The Executive Board of the International Monetary Fund accomplished at present the 2022 Article IV Consultation and the fourth assessment beneath the Extended Credit Facility (ECF) with Liberia.
“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,” the IMF stated.
The four-year association, in accordance with the IMF, comes with a complete entry of SDR 155 million (60 p.c of quota or about US$214.30 million) was accredited by the IMF Executive Board on December 11, 2019.
“Today’s decision allows for an immediate disbursement of SDR 17 million (about US$ 22.1 million), bringing total disbursements under the arrangement to SDR 85 million (about US$ 110.7 million),” the IMF stated in a launch.
“In completing the fourth review, the Executive Board granted a waiver of nonobservance of the end-June 2021 quantitative performance criterion on net international reserves, based on corrective action taken by the authorities.”
“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 double-digits,” the IMF intoned.
It added that quantitative program efficiency was fairly robust whereas the implementation of the structural reform agenda incurred delays and that adoption of new anti-corruption laws was good progress.
“Entrenching macroeconomic stability, achieving strong and fiscally sustainable economic growth, and addressing weaknesses in governance and public-sector institutions remain the main program objectives. Liberia’s COVID-19 vaccination program has accelerated in recent months, but pandemic-related risks, including a potential outbreak of new variants, remain. The upcoming political cycle with presidential and parliamentary elections, scheduled for September 2023, is another source of uncertainty. ”
Following the Executive Board dialogue, DMD Li, Acting Chair and Deputy Managing Director, made the next assertion: “The Liberian authorities continue to implement sound macroeconomic policies, despite delays with the broad-based reform agenda. 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. 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.”
Li stated that the federal government ought to press forward with fiscal structural reforms to make public companies and public enterprises extra environment friendly and to safe extra everlasting house for ample public funding whereas preserving debt sustainability. Progress with mobilizing home revenues ought to be constructed upon, together with by streamlining tax exemptions.
He added that efforts to deal with capability constraints that hamper the choice, preparation, and execution of public funding initiatives want renewed impetus.
“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. 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.”
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