Statement at the Conclusion of an IMF Staff Mission to LiberiaPress Release No. 11/130
April 11, 2011
An International Monetary Fund (IMF) mission led by Mr. Christopher Lane, visited Liberia March 28–April 8, 2011 to conduct discussions for the sixth review under the Extended Credit Facility (ECF) and a request from the Liberian authorities to extend support for their economic program until the end of 2011.1 The mission met with: Minister of Finance, Augustine Ngafuan; Central Bank of Liberia Executive Governor, Joseph Mills Jones; other senior officials; representatives of the private sector and development partners; and briefed President Johnson Sirleaf.
At the end of the mission, Mr. Lane issued the following statement in Monrovia:
“Economic growth is picking up although less rapidly than initially projected due to a slight decline in rubber production, continued delays in the restart of timber exports, while rising food and fuel prices may be adversely affecting consumption. Inflation remains in single digits and the exchange rate is broadly stable. Economic prospects for 2011 and over the medium term remain favorable provided that external risks related to rising international food and fuel prices and cross-border developments in Côte d’Ivoire are contained.”
“Performance under the Fund-supported economic program has been good. All monetary and fiscal targets (performance criteria) through end-December 2010 were met. As regards budget execution, current spending is on track but capital spending has, so far, been slowed by capacity constraints. Implementation of the remaining structural benchmarks—publication of national accounts data, rollout of an information system for Customs, and regular financial reporting by state owned enterprises to the Ministry of Finance—was slower than expected.”
“The draft FY2012 budget is prudent and realistic. It supplements revenues and grants with domestic and foreign borrowing for investment needs in a manner fully consistent with the authorities’ debt management strategy. The capital spending program would focus on a few strategic projects supported by intensive capacity building in key ministries and agencies to accelerate implementation.”
“Discussions were held on policies to complete and consolidate the ECF-supported economic and structural reform program through end-December 2011. The intention is to maintain macroeconomic stability, support growth and investment, and to complete and consolidate reforms already started. Fiscal policy measures will focus on deepening reforms of public financial management, revenue administration and governance. Financial sector reforms will focus on the payments system, capital market development and bank supervision.”
“Discussions, including on the level of Fund credit for the extension, are expected to be concluded shortly. The sixth review of the ECF and the request for an extension would then be submitted for consideration by the IMF’s Executive Board. Liberia will receive a disbursement of SDR 4.44 million (approximately US$7 million) on completion of the review.”
“The mission wishes to thank the Liberian authorities and its other counterparts for the constructive and cooperative discussions that took place in Monrovia.”
1 The ECF has replaced the Poverty Reduction and Growth Facility as the Fund’s main tool for medium-term financial support to low-income countries. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.