The IMF completed its First Review of the Extended Credit Facility for Liberia, allowing a $46 million disbursement to bolster reserves. The IMF stresses that broad governance reforms are vital for the program’s success and Liberia’s development. The government aims for fiscal sustainability and inclusive growth, with a projected 5.6% GDP growth rate by 2025.
The International Monetary Fund (IMF) has successfully completed its First Review of the Extended Credit Facility (ECF) Arrangement for Liberia, enabling an immediate disbursement of approximately $46 million. This amount represents 13.3% of Liberia’s quota and aims to strengthen the country’s international reserves during a key period of economic recovery.
To ensure the success of this program and Liberia’s long-term development, the IMF emphasizes the need for extensive governance reforms. These reforms include enhancing revenue mobilization, rationalizing expenditures, strengthening the financial sector, and improving overall governance structures within the country.
Liberia’s efforts toward fiscal consolidation, stable economic indicators, and projected growth strategies are designed to support inclusive growth and macroeconomic stability. The government’s drive to align its fiscal policies with debt sustainability aims to create an environment conducive to development.
In 2022, Liberia initiated an ambitious economic framework known as the Arrest Agenda for Inclusive Development (AID), which the IMF aims to support financially. The total committed funds for this initiative are $210 million, to be disbursed over 14 months, highlighting attention to sustainable growth and effective governance.
Following this review, the total disbursement from the IMF to Liberia has reached approximately $51 million, which will significantly enhance the country’s financial position. The ongoing focus is centered on advancing governance reforms to foster economic resilience and stability.
The IMF projects a 5.6% GDP growth rate for Liberia in 2025, with sustainable fiscal management playing a crucial role in this outlook. The anticipated decrease in the debt-to-GDP ratio by 2027 further showcases the government’s commitment to fiscal discipline and long-term economic health.
Liberia plans to implement a Value-Added Tax (VAT) system aimed at broadening the tax base and enhancing revenue generation. This move is projected to contribute around 1.5% of GDP, aligning with regional VAT standards and fostering fiscal sustainability.
“Ongoing reforms are essential for modernizing Liberia’s tax system and boosting fiscal resilience,” stated IMF Resident Representative Joel Chiedu Okwuokei. Effective implementation of these reforms is critical for attracting investments while maintaining debt sustainability.
The recent IMF review has set the stage for Liberia’s economic recovery by approving significant disbursements tied to essential governance reforms. By focusing on fiscal discipline, effective revenue generation, and stable economic policies, Liberia is positioned for growth and development. Continued support from the IMF and collective government efforts are crucial for achieving long-term sustainability and prosperity.
Original Source: www.cnbcafrica.com
