IMF supports Liberia with post-Ebola PFM reform

4 Nov 15

The International Monetary Fund has advised Liberia to strengthen its public finance management, debt sustainability and international reserves as the economic impact of the Ebola outbreak lingers.

The recommendations were made as part of the IMF’s fourth review of its extended credit facility ‒ which provides medium-term financial support to low-income countries ‒ for the west African country. This has been supporting the Liberian government’s economic programme since 2012.

Carlo Sdralevich, IMF mission chief for Liberia, said: “Ebola has been defeated, but Liberia’s economic situation remains challenging. Reflecting the scaling up of spending to address the epidemic, the overall government deficit (including off-budget expenditures) increased to 8.1% of gross domestic product in the financial year of 2015, from 1.9% in 2014.”

Ebola first hit Liberia in March 2014. The country recorded over 10,000 cases of the virus, and is said to have been the worst affected by the epidemic, which consumed West Africa last year. Over 4,500 Liberians lost their lives, and the World Bank has estimated that around $540m in gross domestic product was foregone.

The IMF team met with the Liberian president Ellen Johnson Sirleaf, finance minister Amara Konneh, central bank executive governor Joseph Mills Jones and other high-level government officials and representatives of the private sector and donor community.

Sdralevich expressed “deep appreciation” for the quality of the policy dialogue. He said: “Discussions focused on policies to support growth in the current difficult environment, and in particular actions to improve public financial management, maintain a sustainable level of public sector debt, rebuild international reserves and strengthen financial sector regulation and infrastructure.”

Subject to approval by the IMF’s management and executive board next month, Liberia looks set to receive around $11m under the ECF provided that economic performance remains strong.

The board will also examine the Liberian authorities’ request to extend the ECF arrangement until the end of 2016.

The current ECF arrangement for Liberia, approved in 2012, will provide the country with a total of $78.9m over three years. Liberia has also held previous ECF arrangements with the IMF.

Liberia also received a $46m disbursement under the IMF’s rapid credit facility, $36.5m from its trust for disaster recovery, and a share of $130m for the worst hit countries to help it cope with the Ebola epidemic.

The country is now thought to be Ebola-free after two consecutive incubation periods of 42 days passed without anyone in the country presenting with the virus. However, the health system continues be on the look out for new cases and to take precautions to prevent transmission in the country. 

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