A Third Poverty Reduction Support Development Policy Operation (PRSDPO-III) intended to boost economic transformation in Liberia, critical for achieving inclusive growth, has been approved by the World Bank Board of Executive Directors.
According to a press release, the US$40 million International Development Association (IDA) grant will help address governance reforms and human capital development in the country.
This Third PRSDPO, which includes US$8 million from the IDA Crisis Response Window (CRW), supports the government’s strong policy efforts to adjust to the twin shocks from the Ebola crisis and the slump in commodity prices.
The Bank established the CRW to strengthen the capacity of IDA countries to deal with exogenous, natural or economic shocks in a timely, structured and transparent way, and provide additional financing to respond.
The objectives of this PRSDO are to strengthen governance with particular emphasis on transparency and accountability, as well as budget execution and oversight; address key constraints to growth, including electricity; and improve human capital development, particularly through improved access to education and health.
Expressing satisfaction for approval of the grant operation, World Bank Liberia Country Manager Larisa Leshchenko said: “This support is coming at the time when Liberia’s low revenues are due to the decline in commodity prices and slump in growth. This Poverty Reduction Support Development Policy Operation will be critical in helping the government deliver on its medium-term development agenda and transform the economy to reduce poverty and promote shared growth.”
The PRSDPO-III is the third in a programmatic series of four single-tranche operations to support the implementation of the government’s Agenda for Transformation.
This Agenda remains Liberia’s current medium-term strategy even in the aftermath of the Ebola crisis.
Liberia’s fledgling economy was also hard hit by severe external shocks from the sustained slump in global commodity prices.
The sharp drop and sustained low prices for rubber, iron ore and palm oil and the ensuing crisis have exacerbated the already sharp economic downturn.
The World Bank’s IDA was established in 1960 to help the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa.
Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries.
Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about US$19 billion over the last three years, with about 50 percent going to Africa.