Monrovia – Finance and Development Planning Minister Augustine Ngafuan has raised concerns over Liberia’s escalating debt crisis, revealing that the country’s total debt stock has surpassed $2.5 billion, with domestic debt alone exceeding $1 billion.
By Jaheim T. Tumu | Email: [email protected]
Ngafuan attributed the mounting debt to excessive borrowing under the Weah-Taylor administration, which, he said, relied heavily on loans—including from commercial banks—to fund government operations. This led to a growing domestic debt burden as unpaid obligations to contractors, service providers, and small businesses piled up.
“The debt stock of Liberia is over $2.5 billion—both external and domestic. Domestic debt alone is above $1 billion. The Liberian government owes a lot,” Ngafuan said while speaking on OK FM.
The debt stock of Liberia is upward of US$2.5 billion – extended and domestic is US$2.5 billion. Domestic debt is above a billion United States Dollars. Liberian government owes a lot. One of the realities that I faced when I became the Ministry of Finance was distrust in government. The government has taken loans overtime, even from the commercial banks to service government’s activities. The government has contracted services, road contractors, even small businesses, the government will routinely not pay and everything will be dumped to domestic debt.
Augustine Kpehe Ngafuan, Minister of Finance & Development Planning
He noted that previous administrations routinely defaulted on payments, leading to a widespread trust deficit between the government and creditors. This, he said, made it difficult for vendors and contractors to engage in business with the state.
Efforts to Rebuild Trust and Improve Financial Credibility
Ngafuan disclosed that $80 million was borrowed from the Central Bank of Liberia (CBL) to pay civil servants’ salaries. However, he said his administration is working to restore credibility by ensuring that financial commitments are honored.
“Commercial banks are beginning to trust the government again, and we are making payments on interest owed. Vendors and contractors who were previously reluctant to do business with the government are now engaging with us,” he said.
To further streamline payments and address fraudulent claims, he revealed that the General Auditing Commission (GAC) has been verifying debts owed to vendors. Through this process, the GAC has uncovered bogus claims amounting to over $400 million.
“We are reversing the situation, and confidence is returning. Now, vendors must deliver before the government makes payments,” Ngafuan stated.
Economic Outlook and Plans for Growth
Despite the challenges, the minister expressed optimism about Liberia’s economic outlook, projecting a 6% growth rate for the year. He emphasized that the government is committed to expanding the tax base and improving revenue mobilization to reduce dependency on loans.
“Our goal is to gradually reduce reliance on aid while enhancing domestic resource mobilization. We are looking at new revenue sources, including better financial returns from the extractive sector,” he noted.
Ngafuan disclosed that Liberia has been selected by the World Bank and the African Development Bank as one of 12 African countries to develop an energy compact. Under this initiative, the government aims to increase electricity access from the current 30% to between 75% and 80% by 2030.
He announced plans for a new hydroelectric facility, St. Paul Two, and the expansion of solar energy generation. The total investment required for these projects is estimated at $1.3 billion, with commitments already secured for funding.
“High electricity costs remain a major constraint to growth and job creation in Liberia. Making power more accessible and affordable will ease financial burdens on businesses, particularly small enterprises struggling with high operational costs,” he explained.
Infrastructure Development and Business Support
Ngafuan underscored the importance of infrastructure development, particularly road improvements, to enhance economic activity.
“Better roads mean improved connectivity, allowing farmers to transport goods efficiently and reducing losses due to spoilage,” he said.
The minister also highlighted ongoing engagements with stakeholders at the National Port Authority to remove barriers to business operations. Measures under consideration include extending port operating hours and enabling online transactions to improve efficiency.
“Enhancing efficiency will help businesses thrive and add value to locally produced goods. We are also providing incentives to encourage domestic production, which will create jobs and positively impact the trade balance,” he added.
Ngafuan concluded by reaffirming the government’s commitment to stabilizing the economy and rebuilding trust with creditors and investors.
