The Board of Governors of the Asian Infrastructure Investment Bank (AIIB) has approved Liberia’s membership at its Fifth Annual Meeting held in Beijing, China, on Tuesday, July 28, 2020.
Liberia’s approval follows a formal application made on April 13, 2020 by the Government of Liberia (GOL) through the Ministry of Finance and Development Planning.
The approval comes as President George Manneh Weah seeks to expand Liberia’s global economic leadership and presence to foster regional cooperation, economic development and integration.
Joining the AIIB presents an opportunity for Liberia to continue to expand its cooperation with the community of Development Finance institutions (DFIs) around the world.
Minister Tweah, who attended the virtual Annual Meeting, said he believes that the country’s membership in the AIIB will definitely bring huge benefits and opportunities in terms of external resources mobilization to boost the country’s infrastructure and economic transformation, in line with the “Pro-Poor Agenda for Prosperity and Development (PAPD)”.
Accordingly, debt burden of countries is becoming acute, and Liberia looks more to creative financing options and instruments availed by the Bank, to syndications and collaborations with other DFIs to deliver public-private partnerships to fund large national and regional projects with huge economic impacts, including roads, power, ports and health systems strengthening and water and sanitation.
Liberia, as a member, is expected to benefit from projects financing that have a value of more than 20 to 30 times the total value of the investment the country makes in the bank, as the AIIB could hold equity share in a Public Private Partnership (PPP) venture in roads or energy development or in projects of similar nature.
With the membership approved, Liberia stands to benefit from the announced US$10 billion COVID-19 pandemic support package for member countries.
Minister Tweah said the Liberian government is particularly delighted to see that AIIB has already joined other multilateral development banks, like the World Bank (WB) and the African Development Bank (AfDB), in their COVID-19 response by creating a Crisis Recovery Facility (CRF) to support members and clients in alleviating and mitigating economic, financial and public health pressures arising from COVID-19. He said Liberia, as a small and developing country, is no stranger to the deadly impact that a pandemic can wreak on a nation’s people and economy, especially when they are ill-prepared. The Ebola outbreak hit the already fragile healthcare system very hard and collapsed the struggling economy. Five years on, the country is barely recovering and now is again faced with the COVID-19.
Liberia will also leverage its membership within the bank to attract Asian investors and development financing into the country, especially at a time the country needs all the investments it can get in the post-COVID-19 era.
The country’s accession is subject to the National Legislature ratification.
The Finance Minister said the country is looking forward to working with the bank to explore opportunities for resolving major development and infrastructure challenges and confronting other African countries, in the form of large road and electricity infrastructure deficits, climate change and challenges to perfecting digital economic frontier.
The AIIB is also expected to partner with the MDBs to develop regional projects in the Mano River region. Liberia is presently exploring possibilities for regional projects with Guinea, Sierra Leone or the Ivory Coast.
Minister Tweah thanked the Board of Governors, the Management, and shareholders of the bank for according Liberia the opportunity to join the bank, and promise that the nation will work with the bank under the CRF to strengthen the supply chain, access and distribution capabilities of its health care system, “which we see as critical to our COVID-19 response strategy”.
He used the occasion to thank President George M. Weah for his leadership in Liberia’s economic and infrastructure transformation.
In addition, he thanked his team and other actors who worked tirelessly to actualize Liberia’s membership effort within the bank.
AIIB will now be a member of the group of traditional development partners such as the WB, the IMF, the IFC and AfDB and ECOWAS Bank for Investment and Development (EBID). With this addition, there are bigger opportunities for collaboration and importantly a space where AIIB will actively complement the efforts of existing partners.
The AIIB is a US$100 billion international financial institution that was established as a significant and prestigious multilateral development bank (MDB) in 2016 to improve social and economic development within the Asia-Pacific region and other parts of the world by investing in sustainable infrastructure development and other economic projects aimed at reducing poverty.
The bank currently has 102 countries as members, including Ghana, Guinea, Rwanda, Benin, Togo, Senegal, China, Canada, United Kingdom, etc. Since its inception, the bank has spent over US$19.14 billion on development project financing. AIIB’s sovereign loan program, like those of other MDBs, is tailored to developing countries like Liberia that cannot afford borrowing from the international market at higher commercial non-concessionary lending rates. Loan maturity runs from 20 to 35 years.