MONROVIA: The government of Liberia has showered with praises by the acclaimed International Monetary Fund (IMF) for what the IMF termed as its continue step to implement sound macroeconomic policies despite delays with the broad-based reform agenda.
The IMF’s recognition followed after its Executive Board completed the 2022 Article IV consultation and the fourth review under the ‘Extended Credit Facility’ (ECF) with Liberia.
“Today’s decision allows for an immediate disbursement of SDR 17 million (about US$ 22.1 million), bringing total disbursements under the arrangement to SDR 85 million (about US$ 110.7 million),” the IMF indicated.
The four-year arrangement, with total access of SDR 155 million (60 percent of quota or about US$214.30 million) was approved by the IMF Executive Board on December 11, 2019.
The IMF statement on Liberia also provided an outlook of the country’s micro economic positions in the past and preceding fiscal year.
Accordingly, it says, Liberia experienced a strong economic recovery in 2021. Growth is expected to soften to 3.7 percent in 2022, largely due to heightened global uncertainties and commodity price shocks, which are pushing inflation into the double-digits.
“The supplementary budget for 2022 aims primarily to mitigate pressures on food prices and stabilize the state-owned electricity company. To limit the temporary widening of the fiscal deficit, the authorities have streamlined non-priority spending, while largely preserving the significant increase of public investment relative to previous years, made possible by partial use of the IMF’s 2021 SDR allocation to Liberia,” the IMF added.
The IMF is however encouraging the government to press ahead with fiscal structural reforms to make public services and public enterprises more efficient and to secure more permanent space for adequate public investment while preserving debt sustainability.
Also, the Progress with mobilizing domestic revenues according to the IMF should be built upon, including by streamlining tax exemptions. ‘Efforts to address capacity constraints that hamper selection, preparation, and execution of public investment projects need renewed impetus.’
Interestingly the International Monetary Fund has described as good progress the recently passed restated LACC Act despite public outcry.
“Stepping up the fight against corruption remains a top priority. The recent adoption of the amended Liberia Anti-Corruption Commission (LACC) Act, the new Whistleblower and Witness Protection Act, and the revised Code of Conduct, is good progress. Swift implementation is now key,” the statement added.
Macroeconomic stability is set to strengthen further with the planned modernization of Liberia’s monetary policy framework and the ongoing currency changeover, provided operational risks are appropriately mitigated.
Improving educational attainment, adapting to climate change, and addressing gender disparities are also critical according to the International Monetary Fund for the government adder to address.
The four-year arrangement, with total access of SDR 155 million (60 percent of quota or about US$214.30 million) was approved by the IMF Executive Board on December 11, 2019.
Following the Executive Board discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, made the following statement: “The authorities managed to keep the program broadly on track by preserving macroeconomic stability, ensuring a comfortable international reserve position, and maintaining debt sustainability.
The supplementary budget for 2022 aims primarily to mitigate pressures on food prices and stabilize the state-owned electricity company.” By: Varney Dukuly
