07 May 2009
On April 16 the Liberian President, Ellen Johnson-Sirleaf, announced that the country had successfully bought back $1.2 billion of its commercial debt. This was possible through the assistance of the World Bank’s Debt Reduction Facility (DRF), to which the UK is a major contributor.
The Liberia DRF operation cancelled 25 outstanding commercial claims with a $38 million payment to creditors. Bought at about 3% of total face value, this represents a significant reduction in Liberia’s debt burden and the steepest ever reduction of developing country commercial debt. The UK contributed $5m towards this operation which will also help protect Liberia from ‘vulture fund’ activity.
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Debt reduction provides more money for the Liberian government to spend on education across the country. Photo credit: Panos
