The Executive Board of the International Monetary Fund has approved the immediate disbursement of U.S.$48.8 million dollars to Liberia under the Fund’s program which was reached with the Government in 2019.
The decision follows two reviews by the IMF of the Extended Credit Facility program and other interventions, including debt relief and emergency assistance, which the Fund said are intended to aid Liberia’s reform efforts and further stabilize the country’s economy.
In an announcement on December 21, 2020, the IMF praised the reform initiatives undertaken by the Weah Administration and its commitment to “fiscal discipline and further improvements in cash management, transparency and accountability in spending and domestic revenue mobilization to finance their development agenda”.
The Fund however lamented how the COVID-19 pandemic has exerted “significant strain” on the country’s already fragile economy; but said “the authorities have taken the necessary steps to stabilize the economy”. The IMF acknowledged that Liberia will need modest fiscal loosening in order “to meet humanitarian needs during the COVID-19 pandemic”.
The Fund Acting Chair and Deputy Managing Director, Tao Zhang, has said that Liberia’s monetary policy stance is “appropriately aligned with the inflation objective”, and that significant progress has been made in strengthening the Central Bank of Liberia’s independence. He also commended the government for the good governance measures that are being taken “to clear the fiscal audits backlog, further enhance procurement transparency, and upgrade the anti-corruption” fight.
The Board has been largely positive of the Liberian government’s efforts to achieve macroeconomic stability, address governance gaps and lay the path for sustainable and inclusive growth. “Assuming global conditions gradually normalize, growth is projected to reach 3.2 percent in 2021”, it said, but warned that downside risks to this outlook are high. “Liberia remains fragile and vulnerable to shocks as both fiscal and external buffers remain low”, the statement said.
The IMF has urged that further efforts were needed to contain the CBL operational expenses and build up its reserves, while admonishing the authorities that confidence in the financial sector was critical to financial stability. A press release signed by the Minister of Information, Ledgerhood J. Rennie added.