Press Release: IMF Executive Board Completes Eighth Review Under the ECF Arrangement for Liberia and Approves US$6.8 Million Disbursement
May 9, 2012Press Release No.PR12/165
May 9, 2012
The Executive Board of the International Monetary Fund (IMF) today completed the eighth review of Liberia’s performance under the program supported by the Extended Credit Facility (ECF). The completion of the review enables the disbursement of an amount equivalent to SDR 4.44 million (about US$ 6.8 million), which will bring total disbursements under the arrangement to an amount equivalent to SDR 247.9 million (about US$ 381.7 million).
The ECF arrangement for Liberia was initially approved in March 2008, for an amount equivalent to SDR 239.02 million (see Press Release No. 08/52). In June 2011, the IMF Executive Board approved an extension of the arrangement through March 31, 2012, and an augmentation of access in an amount equivalent to SDR 8.88 million (see Press Release No. 11/258). In March 2012, the IMF Executive Board approved a further extension of the arrangement through May 31, 2012.
Following the Executive Board’s discussion on Liberia, Mr. Naoyuki Shinohara, Acting Deputy Managing Director and Chair issued the following statement:
“Liberia has made significant progress under the Fund-supported program. The authorities’ consistent implementation of sound economic and financial policies supported rising investment and solid economic growth, and laid the basis for obtaining comprehensive debt relief.
“The medium-term outlook for the economy remains favorable on account of increasing exports, strong foreign investment, and rising activity in the services sector. However, slowing global demand for commodities and volatile food and fuel prices pose challenges. Continued prudent macroeconomic policies will be important to consolidate the achievements thus far, tackle the vulnerabilities, support reduction in poverty, and mobilize donor support.
“Fiscal performance in FY2012 has been characterized by strong revenue performance as well as some additional current spending. Going forward, it will be important to focus more on the composition and effectiveness of spending. The emphasis is being appropriately placed on boosting public investment and priority social spending, and preparing the FY2013 budget in the context of a three-year Medium-Term Expenditure Framework. In addition, relying mainly on grants and concessional borrowing will ensure debt sustainability. Continued efforts to address capacity constraints will also be important to strengthen the execution of the public investment program.
“Monetary policy should continue to focus on maintaining price and exchange rate stability and the planned issuance of treasury bills will enhance liquidity management. Although the financial sector continues to develop, the weak credit environment and high level of non-performing loans warrant continued proactive supervision by the Central Bank of Liberia.
“The authorities’ reform agenda rightly aims at boosting growth and employment. Financial sector reforms are intended to enhance stability and to improve financial sector infrastructure and intermediation in support of job creating investment. Fiscal reforms aim at improving the quality of institutions, reducing waste and inefficiency, widening the tax base, and improving taxpayer services,” Mr. Shinohara added.