Statement at the Conclusion of an IMF Staff Mission to LiberiaPress Release No. 11/337
September 16, 2011
An International Monetary Fund (IMF) mission led by Mr. Christopher Lane visited Liberia September 8–16, 2011 to conduct discussions for the seventh review under the Extended Credit Facility (ECF).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, civil society organizations, and development partners. The mission also participated in a High Level National Economic Forum on exploring strategic options for inclusive growth and sustainable development.
At the end of the mission, Mr. Lane issued the following statement in Monrovia:
“Recent economic developments are broadly encouraging. Economic growth in 2011 is accelerating, supported by resumption of iron ore production and increased output in the rubber and forestry sectors. Economic prospects for 2012 and over the medium term remain favorable, helped by buoyant prices for iron ore, rubber and palm oil. The downside risk to this outlook is a potential slowdown in global economic activity which could lead to lower commodity prices and hence lower fiscal revenues, employment, and growth.
“The mission welcomed the progress made both in maintaining macroeconomic and financial stability and in making progress on the development agenda, notwithstanding the challenges posed by elevated food and fuel prices. The fiscal outturn in FY2011 has demonstrated improved resource mobilization, expenditure, and spending composition compared to the previous years. The banking sector continues to expand and financial soundness indicators are improving, with a recent deterioration of bank loan portfolios being successfully contained. The launch in September of mobile banking will bring access to financial services to a larger share of population. Considerable progress has been achieved in finalizing a number of administrative reforms, plans, and legislation; publication of the Liberia Revenue Code is expected shortly.
“Performance under the IMF-supported economic program has been good. All monetary and fiscal targets (performance criteria) through end-June 2011 were met. Progress is ongoing on the remaining structural benchmarks, including customs systems upgrading and the launching of the integrated financial management information system. Further progress is needed in the area of financial reporting by state owned enterprises, relatively few of whom are complying with current reporting regulations.
“The approved FY2012 budget balances the need to expand priority expenditure with fiscal prudence and measures to safeguard efficient budget execution, including the preparation of a contingent budget to accommodate potential additional revenues. It will be important, however, to further improve economic governance, transparency, and financial oversight of the operations of state-owned enterprises as required under the Public Financial Management law.
“The mission welcomes the Central Bank of Liberia’s commitment to maintain its strategic focus on price stability and its ongoing efforts to strengthen the credit environment and improve its supervisory capacity through the adoption of risk-based supervision, as well as steps towards developing the financial sector and further enhancing internal management and financial controls. Monetary developments are on track and no significant changes to the monetary policy stance appear warranted.
“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.