Monrovia – The International Monetary Fund (IMF) and the Liberian authorities have reached a staff-level agreement on a comprehensive set of policies to support a 40-month Extended Credit Facility (ECF) arrangement, amounting to SDR 155 million (approximately US$209 million or 60 percent of Liberia’s quota). This agreement, pending approval by the IMF’s Management and Executive Board, is intended to back the new administration’s ambitious reform agenda. The Board is scheduled to discuss Liberia’s ECF arrangement on September 25.
Gerald C. Koineyeneh, [email protected]
In an IMF release, Mr. Daehaeng Kim, the IMF’s mission chief for Liberia is quoted as saying that he was pleased to announce that the IMF staff and the Liberian authorities have reached an agreement that will facilitate the IMF’s support for the new administration’s policy reform agenda.
He said: “The IMF staff welcomes the authorities’ efforts to address immediate policy challenges and restore policy credibility. We remain committed to supporting the authorities’ implementation of key policy priorities, which include restoring fiscal sustainability, rebuilding external reserves, ensuring financial sector stability, and revitalizing a reform agenda to tackle governance and corruption issues. The authorities have developed a sound plan and have initiated essential policy actions to manage the difficult fiscal situation and address concerns related to central bank governance.”
The IMF staff team expressed gratitude to the Liberian authorities for their productive cooperation and the open, constructive policy discussions.
A Welcome Relief for Liberia
This agreement offers a significant relief to the Liberian government as the September 25, 2024, deadline approaches. The ECF arrangement will enable Liberia’s international partners to provide critical support for its public financial management system, bolster the national budget, strengthen foreign reserves, and improve the country’s credit ratings.
However, before the IMF’s announcement, there were concerns that the process might be jeopardized due to unresolved issues related to monetary policy decisions by the Central Bank of Liberia (CBL). One such issue involves the CBL’s involvement in a $3.5 million case between Bloom Bank (formerly Global Bank) and Kailondo Inc., where the CBL issued an indemnity or guarantee against the possibility of Bloom Bank losing the case. The IMF viewed this action as a potential violation of its agreement with the CBL concerning the use of the Central Bank’s reserve funds.
Although the staff-level agreement is not final and awaits approval by the IMF’s Management and Executive Board, the announcement brings temporary relief to Acting Finance Minister Anthony Myers and his team as they anticipate the final decision on September 25, 2024.
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