IMF funds redirected to ease Liberia debt

WASHINGTON – The United States said on Wednesday it had identified US$150 million of US money in the International Monetary Fund that could be redirected toward clearing Liberia’s arrears to the global lender.

Liberian Finance Minister Antoinette Sayeh said the US commitment meant a deal to settle Liberia’s US$1,5 billion outstanding debt to international financial institutions was closer. The West African country would still owe another US$2,2 billion to foreigners.IMF shareholders have been unable to agree on ways to clear the US$795 million Liberia owes them.”We think we’re getting there,” Liberia’s Finance Minister Antoinette Sayeh told reporters at the end of the two-day conference in which Liberian President Ellen Johnson-Sirleaf appealed to large donor nations to cancel all of the debt.Sayeh said Liberia had received a clear signal during the conference that donors “intend to be engaged with us for the long haul as long as we continue to do the right things.”US Treasury Secretary Henry Paulson said in a statement, after meeting Johnson-Sirleaf on Tuesday, that he will work with US lawmakers to authorise the funding.Paulson would also request Congress authorise up to US$35 million in additional debt reduction funds under a bill now under consideration.Clay Lowery, US Treasury assistant secretary for international affairs, said the additional funds were requested to help persuade other IMF member countries to clear Liberia’s debt by redirecting funds they have contributed to an IMF special contingency accounts.This requires a special vote to release the funds and individual redirection actions by member countries.”They could just take the money and run,” Lowery said of IMF members.”Obviously we want them to use this money, which is basically unutilised money, to pay off Liberia’s debt problem.”He said, however, that it was still unclear how large a gap there would remain if all of the special contingency funds were used.He said he hoped the US action “would show leadership” and persuade other countries to contribute new funds to clear Liberia’s debts.Johnson-Sirleaf, Africa’s first woman president, is seeking the cancellation of Liberia’s US$3,7 billion foreign debt, half of which is accrued interest.More than US$1,5 billion of the debt is in arrears to the IMF, World Bank and African Development Bank.The United States, Liberia’s biggest creditor, has already pledged it will write off US$391 million under the Heavily Indebted Poor Countries (HIPC) initiative, a global debt relief scheme for poor countries managed by the IMF and World Bank.Liberia cannot qualify for HIPC until its arrears to the institutions are cleared.Paulson praised Johnson-Sirleaf’s economic and political reforms in her first year as president of a country devastated by a 14-year civil war, which ended in 2003.He said the United States had already set aside US$15 million to help clear Liberia’s arrears to the African Development Bank, which was previously authorised.Nampa-ReutersThe West African country would still owe another US$2,2 billion to foreigners.IMF shareholders have been unable to agree on ways to clear the US$795 million Liberia owes them.”We think we’re getting there,” Liberia’s Finance Minister Antoinette Sayeh told reporters at the end of the two-day conference in which Liberian President Ellen Johnson-Sirleaf appealed to large donor nations to cancel all of the debt.Sayeh said Liberia had received a clear signal during the conference that donors “intend to be engaged with us for the long haul as long as we continue to do the right things.”US Treasury Secretary Henry Paulson said in a statement, after meeting Johnson-Sirleaf on Tuesday, that he will work with US lawmakers to authorise the funding.Paulson would also request Congress authorise up to US$35 million in additional debt reduction funds under a bill now under consideration.Clay Lowery, US Treasury assistant secretary for international affairs, said the additional funds were requested to help persuade other IMF member countries to clear Liberia’s debt by redirecting funds they have contributed to an IMF special contingency accounts.This requires a special vote to release the funds and individual redirection actions by member countries.”They could just take the money and run,” Lowery said of IMF members.”Obviously we want them to use this money, which is basically unutilised money, to pay off Liberia’s debt problem.”He said, however, that it was still unclear how large a gap there would remain if all of the special contingency funds were used.He said he hoped the US action “would show leadership” and persuade other countries to contribute new funds to clear Liberia’s debts.Johnson-Sirleaf, Africa’s first woman president, is seeking the cancellation of Liberia’s US$3,7 billion foreign debt, half of which is accrued interest.More than US$1,5 billion of the debt is in arrears to the IMF, World Bank and African Development Bank.The United States, Liberia’s biggest creditor, has already pledged it will write off US$391 million under the Heavily Indebted Poor Countries (HIPC) initiative, a global debt relief scheme for poor countries managed by the IMF and World Bank.Liberia cannot qualify for HIPC until its arrears to the institutions are cleared.Paulson praised Johnson-Sirleaf’s economic and political reforms in her first year as president of a country devastated by a 14-year civil war, which ended in 2003.He said the United States had already set aside US$15 million to help clear Liberia’s arrears to the African Development Bank, which was previously authorised.Nampa-Reuters