-Says Annual Debt Report
By our Staff Writer
The Liberian government is not only broke, but the country is in debt to its throat, with total borrowing amounting to US$1,460.41 billion by end of June 2017, according to the Annual Debt Report of 2016/2017 of the Finance and Development Planning Ministry.
The Liberian Government defines total borrowing as disbursed outstanding debt and undisbursed signed and ratified loans.
According to this report, the share of undisbursed loans accounted for US$611.42 million and outstanding disbursed loans including post HIPC disbursed loans and restructured debt amounted to US$848.99 million.
The debt stock includes pre-HIPC restructured debt of US$331.41 million and post-HIPC debt of US$517.58 million.
HIPC is the Heavily Indebted Poor Countries Initiative.
In the Recast budget for Fiscal Year 2017/2018 pass several days ago by lawmakers, US$16.498 million was originally appropriated for servicing the country’s foreign debt. But US$15.068 is now proposed for payment in the recast budget.
The amount of US$9.434 million was originally appropriated in the 2017/2018 budget to service domestic liabilities, but it is sliced to US$3,846 million in the recast budget.
Liberia’s total debt stock includes external debt and domestic debt.
And of the total US$848.9 million debt stock, the share of external debt accounted for US$581.91 million, while domestic debt amounted to US$267.08 million at end of the fiscal year 2016/2017.
The Annual Debt Report of 2016/2017 said domestic debt comprises of Central Bank of Liberia (CBL) loans, Commercial Banks loans and other court debt, while external debt includes multilateral and bilateral debt.
According to the report, at end June 2016, the outstanding public debt increased by 16.07 percent.
This places Liberia’s debt-to-GDP ratio at about 40 percent, which is 20 percent below the ceiling.
External debt service amounted to US$2.81million at the end of June 2017 compared to US$0.53million at end of the third quarter, which is an increase of 431.09 percent.
The recast budget submitted to the 54th Legislature by the Executive Mansion is US$536,200,130 million from US$563,563,432 originally appropriated for this budget year which ends on June 30.
The CDC-led government of President George Weah is just in its second month in office, having taken over the reign of power from former President Ellen Johnson Sirleaf on January 22, 2018.
Liberia, which extensively rely on the extractive industry such as iron ore, gold, diamond, has experience a serious drop in its foreign exchange earning in recent years due to the fall in commodity prices.