This paper presents Liberia’s Request for Disbursement Under the Rapid Credit Facility. The economic impact of the pandemic is hitting the poorest with little social safety net, and food security of those relying on uncertain daily income is a pressing concern. The authorities have responded by taking revenue and expenditure measures to support emergency food aid for the poor; improving monitoring and control of spending; and safeguarding scarce foreign exchange reserves. Preliminary data suggest that performance under the Extended Credit Facility-supported program has been weak, though the authorities are fully committed to address the weaknesses. In order to address the shortage of Liberian dollars and the growing need for more US dollar liquidity, the authorities have contracted the printing of additional Liberian dollar bank notes and are formulating measures for inclusion in the FY2021 budget to augment US dollar liquidity.
In direct response to the COVID-19 crisis the
International Monetary Fund (IMF) Executive Board has adopted some immediate enhancements to its Catastrophe Containment and Relief Trust (CCRT) to enable the Fund to
provide debt service relief for its poorest and most vulnerable members. The CCRT enables the IMF to deliver grants for debt relief benefiting eligible low-income countries in the wake of catastrophic natural disasters and major, fast-spreading public health emergencies.
The Fund’s existing facilities for low-income countries (LICs) provide a vehicle for the speedy provision of financial assistance to member countries hit by natural disasters, either through the Rapid Credit Facility (RCF) or through augmentation of the funding already being provided through other facilities such as the Standby or Extended Credit Facilities. The quick disbursement of funds strengthens national financial capacity, including external payments capacity, to tackle relief and recovery challenges.
To address catastrophic disasters, the Fund created a mechanism in 2010 to provide additional relief to its poorest and most vulnerable member countries to help meet their exceptional balance of payments needs. Under this mechanism, the Fund can provide grants from a trust fund—the Post Catastrophe Debt Relief (PCDR) trust—that are used to pay off debt service falling due to the Fund. These grants ease pressures on the member’s balance of payments and create financial space by reducing its debt service burden.
This paper proposes reforms to this mechanism to cover situations where the member is experiencing an epidemic of an infectious disease that constitutes a significant threat to lives, economic activity, and international commerce across countries.
The HIPC Initiative and MDRI are nearly complete with 35 countries having already reached the completion point under the HIPC Initiative. One country, Chad, remains in the interim phase. Debt relief under the Initiatives has substantially alleviated debt burdens in recipient countries and has enabled them to increase their poverty-reducing expenditure by two and a half percentage points between 2001 and 2013.
Creditor participation in the Initiative has been strong amongst the multilateral and Paris Club creditors; however participation from the other creditor groups still needs to be strengthened. The total cost of debt relief to creditors under the HIPC Initiative is currently estimated to be US$75.0 billion, while the costs to the four multilateral creditors providing relief under the MDRI is estimated to be US$41.1 billion in end-2013 present value terms.
This paper presents key findings of the First Review for Côte d'Ivoire under the Extended Credit Facility. Program performance at end-2011 was broadly satisfactory. All quantitative performance criteria for end-2011 were met, but the implementation of structural reforms has been mixed. Although good progress has been made to strengthen public financial management, improve the business climate, and reform the cocoa-coffee sector, action on other benchmarks for the financial and energy sectors fell short of program targets. Prospects for 2012 are favorable, notwithstanding the weak external environment.
This report provides an update on the status of implementation, impact, and costs of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
Debt relief provided under the Initiatives has substantially alleviated debt burdens in recipient countries. Through the continued use by IDA and the Fund of the flexibility available in the framework governing the HIPC Initiative and the MDRI, significant progress has been achieved under the Initiatives since the last report.
The Liberia Poverty Reduction Strategy (LPRS) was completed in March 2008. Since reaching the decision point in March 2008, Liberia has maintained macroeconomic stability. The global financial crisis adversely impacted Liberia shortly after the LPRS was released. Investments were postponed, and export revenues were sharply reduced in the rubber sector as external demand weakened. The authorities’ strict adherence to a cash-based balanced budget, in place since February 2006, has contributed substantially to regaining fiscal discipline, putting debt on a downward path while also increasing pro-poor expenditures.
This paper reviews the Enhanced Initiative for Heavily Indebted Poor Countries (HIPC) Initiative for Liberia. Performance under the Extended Credit Facility (ECF)-supported program is solid. The third ECF review was completed on a lapse of time basis on December 18, 2009. All but one of the quantitative performance criteria (PC) for the end-June 2009 test date were observed. The PC on total revenue collection was not observed but the deviation was temporary and did not jeopardize program objectives. Structural reform commitments were largely met, though some with delays.
This report provides an update on the status of implementation, impact and costs of the Enhanced Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). With a view to the upcoming Financing for Development meetings in Doha, the report not only reports on recent progress since mid-2007, but also on developments since the Monterrey Consensus recommendations on external debt relief.
This paper presents an assessment of Liberia’s eligibility and qualification for assistance under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The macroeconomic framework underlying the Debt Relief Analysis (DRA) in this paper was updated to reflect discussions on the policy framework underlying a proposed three-year Poverty Reduction and Growth Facility/Extended Fund Facility (PRGF/EFF)-supported program. Finally, this study discusses the floating completion point triggers. Fiscal policy has been anchored on a balanced cash-based budget. The government has also implemented other measures to address long-standing problems in financial management and economic governance.