Home Economy W/Bank Approves Economic Resilience Funds for LIB

W/Bank Approves Economic Resilience Funds for LIB

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WASHINGTON: The World Bank Board has approved a Resilient Recovery Stand-Alone Development Policy Financing Operation (RRDPO) for Liberia to lay the institutional and policy foundations in selected growth-supporting and resilience-enhancing sectors and promote transparency and accountability in the public sector.

The financing amounts to $65 million ($22 million from the country’s performance-based allocation, $32 million from the International Development Association (IDA) Scale-Up Window Shorter Maturity Loans (SMLs), and $11 million from the Liberia’s performance-based allocation SMLs IDA credit).

This RRDPO is aligned with the World Bank’s Country Partnership Framework and supports the Government’s efforts to reignite sustainable and inclusive private sector-led growth, building on the gains made under the previous programmatic Inclusive Development Policy Operations (IGDPO) series concluded in 2022.

“We are glad that actions have been taken to strengthen transparency and accountability in the public sector. One of such is the amendment of the Act of the Liberia Anti-Corruption Commission (LACC),” said Mack Capehart Mulbah, Acting World Bank Liberia Country Manager. “This Development Policy Financing will help strengthen the LACC and enable it to directly prosecute cases of corruption.

The recent nomination of the LACC commissioners is a significant step toward the operationalization of the new LACC and starting of the prosecution of corruption cases.”

In support of food security, this operation will help increase the food storage capacity at country level and improve the quality of the warehouses to meet international storage standards – including the climate-resilience of the storage facilities – that in turn will help maintain stocks of agricultural products in good quality.

“Effective road connectivity is critical to development in several sectors in the Liberian society. Therefore, this operation supports the upgrading of the legal and regulatory framework for road management in Liberia,” said Mamadou Ndione, World Bank Senior Economist and Task Team Leader of the RRDPO.

“The enactment of a Road Act will establish a dedicated Road Agency entrusted with implementing the road program and complete a key pillar of road sector reforms intended to consolidate and secure capacity gains in the sector.

The Road Act will further streamline responsibility for different classes of roads, for example, delegating the maintenance of county roads to county governments, a level closer to the people who can voice their needs.”

Liberia’s land administration system will be strengthened under the RRDPO. It will promote economic resilience, social cohesion, women’s land rights, responsible agricultural investments and enabling business environment, as well as climate smart forest management. It will also ensure implementation of a robust Value Added Tax (VAT) regime, which will broaden the tax base, generate more revenues, and make the tax system more neutral and more efficient. The revenue increase from VAT is estimated as high as 50 percent at a 15 percent rate, or US$60 million additional revenue by 2024.

Additionally, this operation will assist the government in regularly generating information on government payment delays and arrears in order to reduce them. Shorter delays in public payments can improve private sector liquidity and profits, reduce the likelihood of bankruptcies, and ultimately increase economic growth. It will also help increase procurement reporting compliance from 6.1 percent of procurement entities (PEs) in 2020 to a targeted half, 50 percent in 2024.

The Ministry of Finance and Development Planning is responsible for implementation of the reforms supported by the operation. More specifically, the Aid Management Unit will be directly responsible for implementation of the operation.

The International Development Association (IDA) is the World Bank’s fund for the poorest. Established in 1960, it provides 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 76 poorest countries, 39 of which are in Africa. IDA resources help effect positive change in the lives of the 1.6 billion people living in the countries that are eligible for its assistance. Since its inception, IDA has supported development work in 113 countries. Annual commitments are constantly on the rise and have averaged $21 billion over the past three years, with about 61% going to Africa.

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