The CBL Executive Governor was invited to take part as a panelist during the Symposium on the theme “Rising African Sovereign Debt and its Implications for Monetary Policy and Financial Stability.” Hon. Patray shared his experience on Liberia’s sovereign debt and its implication for monetary policy and financial stability.
In discussing the Liberian experience, Executive Governor Patray said Liberia was only at a moderate risk of debt distress, with its debt stock at about 32% of its gross domestic product (GDP), in comparison to 600% during the period when it was placed in the highly indebted poor country (HIPC) category. Currently, Liberia’s total debt as a share of GDP is far below the debt-to-GDP ratio of sub-Saharan Africa, the Executive Governor said. “It is worth noting that the current debt-to-GDP level of Liberia is also far below the ECOWAS Convergence Criteria, which shows that the Country’s is within a sustainable threshold with no risk of debt distress,” he added.
The main challenges facing Liberia, according to Executive Governor Patray, included the serious issue of borrowing to finance developmental projects with future economic and social returns. The Executive Governor used the occasion to shed light on current macroeconomic developments in Liberia, highlighting rising inflation due mainly to rapid exchange rate depreciation as a result of the weak external performance of the Liberian economy, a situation experienced by several African countries.