IMF Approves $11 Million Allocation For Liberia Following Review

IMF Approves $11 Million Allocation For Liberia Following Review

Strong economic growth and a positive second review of the Extended Credit Facility (EFC) has deemed Liberia fit to received an additional allocation of $11 million from the International Monetary Fund (IMF), All Africa reported

Liberia’s performance criteria is usually reviewed by the IMF executive board. However, the observation of central government revenue collection, caps on the central bank’s direct credit to the government and central bank foreign reserve figures has been waived because of the country’s impressive economic strides.

“Liberia’s economic growth remains strong and the medium-term outlook is positive, provided new projects in the mining and plantation sectors come on stream,” Naoyuki Shinohara, IMF Deputy Managing Director and Acting Chair said in a statement.

“Non-resource real GDP growth is expected to continue to pick up in 2014-15, as the authorities continue to press ahead with the implementation of large energy and road infrastructure projects, in line with their Agenda for Transformation,” he said.

Shinohara further explained that economic reform under the EFC will still be pursued as capacity limitations have prevented full implementation of EFC program strategies. The IMF’s second review of Liberia’s EFC progress also revealed that foreign reserve figures dipped beyond expectation. By bolstering liquidity management tactics and the foreign exchange auction, the IMF is looking to prevent future foreign reserve slips.

“Financial sector reforms will continue to focus on addressing high credit risks and strengthening the legal and institutional environment to promote intermediation. Enhancing the credit reference system and establishing the collateral registry would directly help reduce credit risk,” Shinohara continued.

“In light of the recent rapid debt accumulation and large remaining external financing needs, maintaining debt sustainability will require adhering to sound debt management principles, enshrined in the new medium-term debt strategy,” he said.

All Africa noted that Liberia has committed to improving governance through accepting it’s Millennium Challenge Corporation (MCC) re-selection. The program helps to create benchmarks and governance reform policies to fit the standards and goals of a nation. Within improved governance, Liberia is looking to heighten its availability of resources.

Through phase one of the MCC process — which Liberia has completed — the country’s economic policies were examined in which the Economic Constraints Analysis (CA) informational was published outlining lacking areas and steps for infrastructural improvement.