Government Budgets Nearly US$90 Million To Clear Bank Debts
By Amos Harris
IPNEWS: The Liberian government has allocated nearly US$90 million in the upcoming fiscal year to service debts owed to commercial banks, an effort Finance and Development Planning Minister Augustine Kpehe Ngafuan says is aimed at repairing long-strained relations with the banking sector and restoring investor confidence.
Ngafuan made the disclosure over the weekend at the 60th anniversary celebration of the Liberian Bank for Development and Investment (LBDI) in Monrovia, where he acknowledged that years of unpaid obligations and fiscal slippages had weakened trust between government and financial institutions.
“Confidence between government and banks was not always there,” Ngafuan told the gathering of bankers, government officials, private sector actors and development partners.
“When you heard government years ago, you ran away, that is changing, and we are determined to meet our obligations.”
The Finance Minister said debt servicing has now become a major budget priority, with almost US$90 million earmarked specifically to settle government arrears to commercial banks.
He argued that restoring credibility with lenders is essential if banks are to resume active engagement with the public sector and expand credit to businesses.
However, the announcement comes amid broader concerns about Liberia’s fiscal space and competing demands on the national budget, including wages, infrastructure, and social services.
While Ngafuan framed the allocation as evidence of improved fiscal discipline, critics have questioned whether the government can sustain debt repayments without crowding out spending on basic public needs.
Ngafuan insisted the administration does not intend to “be a burden on the banking sector,” stressing that defaults and delayed payments in the past had discouraged banks from supporting government-related transactions and constrained private sector lending.
“We want to regain your confidence so you can do what you do best power the private sector,” he said, linking improved debt servicing to economic recovery and job creation.
The minister also pointed to ongoing collaboration with the Central Bank of Liberia (CBL), including reform efforts aimed at stabilizing the financial system and removing long-standing bottlenecks to growth.
He said unlocking those constraints would allow banks and businesses to function as “the engine of economic growth.”
In addition, Ngafuan highlighted plans to advance mobile money interoperability, describing it as a key tool for expanding financial inclusion and stimulating economic activity, particularly in underserved communities.
The LBDI anniversary event underscored the bank’s six-decade role in Liberia’s development, but it also served as a reminder of unresolved structural challenges in the economy.
While the government’s pledge to clear bank debts signals a shift toward rebuilding trust, the true test, analysts say, will lie in consistent execution of the budget and timely payments areas where past administrations have often fallen short.
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