IMF Executive Board Completes Fourth Review Under Liberia’s ECF Arrangement and Approves US$6.55 Million DisbursementPress Release No.10/254
June 23, 2010
The Executive Board of the International Monetary Fund (IMF) today approved the fourth review of Liberia’s economic performance under its Extended Credit Facility (ECF) (formerly Poverty Reduction and Growth Facility) arrangement. The approval enables Liberia to draw an amount equivalent to SDR 4.44 million (US$6.55 million) immediately, bringing total disbursements under the arrangement to an amount equivalent to SDR 230.14 million (US$339.25 million). The SDR 239.02 million (about US$352 million) ECF arrangement for Liberia was approved by the Executive Board on March 14, 2008 (see Press Release No. 08/52).
The Executive Board also agreed, in principle, that Liberia has taken the steps necessary to reach its completion point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. This decision on Liberia’s HIPC completion point is contingent upon the Executive Board of the World Bank reaching a similar decision at a meeting scheduled on June 29, 2010. A joint press release will be published after that meeting.
Following the Executive Board’s discussion of Liberia, Mr. John Lipsky, First Deputy Managing Director and Acting Chair, issued the following statement:
“The Liberian authorities have demonstrated a strong commitment to sound macroeconomic policies in a difficult external environment. A balanced cash-based budget has been achieved despite revenue shortfalls, and structural reforms have advanced considerably. Growth is expected to accelerate in 2010, while inflation is expected to remain on a downward trend.
“The FY2011 (July-June) fiscal program, based on realistic revenue assumptions, entails an increased share of spending for poverty reduction strategy objectives. Improvements to public financial management should increase the overall effectiveness of government expenditure. The authorities appointed a high-level Debt Management Committee and revised the debt management strategy, balancing the need for increased priority investment with the objective of maintaining a low level of debt vulnerability.
“The authorities are pressing ahead with reforms to strengthen governance, public financial management, state-owned enterprises oversight, and revenue administration. Financial sector reforms aim to improve financial intermediation while preserving stability, including by enhancing banking supervision capacity and developing financial sector infrastructure. Efforts are also ongoing to improve statistics, focusing on the compilation of a new set of national accounts crucial for sound economic management.
“Liberia has made significant progress in implementing the floating completion point triggers under the enhanced HIPC Initiative. These actions have helped strengthen public financial management, debt management, governance, health and education provision, and the implementation of the Liberian poverty reduction strategy.”