IMF Executive Board Approves US$ 50M for Liberia COVID-19 fight

The Executive Board of the IMF at a meeting on Friday, June 5, 2020, approved the disbursement of SDR 36.2 million equivalents to US$ 50million or 14 percent of quota under the Rapid Credit Facility (RCF) to Liberia to help address the emergency financing needs stemming from the COVID 19 pandemic.

The Board in communication to Finance Minister Samuel D. Tweah Jr. welcomed Liberia's intent to seek debt relief under the G-20 Debt Service Suspension Initiative (DSSI).

Accordingly, Directors in their deliberations noted that the COVID 19 pandemic poses significant risks to Liberia’s population and threatens to derail the country’s reform.
The IMF Board of Directors underscored the need for accountable and transparent use of COVID-19 related funds to ensure that much-needed relief reaches the targeted population and help strengthen donors’ confidence.

Directors also welcomed Liberia’s commitment to publish spending reports and procurement contracts and subsequently audit those expenses. Directors recognized that Liberia has made significant strides to strengthen public financial management.

However, the Directors welcomed swift and decisive measures adopted by the government to assuage the economic impact of the pandemic including to increase resource allocation for food security and to protect local firms.
Moreover, Directors urged the government to resume the reform agenda, under the Extended Credit Facility (ECF) arrangement once the pandemic abates. They view the ECF as critical to restoring macroeconomic stability and durable growth.

Directors at the meeting embraced Liberia’s commitment to fiscal consolidation, including domestic revenue mobilization and expenditure re-prioritization, while in the same vein took positive note of the recent passage of instruments to increase excise on fuel as well as government commitment to centralize revenues accruing to state-owned enterprises (SOEs) into the consolidated revenue account.

Also, the Board of Directors expressed the need for the government to safeguard financial sector stability, by encouraging them to reinstate prudential standards for loan classification and provisioning, while at the same time monitoring non-performing loans.

The Board communication revealed that Directors welcomed recent steps to restore confidence in the banking system, including the hiring of a firm to ensure the adequate supply of Liberian dollars banknotes to avoid shortages during peak seasons.

The Board of Directors urged the government to prioritize the finalization of the comprehensive COVID-19 national response plan, which would be vital to addressing the pandemic and attracting more donor resources.