GoL, World Bank Sign Financing Agreements Totaling US$ 40M

Monrovia, Liberia - The Government of Liberia and the World Bank on Monday, April 4, 2022, signed two financing agreements for the Liberia Investment, Finance and Trade(LIFT) project totaling the amount of US$ 40 million of which US 20 million is an IDA grant and US$20 million is a concessional IDA credit.

The agreements are part of efforts to improve the business climate through structured financing that will boost economic activities among small business enterprises (SMEs).

Finance and Development Planning Minister Hon. Samuel D. Tweah Jr., who signed on behalf of the government thanked the World Bank, its senior vice President for western central Africa and other development partners for the level of support given Liberia especially the LIFT project which is the first World Bank project that will address the structural way of business investment climate in Liberia.

‘’Today signing says a lot about the World Bank, and it is a great day that we are here to sign LIFT and I like the acronym which says LIFT is lifting Liberia. The bank guys and the Americans are good with acronyms and the best acronym in the world comes from USAID, American and the world bank” Minister Tweah said.

Hon. Tweah praised the Bank for its support to Liberia’s growth and development, especially with the LIFT project that aligned with the Pro-Poor Agenda for Prosperity and Development (PAPD).

He noted that Liberian businesses have many constraints and one of which is access to finance, adding that it is incumbent upon the government through the relevant institutions like the Ministry of Commerce, Liberia Revenue Authority, Central Bank of Liberia and the Ministry of Finance and development planning to be able to shadow those challenges and solve them.

“When we did the constraints analysis for the government of MCC in 2013, one of the major constraints that came out was access to finance and the analysis said infrastructure was a binding constringe” he added.

Hon. Tweah said Access to finance is also a problem in the country. The frame in the agriculture sector has to be prioritized because this is where we want to turn Liberia into a food security zone where most of the things we eat are grown right in Liberia.

According to him, the project will set the basis of the President's vision and government for being able to work with the bank in order to offer a better tenure.

“The project will set the vision of the President and the entire government in discharge of loan structure to different industries in the country especially in the agriculture sectors” the finance minister stressed.

For his part, World Bank Country Manager for Liberia Dr. Khwima Nthara said: “Today financing marks another important milestone in the development and partnership between the World Bank and Liberia. This is the first time the Bank is providing such a significant amount of financing to support programs for improving the investment climate for the private sectors.”

He noted that the signing is in recognition of the significant progress the government has made in stabilizing the macro-economic activities over the past years.

“In spite of the progress made, we do recognize that an improvement in macro indicators does not mean anything if it does not translate into tangible benefits for the people of Liberia, by improving their living standards. In this context, the most sustainable path to improving the people’s living standard is by creating more and better jobs and it is through more and better jobs that people can earn their incomes they need to buy whatever they need to improve their welfare”, Country Manager explained.

Nthara said through the LIFT project, the government will create a one-stop shop for business registration and licensing and automate the process so that it becomes easy to start a business in Liberia.

He indicated that the government will simplify and automate the process of exporting and importing goods by creating a national single window for trade. And the Government will establish a new national electronic payments switch system that will connect and improve the efficiency of various elements of the financial system including commercial banks, micro-finance banks, mobile money agents.

According to Dr. Nthara, the Government will establish a modern credit reference system which is necessary for banks to lend to individuals and business - through a modern credit reference system banks can easily check who has a good credit for small history to pay back loans.

However, he said, the government will provide a line of credit for small and medium enterprise (SMEs) as well as build their capacity to access markets over the next five years.

The project will directly support over 750 SME by providing a customized suite of services, including coaching, training, market linkages, investment facilitation and finance. The government will strengthen the capacity of the national investment commission (NIC) and inter-ministerial concession commission committee to attract large investors and negotiate investment agreements in order to get the best deals for Liberia.

The government will also establish the Liberia special economic zone authority that will guild the activities of establishing special economic zones and industrial parks.

Moreover, the project will be a game changer for Liberia, because it sends a loud and clear message that Liberia is open for business, making it an investor's destination of choice.

Additionally, by facilitating private sector investment, the project will contribute towards the creation of better jobs, but through the payment of taxes. It will be the main source of revenue that the government needs to improve public service.