IMF Executive Board Completes the Third Review under the Extended Credit Facility for Liberia, and Approves US$23.64 Million Disbursement
IMF News, November 24, 2021
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- IMF Executive Board Completes the Third Review under the Extended Credit Facility for Liberia, and Approves US$23.64 Million Disbursement
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- Published: November 24, 2021
Overview
- Completion of the third review under the Extended Credit Facility (ECF) enables an immediate disbursement of US$23.64 million.
- The four-year ECF arrangement has total access of SDR 155 million (60 percent of quota or about US$214.30 million) and was approved on December 11, 2019.
- Completion of the third review brings total disbursements under the arrangement to SDR 68 million (US$94.8 million).
- On August 23, 2021, Liberia received SDR 247.7 million (US$345.3 million) in the context of the general SDR allocation to the IMF’s membership.
- Program objectives: restoring macroeconomic stability to lay foundations for sustainable inclusive growth and addressing weaknesses in governance.
Program performance and macroeconomic outlook
- Program performance described as mixed: favorable fiscal outturn but delays in implementing the structural reform agenda.
- Despite COVID-19 challenges, authorities have kept the program broadly on track and maintained macroeconomic stability.
- Fiscal and inflation outcomes:
- Fiscal deficit slightly declined to 4.2 percent of GDP in 2020, helped by higher grants.
- Inflation receded to 13 percent in 2020.
- Growth projections:
- Economy contracted by 3 percent in 2020.
- Economic activity projected to expand by 3.6 percent in 2021, restoring pre-pandemic levels.
- The economy "is on track to rebound strongly next year" and the medium-term outlook is favorable conditional on program implementation.
- Waivers granted by the Executive Board:
- Waiver of nonobservance of the end-December 2020 quantitative performance criterion on net internal reserves based on corrective action.
- Waiver of nonobservance of the continuous performance criterion on external arrears of the central government based on its minor nature.
Policy recommendations and authorities’ commitments (as stated by Mr. Bo Li, Acting Chair and Deputy Managing Director)
- Use of new SDR allocation:
- Strengthen the reserve position.
- Increase spending on the vaccination program.
- Support high-quality development projects.
- Retire expensive debt.
- Fiscal policy priorities:
- Contain the wage bill.
- Enhance domestic revenue mobilization.
- Improve the quality of public spending.
- Operationalize a Treasury Single Account.
- Authorities committed to refraining from monetary financing of the budget and non-concessional external borrowing.
- Timely publication of public procurement information and audits of the government’s Annual Financial Statements remains a priority.
- Monetary policy and central bank reforms:
- Maintain accommodative monetary policy stance to improve liquidity and support recovery.
- Upcoming currency changeover operation requires managing operational risks and further elaboration of a time-bound implementation plan.
- Further efforts needed to enhance the central bank’s independence, governance, and transparency.
- Financial sector and governance:
- Strengthen and develop the financial sector; continue bank restructuring and bolster supervisory toolkit.
- Authorities committed to addressing high levels of non-performing loans and weaknesses in the AML/CFT regime.
- Fight corruption; accelerate structural reforms to improve the business climate for private sector development.
- More rigorous implementation of transparency and governance reforms to ensure tangible results.
Selected economic indicators and key statistics (2019–26, as presented)
- Real sector (annual percent change)
- Real GDP: -2.5 (2019), -3.0 (2020), 3.2 (2021 Est. 1st & 2nd Review), 3.6 (2022 Proj.), 4.1 (2023), 4.7 (2024), 4.9 (2025), 5.7 (2026)
- Mining & panning: 13.2 (2019), 2.0 (2020), 1.9 (2021), 7.0 (2022), 4.2 (2023), 6.8 (2024), 7.5 (2025), 5.4 (2026)
- Non-mining: -4.7 (2019), -3.8 (2020), 3.5 (2021), 2.9 (2022), 5.2 (2023)
- Nominal non-mining per capita GDP (U.S. dollars): 554 (2019), 529 (2020), 527 (2021), 584 (2022), 537 (2023), 618 (2024), 625 (2025), 655 (2026), 686, 723
- Nominal GDP (millions of U.S. dollars): 3,080 (2019), 3,037 (2020), 3,107 (2021), 3,426 (2022), 3,247 (2023), 3,698 (2024), 3,847 (2025), 4,143 (2026), 4,464, 4,810
- Inflation (consumer prices)
- Annual average: 27.0 (2019), 17.0 (2020), 9.8 (2021), 8.4 (2022), 11.5 (2023), 8.3 (2024), 5.0 (2025)
- End of period: 20.3 (2019), 13.1 (2020), 8.0 (2021), 9.7 (2022), 6.0 (2023), 12.3 (2024), 6.4 (2025)
- Population (millions): 4.6 (2019), 4.8 (2020), 5.1 (2021), 5.3 (2022)
- Central government operations (percent of GDP)
- Total revenue and grants: 27.4 (2019), 31.2 (2020), 29.2 (2021), 30.7 (2022), 28.8 (2023), 28.9 (2024), 28.0 (2025), 28.5 (2026), 28.2, 27.7
- Total revenue: 13.9 (2019), 15.8 (2020), 15.3 (2021), 17.8 (2022), 16.6 (2023), 17.2 (2024), 17.4 (2025), 17.7 (2026), 17.9
- Grants: 13.5 (2019), 12.9 (2020), 12.2 (2021), 11.7 (2022), 10.5 (2023), 11.1 (2024)
- Total expenditure: 32.2 (2019), 35.4 (2020), 33.1 (2021), 32.9 (2022), 30.0 (2023), 30.2 (2024), 29.6 (2025), 29.1 (2026)
- Current expenditure: 21.4 (2019), 25.1 (2020), 21.2 (2021), 22.6 (2022), 19.9 (2023), 19.5 (2024), 18.5 (2025), 18.0 (2026)
- Capital expenditure: 10.8 (2019), 10.3 (2020), 11.3 (2021)
- Overall fiscal balance, including grants: -4.8 (2019), -4.2 (2020), -2.4 (2021), -4.0 (2022), -2.1 (2023), -1.7 (2024), -1.5 (2025), -1.4 (2026)
- Overall fiscal balance, excluding grants: -18.3 (2019), -19.6 (2020), -16.9 (2021), -15.3 (2022), -14.5 (2023), -15.8 (2024), -12.6 (2025), -12.8 (2026), -12.0, -11.2
- Public debt (percent of GDP)
- Total public debt: 48.9 (2019), 61.8 (2020), 62.0 (2021), 56.1 (2022), 63.5 (2023), 59.0 (2024), 59.4 (2025), 56.2 (2026), 53.2, 50.1
- Public external debt: 35.2 (2019), 40.9 (2020), 42.8 (2021), 38.3 (2022), 45.2 (2023), 38.1 (2024), 38.7 (2025), 37.4 (2026), 36.8, 36.3
- Public domestic debt: 13.6 (2019), 20.9 (2020), 19.2 (2021), 18.4 (2022), 20.6 (2023), 18.8 (2024), 16.4 (2025)
- Monetary and financial indicators
- M2/GDP: 25.5 (2019), 22.3 (2020), 24.6 (2021), 23.6 (2022), 24.2 (2023)
- Credit to private sector (percent of GDP): 16.1 (2019), 16.2 (2020), 17.3 (2021)
- Credit to private sector (annual percent change): -11.3 (2019), 5.5 (2020), 4.0 (2021), 12.7 (2022), 9.4 (2023), 7.9 (2024), 8.1 (2025), 8.2 (2026)
- External sector (percent of GDP)
- Current account balance including grants: -16.3 (2019), -22.2 (2020), -17.9 (2021), -22.6 (2022), -18.9 (2023), -19.9 (2024), -19.3 (2025), - (2026)
- Current account balance excluding grants: -25.0 (2019), -23.7 (2020), -36.1 (2021), -34.8 (2022), -24.1 (2023), -24.2 (2024), -24.6 (2025), -23.8 (2026), -22.5
- Trade balance: -12.9 (2019), -10.8 (2020), -10.2 (2021), -9.4 (2022), -7.1 (2023), -4.3 (2024)
- Exports: 17.5 (2019), 20.0 (2020), 14.9 (2021), 23.1 (2022), 23.3 (2023), 23.7 (2024), 23.2 (2025), 24.3 (2026), 26.3
- Imports: -30.3 (2019), -32.9 (2020), -33.8 (2021), -35.7 (2022), -33.2 (2023), -34.1 (2024), -32.6 (2025), -31.4 (2026), -30.6
- Grants (donor transfers, net): 7.3 (2019), 4.4 (2020), 4.5 (2021)
- Gross official reserves (millions of U.S. dollars): 292 (2019), 358 (2020), 403 (2021), 716 (2022), 429 (2023), 719 (2024), 769 (2025), 779 (2026), 811, 846
- Months of next year’s imports: 2.2 (2019), 2.3 (2020), 3.0 (2021), 4.3 (2022), 3.8 (2023)
- CBL's net int'l reserves (millions of U.S.): 27 (2019), 0 (2020), 70 (2021), 392 (2022), 75 (2023), 362 (2024), 401 (2025), 444 (2026), 504, 575
Press Release No. 21/347, November 24, 2021 — IMF Communications Department.