On November 18, 2023, Amara Konneh, former Finance Minister and Gbarpolu senator-elect, posted that the World Bank had suspended disbursement.
Claim: “From sources in Washington, DC, the World Bank has suspended disbursement to the GoL for failure to service its loans for over 60 days. There have been no expenditure reports since July. Gloomy fiscal position! This isn’t politics!”
Full Text: The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.
Liberia became a member of the International Monetary Fund, the International Bank for Reconstruction and Development, the International Finance Corporation, and the International Development Association on March 28, 1962.
The country’s economic overview in 2022, according to the bank, expanded by 4.8% despite global headwinds from the Russian invasion of Ukraine, high global inflation, and depressed demand in advanced economies.
“The expansion was driven by mining and a relatively good agricultural harvest. Growth in the agricultural sector accelerated to 5.9%, from 3.3% in 2021, on the back of increased rice and cassava production. Industrial output grew by 10.4% in 2022 largely driven by increased gold production. Growth in services slowed to 2.8 % from 3.0% in 2021, reflecting a slowdown in construction services and hospitality.”
Liberia, Konneh’s post stated, has been suspended because the government has failed to service its loan.
The post has attracted 503 comments, 178 shares, and 1.6k reactions since we reviewed it on Facebook.
Excluding the post, there is a viral five-page PDF communication addressed to Samuel Tweah, Finance Minister of Liberia.
The communication is signed by Ousmane Diagana, vice president of Western and Central Africa.
Verification: To verify the claims, we look at who Diagana is. The Stage Media established that he worked for the World Bank and currently serves as its regional vice president for West and Central Africa at the institution.
The communication by Diagana notified Liberia of the bank’s decision to suspend withdrawals under all effective and not fully withdrawn financings, project preparation facility advances, and institutional development funds granted to or guaranteed by Liberia.
We then contacted Michael Sahr, Western and Central Africa External and Corporate Relations Officer, via email; he confirmed the circulated communication and the suspension of disbursement by the bank.
“Liberia has reached 60 days overdue on its debt repayment to the World Bank. The Bank’s ability to mobilize resources for the benefit of the country and its people depends critically on the punctual servicing of debt to the Bank. We hope that the arrears situation can be resolved promptly so that operations can resume for the benefit of the people of Liberia.
The World Bank has been a long-standing partner of Liberia and reiterates its commitment to support it to overcome the development challenges the country is enduring,” Sahr said.
TSM also contacted Samora Wolokolie, Deputy Finance Minister, who said that the government has now made payments to the bank.
“The government has now made the payment to the World Bank. The failure to make timely payments was due to a delay in executing the swift transfer for the externalization of the payment(s).”
TSM has written the bank to verify the claim by Minister Woloklie, and a subsequent fact-check will be done.
We decided to look at the World Bank’s suspension of Liberia.
Boima Kamara, a former Minister of Finance expert, told TSM that the suspension will limit Liberia’s capacity to borrow from other lenders.
“It means tighter fiscal policy with limited capacity to borrow from other lenders given default to a major multilateral institution; this is the contagion effect.”
Kamara said the incoming administration would have to renegotiate with the World Bank to review the punishment.
“In terms of repayment timing, the incoming administration will re-engage the World Bank to reach a settlement agreement, leveraging goodwill towards an incoming administration that they will be more sympathetic towards because of the caliber of people on the new team leading debt negotiation.”
Conclusion: With the research done and the response from the World Bank, it is a fact that Liberia is suspended because the country defaulted on its loans for over 60 days. On the report from the July submission to the bank, Sahr declined to respond to the claim by Konneh.