## IMF Executive Board Completes Seventh and Eighth ECF Reviews for Liberia And Approves US$20.7 Million Disbursement

_IMF News, November 13, 2017_

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## Bibliographic details
- Published: November 13, 2017

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### Disbursement and program financing
- Completion of the seventh and eighth (final) reviews enables immediate disbursement of SDR 14.764 million (about US$20.7 million).
- Total disbursements under the arrangement now amount to SDR 111.664 million (about US$156.3 million).  
- A separate sentence in the release states total disbursements under the arrangement to SDR 111.664 million (about US$ 156.7 million).

### Waivers and performance criteria
- The Executive Board approved the authorities’ request to waive the non-observance of performance criteria.
- Waivers pertain to:
  - end-December 2016 floors on total revenue collection of the central government;
  - end-December 2016 ceiling on the present value of gross external borrowing by public sector;
  - end-June 2017 floors on total revenue collection of the central government;
  - end-June 2017 net foreign exchange position of the Central Bank of Liberia;
  - end-June 2017 ceiling on the Central Bank of Liberia’s gross direct credit to the central government.

### ECF arrangement history and augmentation
- The ECF arrangement for Liberia was approved by the Board on November 19, 2012 (Press Release No. 12/449) for SDR 51.68 million (about US$69.3 million or 40 percent of quota as of that date).
- In September 2014, the Board approved an augmentation of access of SDR 32.3 million (about US$ 43.3 million or 25 percent of quota as of that date) under the ECF arrangement as part of the response to the Ebola outbreak.

### IMF assessment of recent performance and economic context (statement by Mr. Tao Zhang, Deputy Managing Director and Acting Chair)
- Causes of delayed recovery:
  - lingering effects of the Ebola epidemic;
  - low global commodity prices;
  - impact of the withdrawal of the United Nations peacekeeping mission.
- Consequences noted:
  - sharp decline in net foreign currency inflows;
  - pressure on the exchange rate and inflation;
  - mixed program performance.
- Authorities’ policy response described as appropriate:
  - exchange rate adjustment;
  - relatively tight fiscal and monetary policy stance that prevented exchange rate overshooting and contained second round inflationary dynamics.

### Policy recommendations and priorities going forward (from Mr. Tao Zhang)
- Fiscal policy:
  - Adherence to rules governing the release of contingent expenditure will be crucial to avoid unintended financing gaps while protecting high-priority social spending.
- Monetary policy:
  - The monetary policy stance needs to remain tight in the face of inflationary and exchange rate pressures.
  - Staying within the spending limits set in the central bank’s three-year financial plan will be essential to regaining adequate reserve cover.
- External borrowing:
  - Recourse to external borrowing should remain restrained as the risk of debt distress is already elevated.
  - New borrowing should be on concessional terms and, to the extent possible, replaced with enhanced utilization of already signed and ratified loans.
- Governance and supervision:
  - Publication of the executive summary of the forensic audit report of the circumstances leading up to the closure of First International Bank Liberia Limited and a significant financial loss by the central bank was an important first step in ensuring transparency.
  - Publication of an action plan to improve central bank governance and supervisory capacity is welcome; sustained efforts will be needed for successful implementation.
- Structural reforms and political context:
  - Good progress has been made on structural reforms and maintaining this momentum beyond the expiration of the Fund-supported program is important.
  - Resolving the current political uncertainty in a timely manner consistent with the democratic process would be important to minimize the economic and social costs of delay.

*Press Release No. 17/437 — November 13, 2017, IMF Communications Department*

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## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [Liberia and the IMF](http://www.imf.org/external/country/LBR/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 12/449](http://www.imf.org/en/news/articles/2015/09/14/01/49/pr12449)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/11/13/pr17437-imf-executive-board-completes-seventh-and-eighth-ecf-reviews-for-liberia_