Liberia: Request for a 40-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Liberia

IMF Staff Country Reports, October 11, 2024

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Liberia: Request for a 40-Month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Liberia

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Bibliographic details

• Published: October 11, 2024
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400291852.002

Executive summary

• The paper presents Liberia’s Request for a 40-Year Arrangement under the Extended Credit Facility (ECF).
• The 40-month financing package will support the authorities’ Economic Reform Agenda to address macroeconomic imbalances, strengthen debt sustainability, and lay the foundations for higher, more inclusive, and private sector-led growth, beyond the enclave sector.
• The ECF arrangement is expected to catalyze additional external financing from international financial institutions and development partners.
• Liberia’s economic vulnerability has worsened in recent years; fiscal slippages have compromised public debt sustainability and contributed to a sharp decline in international reserves.
• Governance weaknesses have persisted; comprehensive structural reforms, including improvements in governance and transparency, are critical.
• Maintaining strong program ownership, supported by capacity development, will be crucial to ensure program success and continued donor support.

Key findings and diagnostics

• Economic vulnerabilities:
  • Fiscal slippages have compromised public debt sustainability.
  • International reserves have experienced a sharp decline.
  • Governance weaknesses remain a persistent concern.
• Reform priorities:
  • Revitalize the Economic Reform Agenda to support macroeconomic stability.
  • Promote broad-based economic development and reduce widespread poverty.
  • Lay foundations for higher, more inclusive, and private sector-led growth beyond the enclave sector.
• Financing implications:
  • The ECF arrangement is expected to catalyze additional external financing from international financial institutions and development partners.

Policy recommendations and program design

• Fiscal policy:
  • Address fiscal slippages to restore public debt sustainability.
• Structural reforms:
  • Implement comprehensive structural reforms focused on governance and transparency.
  • Strengthen public financial management (PFM) and budget planning and preparation.
• Program implementation:
  • Maintain strong program ownership.
  • Support program implementation with capacity development to secure continued donor support and program success.

Subject coverage and keywords (as listed)

• Subject: Budget planning and preparation, Debt sustainability, Debt sustainability analysis, External debt, Public debt, Public financial management (PFM)
• Keywords: approved budget, Budget planning and preparation, budget projection, budget proposal, central bank bank transaction, Debt sustainability, Debt sustainability analysis, Global, increase in capital expenditure, Sub-Saharan Africa, West Africa

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