Statement at the Conclusion of an IMF Mission to LiberiaPress Release No.13/351
September 19, 2013
A mission from the International Monetary Fund (IMF), led by Ms. Corinne Deléchat, visited Monrovia from September 4-14, 2013 to conduct the second review of the government’s economic program supported by the IMF under an Extended Credit Facility (ECF) arrangement. The mission met with President Ellen Johnson Sirleaf, Senate President Gbehzohngar M. Findley, Minister of Finance Amara Konneh, Central Bank Governor Joseph Mills-Jones, and other high-level government officials. In addition, the mission had constructive discussions with members of the donor community, the Legislature, and the private sector.
At the end of the visit, Ms. Deléchat issued the following statement:
“Liberia’s economic outlook remains favorable, with output expected to expand by 8.1 percent in 2013 and around 7 percent in 2014. This strong performance reflects higher-than-anticipated iron ore production and an acceleration in non-mining real GDP growth boosted by robust private and public investment in line with the government’s development strategy, the Agenda for Transformation. Inflation (in Liberian dollar terms) is projected to pick up to 8 percent in 2013 owing to higher domestic and international food prices and recent exchange rate depreciation pressures, and to gradually decline to 6 percent in 2014. While uncertainty in the global economic environment poses downside risks to the growth outlook, this risk is offset by the coming on stream of new mining and agricultural concessions in the next few years, which could lead to higher growth over the medium term.
”The fiscal outturn for 2013 was broadly in line with the program. Total revenue including grants exceeded the projections, though core revenues fell short of the program targets. Total spending was above the program, owing in part to higher current spending. Externally financed capital spending was below the government targets reflecting implementation bottlenecks and delays in approving and distributing last year’s budget. As a result, the overall fiscal deficit for 2013 amounted to 1.6 percent of GDP, some of which was financed by the use of deposits.
“Program implementation has been challenging in some areas. Reserves declined below the agreed targets in June, in part due to higher sales of foreign exchange by the Central Bank of Liberia (CBL) in the context of the depreciation pressures. Solid progress was made in the implementation of the structural agenda, though a number of benchmarks were met with delay. In this context, the authorities and IMF staff reached agreement, ad referendum, on a package of policies that would allow the government to strengthen its buffers to address external shocks and to improve public financial management. In particular, the authorities indicated that they were committed to (i) rebuilding reserves and strengthening U.S. dollar and Liberian dollar liquidity management, including through improving the functioning of the foreign exchange auction and continuing to issue CBL bills, and (ii) identifying budgetary space to compensate for the expenditure overruns while enhancing budget execution monitoring.”
“Pending the regular internal review process, these policy commitments will pave the way for the conclusion of the second review of the ECF-supported program by the IMF Executive Board. The mission wishes to thank the authorities for their hospitality, and the quality of the policy dialogue.”