IMF Mission to Liberia highlights crucial issues necessary for the country`s economic growth

Liberian authorities will again have the chance to engage teams from the Bretton Woods institutions in less than a week. The IMF-World Bank Spring Meetings will pave the way for authorities from Liberia to continue discussions and reach agreements on policy direction, structural economic reforms and see the finalisation of its economic programme backed by the IMF, under an Extended Credit Facility deal.

After its two week visit to Liberia meeting with Minister of Finance Amara Konneh, Central Bank Governor Joseph Mills-Jones and other government officials; the Ms Corinne Delechat led IMF member mission issued a statement lauding the country`s economic performance. Liberia`s Real GDP is estimated to grow by 8.7 percent in 2013, largely underpinned by robust growth in Iron Ore production and an escalation in both private and public investments, the mission revealed in the statement. From the reconstruction of Mount Coffee Hydro Power Plant to Private Sector Investments in roads and infrastructure, clearly Liberia`s economy is poised to grow.

However, the IMF forecasts GDP growth to even out at around 6 percent in 2014. Key budget implementation reforms have been hamstrung by revenue collections falling below targets. Furthermore, the IMF mission to the country highlighted weaknesses in the budget process, as most road contracts being undertaken were carried out without the requisite budgetary allocations. Audits nonetheless have been initiated to monitor these projects and to ensure commitments outside of budgets do not occur again.

Additionally, efforts to improve Liberian dollar liquidity management, control of exchange rate and inflationary pressures have seen closer cooperation between Liberia`s Ministry of Finance and its Central Bank to ensure efficient issuances of T-Bills and CBL bills, the IMF mission noted in the statement.

The IMF mission also commended Liberia`s improved performance in meeting some of the targets under the Extended Credit Facility such as keeping annual borrowing below 4 percent of GDP, and keeping the debt stock under 60 percent of GDP. For the fiscal year of 2014, the IMF projects Liberia`s fiscal deficit to reach 3.8 percent of GDP, as authorities have reduced current spending.

Measures to strengthen the budget process, enhancing Public Financial management, revenue collection and developing the monetary and exchange rate policy framework will form an integral part of the IMF supported reform programme until its expected conclusion in June 2014, Ms Delechat indicated in the issued statement.

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