IMF Chief Wants “Budget Support” For Liberia

The bang of the Ebola Virus Disease outbreak on Liberia’s economy is cumbersome and requires both local international commitments to alley the negative impact on a country that is still recovering from setbacks following long period of civil unrest.

As a way of helping Liberia deal with this scourge, the head of the International Monetary Fund (IMF) Madam Christine Lagarde has suggested to her colleagues that there is a need for more budgetary support for Liberia as short-term spending is critical during these difficult eras.

A dispatch from the US said, Madam Lagarde made the assertion when she held talks with the Liberian delegation which attended the just-ended annual meetings of the World Bank and the International Monetary Fund and other development partners in Washington DC, the United States recently.

The Liberian delegation headed by Finance and Development Planning Minister Amara Konneh also articulated clearly with the donors including the IMF, World Bank, African Development Bank, US Government, USAID, and Sweden Development Agency that Liberia was looking for new avenues of support to fight Ebola and deal with probable associated economic and social issues. The Liberian Team requested that bilateral and multilateral partners should not re-program existing commitments but rather provide injection of new funds.

The delegation then received US$48 million under Extended Credit Facility (ECF). Efforts were also made to seek and receive commitments to additional funds, specifically work towards accessing Rapid Credit Facility (RCF) as a bridging option with disbursement around March/April of next year for a similar amount as ECF (i.e. 25% of Liberia’s quota).

In meantime, the joint team of the Ministry of Finance and Development Planning (MFDP) and the Central Bank of Liberia (CBL), through an official letter to the Fund, maintained commitment to policy actions under ECF to the extent possible but keeping some focus on maximizing the opportunities under the RCF.

Additionally, proposed discussions on a new programme is expected to begin from mid next year and at the same time policy actions for RCF is proposed around repaying CBL fairly quickly to replenish reserves.  The meeting came at a time when Liberia is experiencing the worst ever outbreak of the “Ebola Virus Disease” (EVD), which has claimed many lives, posing further risk of exposure to the larger population and a severe impact on the economy.

For more than a week, Minister Konneh and his team, including Central Bank Governor Dr. Mills Jones, the President of the Liberia Bank for Investment and Development, John Davies, Deputy Central Bank Governor, Boima Kamara, Representative Munah Pelham-Youngblood, Deputy Minister for Economic Management at the MFDP, Dr. Mounir Siaplay and PFM Coordinator, Bernard Jappah, were assertive in their engagement, at some point pushing donors to accelerate their supports.

The Liberian delegation played a key role in a special “Ebola Roundtable” involving the UN Secretary General Bi Ki Moon, the World Bank President Jim Kim, IMF Managing Director Christine Lagarde, and a host of development partners. The International Finance Corporation (IFC) committed US$15 million in trade financing for Liberia banks by end of November. The fund will also cover guarantees.

In the medium term, the IFC agreed to work on the provision of finance facilities for micro and small agri-businesses. There was a consensus that this might take some time to actualize.

On the other hand, Millennium Challenge Corporation ( MCC) open to accelerate the grant funding (up to US$450 million) to support economic recovery, however their tight criteria for projects will remain, which may slow down due to the current crisis.  Also, the Liberian Delegation to the World Bank Annual Meeting held bilateral discussions with African Development Bank (AfDB)  President Donal Kaberuka.

The AfDB Presdient told the Liberian team that the Bank is ready to fast track the second disbursement of Budget Support. The disbursement would be taking place soon, with maximum flexibility. He encouraged the Liberian team to push for more budget support from the World Bank leveraging support through the United States Treasury.

He also suggested the idea of creating separate status for healthcare workers as a way of getting them out of general civil service and reducing liabilities. The current situation can be used to achieve this reform.

In the US, Minister Amara Konneh consummated a deal worth US$27 million dollars with the European Investment Bank (EIB) for the rehabilitation of the Roberts International Airport Runway. EIB also expressed willingness to work together on future pipeline projects.

Separately, the delegation met the Swedish International Development Minister who said her government had channled 10 million in aid to non-government organizations working on containing Ebola in Liberia.

The delegation held separate meetings with key partners financing existing infrastructure projects in a bid to ensure funding and implementation of these activities are not adversely affected by the crisis, the dispatch noted.