Liberia: On Fringes of Key IMF Program Decision, Major Loan Sign for Key Road Projects
Monrovia – In the build-up to the final decision as to whether Liberia would qualify for the International Monetary Fund(IMF) program aimed at rebuilding the country’s economy, Finance and Economic Planning Minister Samuel Tweah, has signed a US$25 million concession loan signing between Liberia and the Overseas Fund for International Development (OFID) for Cornea-Voinjama road.
The signing is part of a multimillion effort by the George Manneh Weah-led government to generate close to US$100 million for key road projects in the country.
The agreement will ensure that Liberia utilizes OFID’s Private Sector Window to support the Liberian private sector.
The OFID private sector and trade finance operations windows are a complementary means for OFID to fulfil its core mission of assisting partner countries in their socioeconomic development. Both mechanisms are important contributors to creating lasting development impact in beneficiary countries and to OFID’s financial sustainability.
Private sector activities promote economic development through financing the establishment and / or growth of productive private enterprise and encouraging the development of local capital markets. OFID provides: loans to companies for projects with developmental aims that are well defined, such as to improve industrial capacity and utilities, and strengthen infrastructure; direct equity investments or investments in private equity fund structures targeting OFID’s sectors of interest; and term loans to financial institutions for on-lending to MSMEs and to improve the capital base of banks.
Through trade finance, OFID supports private enterprises and governments by facilitating their import and export requirements. This helps address inventory and working-capital needs and improves the cross-border trade prospects of partner countries. OFID’s trade financing window provides: direct financing or participation in risk sharing programs to support financial institutions and the growth of their international trade activities; and trade financing across the value-chain, including structured commodity finance, working capital finance and pre-export finance to private enterprises or governments.
The minister who is currently in Washington attending the annual meetings of the IMF, also signed a $US20 million World Bank grant for Ganta-Tapita Road Project called SECRAMP, which is been funded by the world Bank and several other development partners through the Liberia Reconstruction Trust Fund(LRTF)using the National Road Fund to bring in private investment to the tone of US$60 million.
The IDA grant which is the part of the World Bank fund helps the world’s poorest countries. IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 38 years, including a 5- to 10-year grace period.
The government is also said to have signed a $825,320K Global Innovation Fund (GIF), an innovation fund that invests in the development, piloting and scaling of innovations targeted at improving the lives of the world’s poorest people. The fund aims to support a portfolio of innovations that collectively open up opportunities and improve lives for hundreds of millions of people across the developing world.
The SECRAMP, according to Minister Tweah will also be supported by an International Development Association (IDA) credit of US$29 million which is being arranged to jumpstart the road project which is now in procurement with yellow machines due to hit Ganta Tapita soon.
FrontPageAfrica has learned that the IMF will shortly be coming out with its decision on whether or not Liberia will be entering its program.
In the backdrop of the ongoing meetings, Minister Tweah, speaking at the Center for Global Development(CGD)at the weekend described Liberia’s descent into recession and sketched the country’s path to recovery. The minister stated that negotiations with the IMF on a new program is proceeding quite well, and assured the gathering of a turnaround soon.
The minister has been trumpeting Liberia and its opportunities while celebrating the triumph of Liberian freedom and democracy and described the ongoing patterns of disruptive politics based on lies as a risk to both democracy and investment.
The minister says he is using the opportunity to engage the Diaspora to dispel numerous lies and propaganda bandied about the government, stating that ‘perception of corruption’ are baseless because President George Manneh Weah has over committed the already limited fiscal space to many programs. So, there is very limited resources, relative to the past, for the current Government to misuse,” the minister said.
The minister, speaking to FrontPageAfrica via phone pondered why some would accuse the government of being ‘corrupt’ when it is factually and evidentially doing more with less resources?
The Minister clarified any misunderstanding that Harmonization was inflationary. Said the Minister: “Harmonization protected the income of the poor by giving them more money to people making less. It raised the income of some 15,000 workers.”
Some Diaspora Liberians, reacting to one of the minister’s presentation in Washington described the sessions as positive. Many experts agreed with the Minister that Liberia’s challenges are mainly structural and should not be politicized.
While some Liberians are hailing the progress of the government, others argue that the government should find a way to formally engage Liberians in the US to minimize their acceptance of lies and propaganda about the Government.
Said one Liberian: “I go to Liberia I see great things happening, but when I come back to the US, some Liberians here have a different view. The Government needs to engage more to change this situation.”
Most participants said they learned a whole lot the government is doing but urge a better communication of the government’s achievements.
Former U.S ambassador Linda Greenfield says she is looking forward to the President’s visit to the US to engage with US investors and key policy makers. She noted that this is also important for defeating misperceptions of the Government and she encouraged the Government to do that.