Africa's 'Iron Lady' revitalizes Liberia
UPDATE: On Oct. 7, the Nobel Prize committee announced that Liberian President Ellen Johnson-Sirleaf was one of three women to win the 2011 Nobel Peace Prize for advancing the role of women in society. In April, the Monitor profiled President Johnson-Sirleaf – who faces voters in Oct. 11 national elections – and her record of erasing her Liberia's crushing debt after years of civil war.
Late last summer, the war-ravaged West African country of Liberia quietly achieved something the United States and many other Western countries have never managed to do: It got rid of its external debt. All of it.Skip to next paragraph
Subscribe Today to the Monitor
A veteran of the international financial scene, Africa's "Iron Lady" made it her mission to gain international forgiveness of the debt, which by 2007 had ballooned to $4.9 billion, eight times the country's gross domestic product. And Liberia's newly sound financial footing makes the impoverished country much more attractive to foreign investors, who are pumping life into its economy.
"In three years, we met all of the conditionalities, which meant strong fiscal discipline," Ms. Sirleaf told the Monitor in a recent interview in her Monrovia office. "We were able to get that debt off our backs."
Sirleaf counts getting rid of that burden as her greatest achievement as president. And it was no easy task.
The monstrous external bill was a result of more than a quarter century of shoddy governance. Two warlords – first Samuel Doe and later Charles Taylor – controlled the country for much of the 1980s and 90s, when Liberia endured a brutal 14-year civil war. Both Mr. Doe and Mr. Taylor soaked up heavy streams of international aid, but neither ever bothered to make any interest payments.
"The debt just began to explode," says Ben Leo, a fellow at the Center for Global Development, a Washington think tank. "By the time [Sirleaf] came into office, the situation was beyond dire. It was just a complete mess."
How she did it
When Sirleaf became president in January 2006, she knew she had to get the country back on track.
"We couldn't even borrow from local banks to say 'give us an advance to meet salary payments,' " she says. The entire national budget at the time was a paltry $80 million – that's less than the city of Atlanta expects to spend on pensions this year.
"When she came into office … there were literally no desks, no chairs, no pencils, no computers, no functional bathrooms," says Leo. "She had to build from scratch."
Sirleaf – a former finance minister, World Bank employee, and vice president of CitiBank Africa – was in familiar territory when it came to navigating the minutiae of debt relief.