IMF Executive Board Completes First Review Under the Extended Credit Facility Arrangement for Liberia and Approves US$11.1 Million DisbursementPress Release No. 13/248
July 3, 2013
The Executive Board of the International Monetary Fund (IMF) today completed the first review under a three-year arrangement under the Extended Credit Facility (ECF) for Liberia. The completion of the review enables the disbursement of an amount equivalent to SDR 7.382 million (about US$11.1 million), bringing the total disbursements under the arrangement to SDR 14.764 million (about US$22.1 million). In completing the review, the Board approved a waiver for the nonobservance of the performance criterion on the ceiling of the CBL’s gross direct credit to central government.
The ECF arrangement for Liberia for the equivalent of SDR 51.68 million (about US$78.9 million) was approved by the IMF’s Executive Board on November 19, 2012 (see Press Release No. 12/449).
Following the Executive Board’s discussion of Liberia, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair issued the following statement:
“Liberia is experiencing strong economic growth, driven mainly by mining, and rising activity in construction and services. Spillovers to the rest of the economy, however, remain limited. Non-resource real GDP growth has slowed recently on the back of the sluggish pace of capital spending. Continued commitment to strong policies and structural reforms under the Fund-supported program is necessary to achieve broad-based growth, diversify the economy, reduce poverty, and create employment.
“The authorities have an ambitious medium-term development strategy—the Agenda for Transformation. This agenda focuses on scaling up strategic infrastructure investments, developing institutional and human resource capacity, deepening financial markets, and strengthening property rights.
“Fiscal policy for FY 2013/14 focuses on containing current spending to create space to increase public investment, and strengthening budget execution and controls, through enhanced public financial management. Prudent management of external debt will be important to implement crucial growth-enhancing investments while maintaining debt sustainability.
“Monetary policy continues to focus on containing inflation by maintaining exchange rate stability, as the economy remains highly dollarized. The central bank is further improving its policy framework on liquidity monitoring and forecasting. Maintaining adequate level of reserves would provide a buffer against external shocks.
“Financial sector reforms continue to focus on reducing vulnerabilities in the system and improving access to credit. The Central Bank of Liberia (CBL) is strengthening the legal and institutional framework particularly by enhancing the regulatory and supervisory capacity of the CBL, improving the credit reference system, and establishing a collateral registry. These measures would help improve financial intermediation and access to credit, especially for small borrowers.
“Governance and transparency should continue to be strengthened, including through a revised Petroleum Act and the new Revenue Authority. Enhancing financial oversight of State-Owned Enterprises, cleaning up of payrolls, further rolling out the financial information system, and the auditing of the government’s budget by the General Auditing Commission will be important going forward.”