Press Release No. 11/258

Press Release: IMF Executive Board Completes Sixth Review Under the Arrangement under the Extended Credit Facility and Approves US$7 Million Disbursement for Liberia

June 27, 2011

The Executive Board of the International Monetary Fund (IMF) today completed the sixth review of Liberia’s economic performance under the arrangement under the Extended Credit Facility (ECF). The completion of this review will enable an immediate disbursement in an amount equal to SDR 4.44 million (about US$7 million), bringing total disbursements under the arrangement to SDR 239.02 million (about US$379.7 million). The Executive Board also approved the authorities’ request for an extension of the arrangement through March 31, 2012, and an augmentation of access of SDR 8.88 million (about US$13 million), equivalent by about 6.9 percent of quota, bringing total access under the arrangement to SDR 247.9 million (about US$394 million).

The ECF arrangement for Liberia was initially approved in March 2008, for an amount of SDR 239.02 million (about US$379.7 million; see Press Release No. 08/52). Liberia subsequently received debt relief from the IMF (about US$730 million); see Press Release No. 10/267 of which SDR 205.8 million was applied towards the current ECF arrangement.

Following the Executive Board’s discussion on Liberia, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair stated:

“The Liberian authorities continue to implement sound macroeconomic policies and are making progress with their broad-based reform program. Growth is expected to pick up in 2011, bolstered by increasing foreign investment, the reserve position is comfortable, and inflation is projected to remain broadly stable despite rising commodity prices. Nonetheless, non-performing loans are rising in the banking sector and strong financial oversight is essential.

“The fiscal program for FY2012 is well conceived. The emphasis on social and other priority spending is appropriate, as is the use of realistic revenue estimates. Contingency plans are in place to allocate efficiently uncertain revenues and grants, should they materialize. The budget for FY2012 anticipates a resumption of external borrowing on concessional terms consistent with long-term debt sustainability. Renewed efforts are needed to address capacity constraints that hamper execution of the public investment program.

“The authorities are pressing ahead with detailed reform agendas in key areas, including the financial sector, public financial management, tax policy, tax administration, and statistics. Financial sector reforms are designed to preserve stability, improve infrastructure, and promote intermediation in support of private sector-led growth; expenditure and revenue reforms aim at improving the quality of institutions and promoting the efficient use of resources; and efforts to improve statistics focus on compiling a comprehensive set of national accounts to improve economic management and planning,” added Mr. Shinohara.