IPNews-Monrovia: The Board of Directors of the African Export-Import Bank, also referred to as AFREXIMBANK, has approved more than US$52 million financing facility for commercial banks in Liberia.

Upon assuming office, President George Manneh Weah instructed Finance Minister Samuel Tweah to issue a bond honoring the Liberian government’s commitment to a legacy US$65 million debt owed commercial banks by the previous government.

The commercial banks had complained to the new administration that the debt posed serious liquidity challenges for them, and appealed to the incoming government to recognize it through a bond issuance.

The bond has now been discounted 80% by AFREXIMBANK and the money should provide critical relief for the banking sector.

The debt represents infrastructure loans from 10 years ago that should have been long repaid by the previous administration.

The approval of this discounted facility for seven banks (the Liberian Bank for Development and Investment, International Bank, Ecobank, United Bank for Africa, Guaranty Trust Bank, Afriland First Bank and GN Bank) by AFREXIMBANK establishes confidence in the Liberian government’s ability to pay and is also critical for future liquidity injections via the local banks for medium to long-term economic growth.

Several commercial banks in Liberia have faced liquidity challenges in recent times, and this approval will help ease the pressure, said a statement issued Thursday by the Ministry of Information.

The Government of Liberia will service the bond over the next seven years through the national budget, beginning with the current one, the statement disclosed.

It said as part of this commitment, the government doubled the budget for debt servicing from US$30 million in FY2018/19 budget to about $61 million in FY 2019/20 budget.

The Government is now working with AFREXIMBANK to inject the liquidity into the Liberian economy. (courtesy of LINA)