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|Japan Defers Liberia’s 18.6 Billion Yen Debt|
|Published on January 02, 2009||Email To Friend Print Version
By D Kaihenneh Sengbeh
Liberia and Japan have sign an agreement rescheduling a debt of 18.6 billion Yen (approximately US$175 million) Liberia owes the Asian country.
Rescheduling debt is one means of providing a debtor with debt relief through a delay - extending the repayment period of an existing loan without any interest being added.
Japanese Ambassador near Monrovia Keiichi Katakami and Finance Minister Augustine Kpehe Ngafuan respectively signed the agreement for Japan and Liberia Saturday at the Finance Ministry in Monrovia.
Ambassador Katakami said he was very pleased to sign the Exchange Of Note on behave of his country because Liberian was engendering sound economic policies and reforms in the financial sector.
He said Japan has witnessed major reforms in Liberia, sending a clear signal that Liberia was ready to rebuild, thus the rescheduling of the debt as Liberia moves towards the completion point of the Heavily Indebted Poor Countries Initiative (HIPC) by 2010.
The HIPC Initiative is a comprehensive approach to debt reduction for heavily indebted poor countries pursuing IMF- and World Bank-supported adjustment and reform programs.
Liberia is now briskly fighting to reach the completion point of the HIPIC initiative - when most of the countries approximately US$5bn debt would be waived by lenders.
Touching on the Liberian-Japanese bilateral front, Ambassador Katakami said the relation has remained in insight even during the war. He recounted that his country has been providing assistance to Liberia through multilateral institutions until in 2007 when it went bilateral again.
He said this cooperation will continue and Japan remains a strong partner to Liberia’s rebuilding.
Japan has in recently increased support to Liberia: Last week it signed an agreement (134 M Yen, approximately US$13.4M) to rehabilitate the Liberian-Japanese Friendship Maternity Hospital at the John F. Kennedy Medical Center. It signed another 157M Yen grant with the UNDP to fight armed violence in Liberia.
Ambassador Katakami said all of these were in the vital interest of the strong bilateral ties between the Liberian and Japanese governments and peoples.
An elated Finance Minister Ngafuan expressed gratitude to the Japanese government and people for the debt rescheduling. “I glad today to be part of this occasion where we are putting pen to paper regarding our huge debt burden” he said.
About US$1.5bn of the country’s US$5bn debt has been waived during the last two years said Minister Ngafuan.
The Minister was thrilled that Japan has decided to join other countries to help scrub off Liberia’s debt through the HIPIC initiative.
He said Liberia has reached this far because the current government has taken very serious the reform of the economy and public financial management sectors, assuring, “and we are not going to drop the ball.”
“We are going to keep on the reform track and take it on a faster pace. As we speak, we now have a comprehensive public financial management law at the Legislature that deals with all the public financial management reforms,” the youthful minister noted.
He said the Ministry will engage the Legislature on the fast-track enactment of the law.
As a result of the government’s ambition to ensure systemic reform especially in the financial sector, an auditing commission and an anti-corruption commission are now in place, and Liberia hopes to reach the HIPC completion early 2010 to have the country’s debt burden removed.
Minister Ngafuan then recounted the many aids Japan has given post war Liberia and looked back at the Asian country’s major contribution to the Liberian health sector of prewar days.
Meanwhile Ambassador Katakami says he can not determine whether Japan will out rightly cancel all the debt Liberia owes it when it reach the HIPC completion point. “It is still soon, but let’s reach there and see what will be done,” he told journalists.