Liberia: IMF Executive Board Approves Forty-Month US$210M Extended Credit Facility Arrangement

This support aims to assist the authorities in their reform efforts to address macroeconomic imbalances and establish a foundation for increased private-sector-led growth beyond the natural resource sector.

With the Executive Board’s approval of the arrangement, an immediate disbursement of SDR4.3 million (about US$5.8 million) will be made, helping Liberia meet its ongoing balance of payments needs, primarily due to significant and widening development gaps.

The authorities’ economic program, supported by the 40-month ECF arrangement, envisages a comprehensive policy package to strengthen fiscal sustainability and create fiscal space for investment. This will begin with rationalizing unproductive spending, followed by efforts to mobilize domestic revenue. This policy package is intended to help mitigate debt vulnerability and foster more robust and sustainable growth.

Key policies outlined in the program include: (i) reducing unproductive spending, (ii) implementing new tax measures, including a Value Added Tax (VAT), and streamlining extensive tax expenditures, (iii) increasing priority public spending, particularly on basic infrastructure, and (iv) enhancing financial stability by addressing the issue of non-performing loans. A critical goal of the authorities’ reform program is to preserve and enhance social spending, especially in the education and health sectors.