Press Release No. 13/88

Press Release: IMF Concludes First ECF Review Mission to Liberia

March 22, 2013

An International Monetary Fund (IMF) mission led by Ms. Catherine McAuliffe visited Monrovia March 4–20, 2013, to conduct discussions for the first review under the Extended Credit Facility (ECF). ¹ The mission met with President Ellen Johnson Sirleaf and held discussions with Acting Minister of Finance Sebastian Muah, Central Bank of Liberia (CBL) Executive Governor Joseph Mills Jones, other senior officials, legislators, representatives of the private sector, civil society organizations, and development partners. The mission also conducted a one-day high level seminar on natural resource revenue management and an outreach event for University of Liberia students.

At the end of the mission, Ms. McAuliffe issued the following statement in Monrovia:

“Liberia’s economic growth is on an upward trajectory and economic prospects over the medium term remain favorable. Real gross domestic product growth is estimated at about 8.3 percent in 2012 and 7.5 percent in 2013, driven by continued strong growth in the mining sector, with some slowing in non-mining activity. Risks to growth remain on the downside from potentially sluggish global demand for commodities, but also from delays in implementing public sector capital investment projects. Inflation is in single digits and the external payments position remains stable. All but one of the end-December performance criteria were met (the ceiling on the CBL’s gross direct credit to central government was breached by a small margin). Most of the end-December structural benchmarks have now been completed.

“The mission reached agreement ad referendum on the first review under the three-year ECF arrangement. Policy discussions focused on: measures to address the projected budgetary resource shortfall this fiscal year due to lower than budgeted revenue and foreign borrowing which will require containing current expenditures during the remainder of the fiscal year; and on the need for realistic budget next fiscal year, including realistic revenue projection, aligning capital spending with core revenue and secured borrowing only, and holding current spending constant in nominal terms. The mission also stressed the critical importance of timely submission, approval and execution of the July 2013-June 2014 fiscal year budget. The mission welcomed the CBL’s commitment to maintain reserves at about 3 months of imports and to maintain the ongoing efforts to improve risk management at the CBL and commercial banks.

“The authorities’ structural reform agenda going forward focuses on strengthening financial oversight and reporting of state owned enterprises; enhancing budget programming, control and monitoring; improving capital spending execution and containing non-priority current expenditures; developing the financial sector and supporting the stability of the banking system; and improving national accounts statistics.

“The mission wishes to thank the Liberian authorities and its other counterparts for the constructive and cooperative discussions that took place in Monrovia.”

¹ The ECF has replaced the Poverty Reduction and Growth Facility as the Fund’s main tool for medium-term financial support to low-income countries. Financing under the ECF currently carries a zero interest rate, with a grace period of 5½ years, and a final maturity of 10 years. The Fund reviews the level of interest rates for all concessional facilities every two years.