04/22/2009

News / Treasury Congratulates Liberia on the Buy Back of Outstanding Commercial Debt

Washington, DC--Treasury Secretary Timothy F. Geithner welcomes the Government of Liberia's successful conclusion this week of its negotiations with private creditors to eliminate approximately $1.2 billion in outstanding private sector debt. This deal was made possible with financial support from the United States and other donors.

"The G20 leaders expressed in London earlier this month that prosperity and growth must be shared among all countries. With a relatively modest investment, the United States is supporting Liberia's efforts to become a self-sufficient and peaceful member of the global community," said Secretary Geithner. "This deal with commercial creditors is a key part of reducing Liberia's debt to a manageable level and helping maintain the economic turnaround begun under President Johnson Sirleaf. And I am proud that the United States could play a key role in this deal which will allow Liberia to focus on the urgent business of rebuilding its economy."

Liberia leveraged $38 million in donor funds, including a $5 million contribution from the United States in March 2009, through the World Bank's IDA Debt Reduction Facility to extinguish the debts on terms of about three cents on the dollar. This is consistent with Liberia's debt relief under the Heavily Indebted Poor Country (HIPC) Initiative and one of the steepest discounts a HIPC initiative country has ever received. Other contributors included the World Bank, Germany, Norway and the United Kingdom.

The U.S Government was responsible for the provision of over $211 million for the clearance of Liberia's arrears to the IMF and African Development Bank in late 2007 and early 2008. In addition, the United States has already cancelled over $390 million in bilateral claims on Liberia, and intends to go beyond the terms of the Paris Club debt relief arrangement and cancel 100 percent of Liberia's remaining debts to the United States by the time Liberia completes the HIPC Initiative.

The United States supports the efforts of the Liberian people and the government of President Johnson Sirleaf to overcome years of conflict and instability and to implement reforms that are putting Liberia back on the path of growth and development.

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