IMF to Back Liberia with Debt Relief and New Financing
The IMF has announced a series of measures to support Liberia with debt relief and new financing.
Over the past two years, the Liberian government has implemented significant reforms to rebuild its economy and reduce poverty after a ruinous 14-year civil war. On March 14, Liberia took another important step toward reintegrating with the global economy: it cleared its longstanding overdue obligations of $888 million and normalized its financial relations with the IMF.
In response, the IMF’s Executive Board agreed to restore Liberia’s voting rights in the IMF and its eligibility for IMF resources; provide financial support totaling $952 million under the IMF’s Poverty Reduction and Growth Facility and its Extended Fund Facility; and offer debt relief, along with other creditors, to cover at least $4.4 billion of Liberia’s $4.7 billion debt. These measures should help catalyze support for Liberia from the donor community.
The IMF has actively supported efforts to rebuild Liberia’s economy since Ellen Johnson-Sirleaf (above), Africa’s first elected female head of state, took office in 2006.
New Study on African Trade
Sub-Saharan Africa’s share in global trade has declined since 1970. But the region is benefitting from the recent commodity boom, which has reoriented its trade toward Asia’s rapidly growing emerging economies, such as China and India.
A new IMF study, Sub-Saharan Africa: Forging New Trade Links with Asia, analyzes the trade patterns emerging in sub-Saharan Africa and finds that the region is performing below its export potential.
To help realize the region’s full trade potential, the study recommends policies to maintain macroeconomic stability, build infrastructure, reduce the cost of doing business, liberalize trade, and reduce shipping costs.
Côte d’Ivoire Receives $66 Million in Postconflict Assistance
The IMF Executive Board approved in April $66 million in emergency postconflict assistance for Côte d’Ivoire to help strengthen the country’s foundation for sustained recovery. IMF First Deputy Managing Director John Lipsky praised the country’s progress toward achieving reunification and peace, saying that “a climate of political dialogue is evident, and the improved security situation is beginning to pay off in better economic outcomes.”
Bangladesh Receives $217 Million in Emergency Assistance
The IMF’s Executive Board approved on April 2 a disbursement of $217 million in emergency assistance to Bangladesh to help the country cope with damage from a November 2007 cyclone that had followed severe monsoon-related flooding.
IMF Deputy Managing Director Takatoshi Kato noted that the damage to the country’s agricultural sector would reduce economic growth in FY2008. “The balance of payments has been adversely affected by the disasters, largely owing to a substantial rise in food imports,” he said, adding that support from the IMF and others in the international community would be crucial.