The International Monetary Fund is to release a further $10.2m to support the economy in Liberia following the impact of the Ebola virus outbreak and the decline in global commodity prices.
This next payment will bring the total of financing supplied to Liberia to $95.8m under a funding arrangement signed in 2012, which includes $44.7m to help the country meet urgent fiscal needs resulting from the Ebola epidemic.
David Lipton, first deputy managing director and acting chair of the IMF’s executive board, said the country had largely overcome the impact of Ebola thanks to “decisive policy actions, international support and strong community engagement”.
However, the performance of programmes supported by the fund had been uneven as a result of both the epidemic and some “policy slippages”.
In addition, lower global commodity prices continued to hold back the country’s economy, and Lipton said authorities should press ahead with addressing weaknesses in public financial management. Plans for public sector borrowing must remain “prudent”, although resources should be diverted towards health and education.
Large investment projects should be funded mostly through grants and concessional loans, which would both facilitate the necessary capital projects and preserve debt sustainability, he added.
Lipton also cautioned Liberian authorities against extending tax relief for companies in the commodities sector “in light of such limited fiscal space”.
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