The Board of the International Monetary Funds (IMF) has given the Liberian Government US$48.8 Million to help with its programs. The approved amount is under the extended credit facility of the bank.
In its report issued this week, the reviews are part of the conditions set under the Extended Credit Facility arrangement, request for waivers of nonobservance of performance criteria and modification of performance criteria.
Due to COVID-19 pandemic coupled with some challenges, the Liberian government requested for a waiver for nonobservance of the end of December 2019 and end of June 2020..
“The policy decision by the government helped to preserve the purchasing power of the poor who were the most affected by the high inflation environment at the program’s inception,” the IMF report said.
According to the IMF, the Liberian Government has considered bringing the ECF-supported program back on track of utmost importance and are committed to their development plan, the Pro-Poor Agenda for Prosperity and Development (PAPD).
To this the IMF notes that restoring macroeconomic stability, providing a foundation for sustainable inclusive growth, and addressing weaknesses in governance remain the main objectives of this program.
Program status. The IMF’s Executive Board approved a four-year arrangement under the ECF (60 percent of quota) in December
However, according to IMF country report, there were a decline in economic activity in the first of 2020, but there are signs of recovery now emerging and inflation is moderating. The gradual growth indicators are revenue, imports as well as credit growth.
In addition to that, It clearly shows that imports in the first half of 2020 were down by about 7 percent while at the same time, there were signs of recovery in the second half of 2020. This was due largely to the global COVID-19 pandemic. There were however sharp decline in headline inflation to 14 percent in September from about 30 percent at program inception, reflecting tight monetary conditions and exchange rate appreciation as well as lower fuel prices.
In the same report, it said, there were weak economic activity which was accompanied by substantial fiscal tightening. Much improved fiscal cash management by the government, with zero overdrafts from the central bank under the program, the suspension of the surrender requirement, and higher demand for CBL bills (in response to higher monetary policy rates under the program) helped to contain growth in currency in circulation and the pressure on the exchange rate.
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