concessions in their favor.