Press Release No. 08/269

Press Release: Statement at the Conclusion of an IMF Staff Mission to Liberia

November 4, 2008

An International Monetary Fund (IMF) mission headed by Mr. Robert Powell visited Liberia during October 19-31 to conduct the discussions for the Article IV consultation and the first review under the Poverty Reduction and Growth Facility (PRGF) and Extended Fund Facility arrangement that was approved in March 2008. The mission met with President Ellen Johnson-Sirleaf, Minister of Finance Mr. Augustine Ngafuan, Central Bank of Liberia (CBL) Governor Dr. Joseph Mills Jones, other senior officials of the government, members of the Liberian Legislature, the donor community, the private sector, and civil society.

The mission issued the following statement in Monrovia on October 31:

"Economic activity in Liberia remains buoyant despite the impact of higher international food and fuel prices. Real GDP growth of around 7 percent in 2008 is expected to be driven by higher production of rice and local timber, as well as in construction services. Inflation has increased, but is expected to return to single digits by end-2009. Performance under the IMF-supported program has been strong. In particular, we commend the Executive and the Legislature for their continued commitment to strengthening public financial management, as well as Liberia's efforts to improve governance and combat corruption. Continued support from donors is important for making the recently established anti-corruption commission fully operational.

"The mission has reached preliminary understandings with the authorities on the key elements of the 2009 program to be supported by the IMF. The program will continue to ensure that government spending is limited to available cash resources and the foreign exchange reserves of the Central Bank of Liberia (CBL) continue to increase. The structural measures will focus on making further improvements in the management of public finances, public auditing and supervising banks.

"Liberia's medium term outlook remains bright, but several risks are emerging as a consequence of the current global financial crisis and economic slowdown. The global economic slowdown is likely to affect foreign direct investments, exports, and remittance flows to Liberia. The CBL has made commendable progress in the past year in ensuring that all banks operating in Liberia meet capital adequacy standards and the mission welcomes the CBL's plans to further increase the resources it allocates to bank supervision and inspection.

"Most economic transactions in Liberia take place in United States dollars. It is therefore important for the government to maintain and improve the competitiveness and flexibility of Liberia's economy. This requires continued strong donor support for rebuilding infrastructure as well as other reforms to attract investment and stimulate private sector-led growth, consistent with the goals of the poverty reduction strategy.

"The IMF's Executive Board is tentatively scheduled to discuss the Article IV consultations and the first review of Liberia's economic program under the PRGF/EFF by end-December 2008."