The Executive Board of the International Monetary Fund (IMF), following the first review of the arrangement under the Extended Credit Facility (ECF), has granted Liberia access to US$46 million.
These funds, according to a Finance Ministry release will be used to bolster Liberia’s international reserve position, as in September 2024, the IMF Board approved a US$210 million ECF arrangement for Liberia.
This 40-month financing package is designed to support the country’s Economic Reform Agenda under the ARREST Agenda for Inclusive Development (AAID), aimed at addressing macroeconomic imbalances, strengthening debt sustainability, and laying the foundation for higher, more inclusive, and private sector-led growth, extending beyond the enclave sector.
According to the IMF, “Liberia’s economic growth has remained strong, with real GDP expected to accelerate to 5.6 percent in 2025, up from 4.8 percent in 2024. Inflation and exchange rates have remained stable, and the current account deficit has continued to narrow.”
“The authorities have successfully restored fiscal discipline, which is crucial for maintaining macro-financial stability. The public debt-to-GDP ratio has started to decline, reflecting substantial consolidation of the fiscal primary balance.
Recent progress in mobilizing tax revenues, controlling recurrent spending, and stabilizing the financial system is encouraging. The authorities’ commitment to modernizing the taxation regime, including the introduction of the VAT, will be vital in creating fiscal space for increased investment while maintaining debt sustainability,” the IMF noted.
The IMF’s February 5 statement, as quoted by the Ministry of Finance highlights, “The authorities’ renewed focus on addressing challenges in weak banks and improving governance in public institutions is promising. Tackling the large and persistent stock of non-performing loans (NPLs) remains a priority to strengthen financial stability.”
Meanwhile, the IMF Executive Board has also approved the Liberian authorities’ request for a waiver of non-accumulation of external arrears, acknowledging the minor nature of the issue and the corrective actions taken.
Following the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, made the following statement, “The Liberian authorities are making good progress in implementing sound macroeconomic policies and structural reforms.”
The program is broadly on track, and the authorities’ efforts to enhance fiscal sustainability, rebuild international reserves, and address governance weaknesses within public institutions are gradually taking effect.
