Introduction
The International Monetary Fund (IMF) has recently characterized Liberia’s ARREST Agenda—valued at US$8.4 billion—as “unrealistic” and potentially destabilizing. The IMF warns that reliance on non-concessional borrowing and external financing could jeopardize macroeconomic stability and external sustainability. While fiscal caution is a hallmark of IMF policy advice, this critique underestimates Liberia’s development imperatives and misrepresents the viability of the ARREST Agenda.
This article argues that the IMF’s position is overly conservative, risks perpetuating underdevelopment, and fails to recognize Liberia’s sovereign right to pursue bold, transformative growth strategies.
1. Ambition Is Not Unrealism
The IMF conflates ambition with impracticality. Liberia’s infrastructure, education, and healthcare gaps are vast, requiring large-scale investment to break cycles of poverty. The ARREST Agenda is ambitious because Liberia’s challenges are immense. To dismiss the plan as unrealistic is to ignore the urgency of Liberia’s development needs and the political mandate of the Unity Party to deliver transformative change.
2. External Financing Is a Strategic Lever
The IMF highlights declining donor support and reduced U.S. aid as reasons to scale down. Yet this overlooks evolving trends in global development finance:
– Private capital and impact investment are increasingly directed toward frontier economies with clear development strategies.
– Public-private partnerships (PPPs) provide sustainable models for infrastructure financing without overreliance on concessional aid.
– Regional precedents—such as Rwanda and Ghana—demonstrate that well-governed states can mobilize billions through blended finance and sovereign instruments.
Liberia’s reliance on external financing is not a weakness; it is a strategic lever to accelerate growth while diversifying funding sources.
3. Domestic Resource Mobilization Is Already Significant
The IMF urges Liberia to increase domestic contributions. Yet the ARREST Agenda already allocates 30% (US$2.52 billion) from government revenue. For a low-income country, this is a substantial commitment. Demanding “substantially more” risks overburdening citizens with taxation, stifling private sector growth, and undermining social stability. Liberia’s fiscal effort should be recognized, not dismissed.
4. Borrowing Can Be Productive, Not Destabilizing
The IMF frames non-concessional borrowing as inherently destabilizing. This is misleading:
– Borrowing directed toward productive infrastructure—roads, energy, education—expands future revenue streams and strengthens debt sustainability.
– Liberia’s debt-to-GDP ratio remains manageable compared to regional peers.
– Strategic borrowing is a development accelerator, not a liability, when paired with fiscal discipline and transparent governance.
The IMF’s blanket caution against borrowing risks denying Liberia the very tools needed to escape low-income status.
5. IMF Conservatism Risks
Perpetuating Dependency
By urging Liberia to “scale down” and reprioritize, the IMF effectively advocates for low ambition and slow progress. This approach:
– Keeps Liberia dependent on piecemeal aid projects.
– Ignores the Unity Party’s democratic mandate to deliver bold development outcomes.
– Undermines Liberia’s sovereign right to pursue a growth strategy tailored to its unique needs.
Liberia cannot afford to remain trapped in cycles of minimal progress dictated by external conservatism.
6. Reprioritization Should Mean Innovation, Not Retreat
The IMF admits the ARREST Agenda is “well-conceived and appropriately tailored to Liberia’s development needs.” Yet it paradoxically calls for scaling down. If the strategy is sound, financing mechanisms should be strengthened—not abandoned. Liberia should:
– Diversify financing through sovereign bonds, diaspora bonds, and regional development banks.
– Enhance implementation capacity.
About the Author:
Othello S. Tarbah is the Director-General of the Legislative Budget Office and an adjunt instructor of Economics at the University of Liberia. His professional background includes senior leadership roles at the National Port Authority and international service on the Advisory Council of the African Network of Parliamentary Budget Offices. He also leads the Shrine of UL Professionals, a prominent research and policy think tank.
With an MBA and B.Sc. in Economics, Mr. Tarbah holds advanced diplomas in Financial Management from Duke University and the Kenya School of Government. His expertise is specialized through post-graduate training in Port Management from Antwerp and various technical certifications from the World Bank Institute and the US CBO Budget Staff Institute.
