World Bank Suspends Liberia’s Loan Access Over Debt Servicing Failure

Liberia has suffered a major blow as the World Bank decides to revoke the nation’s access to “unwithdrawn loans” because the George Weah administration had not made its debt payments. The decision was made in response to the administration’s failure to repay loans that had already been disbursed, according to a letter from the vice president of the World Bank’s Western and Central Africa area, Ousmane Diagana.

The suspension, effective as of November 15, 2023, includes withholding the right to further withdraw from disbursing loans and specific trust fund grants and loans.

“With utmost regret, we inform you that, pursuant to the General Conditions or Standard Conditions (as the case may be and as defined in the agreement providing for the respective Disbursing Loan) applicable to each of the Disbursing Loans, the Bank suspends as of 12:01 am., Washington, D.C. time November 15, 2023 : (a) the right of the respective borrower(s) thereof to make any further withdrawal of unwithdrawn amounts under the Disbursing Loans; and (b) the right of the respective recipient(s) thereof to make any further withdrawal of unwithdrawn amounts under the following Trust Fund grants and loans(“Disbursing TF Grants/Loans”) (the Disbursing Loans and the Disbursing TF Grants/Loans, collectively, the “Suspended Loans”)…” the bank.

Exemptions exist for withdrawal applications submitted within 90 days after the suspension date, covering payments to suppliers and contractors for services carried out within 60 days post-suspension.

During this period, the bank will not make disbursements to the designated accounts of the suspended loans, with consideration for direct payments or reimbursements only after confirming that account balances have been fully utilised for exempted item expenditures.

The World Bank stated its regret for the necessity of this action, linking the suspension to the settlement of all outstanding payments. A swift resolution is hoped for to resume withdrawals and support crucial operations in Liberia.