Managing Director Dominique Strauss-Kahn said November 12 that the IMF has secured sufficient financing pledges from member countries to allow it to provide debt relief to Liberia. When these pledges, totaling about $842 million, are formalized, a process will be followed of arrears clearance and new IMF financing that will enable the writing off of Liberian debt to the Fund. Hailing the “breakthrough” in financing, Strauss-Kahn said it represented “a critical step in moving Liberia onto a path toward comprehensive debt relief.” He said the IMF would continue to support postconflict recovery in the country, “building on Liberia’s many achievements over the past two years.”
Strauss-Kahn thanked IMF member countries for “generous support,” citing “efforts of many leaders around the world,” including low-income countries, in securing the financing. He also acknowledged the roles played by Liberian President Ellen Johnson-Sirleaf and her economic team, and World Bank President Robert Zoellick.
Johnson-Sirleaf took office in January 2006, leading a country that was emerging from a 14-year civil war that had ended 3 years earlier. The latest IMF staff report on the country’s economy says economic activity remains buoyant, with GDP growth projected at around 8 percent in 2007.
Strauss-Kahn noted that, despite difficult postconflict circumstances, the Liberian government had established an encouraging track record of macro-economic management and reforms that the IMF has supported through technical assistance and policy advice.
“IMF staff are currently finalizing discussions with the Liberian authorities on a three-year IMF-supported program, so that Liberia can build upon the initial economic recovery, maintain the strong growth needed to reduce poverty, and restore debt sustainability,” Strauss-Kahn added.
The agreement follows talks between the IMF and the Liberian government during the IMF-World Bank Annual Meetings in October. Former IMF Managing Director Rodrigo de Rato said in an October 18 statement that it was “urgent that the international community make progress in moving Liberia onto the path toward debt relief.” De Rato said the effort hinged on securing the resources needed to provide debt relief to the country.