Statement by the IMF Staff Representative

Intermittent civil wars have largely destroyed Liberia's physical and economic structures and the government's capacity to devise and implement policies. Executive Directors expressed concern about the weak revenue performance, lack of progress on fiscal transparency, and accountability. They emphasized the need to accelerate structural reforms, welcomed the National Transitional Government of Liberia’s resumption of regular token monthly payments to the IMF, and suggested that continued cooperation with the IMF and implementation of sound policies will facilitate the development of a Staff-Monitored Program.

Abstract

Intermittent civil wars have largely destroyed Liberia's physical and economic structures and the government's capacity to devise and implement policies. Executive Directors expressed concern about the weak revenue performance, lack of progress on fiscal transparency, and accountability. They emphasized the need to accelerate structural reforms, welcomed the National Transitional Government of Liberia’s resumption of regular token monthly payments to the IMF, and suggested that continued cooperation with the IMF and implementation of sound policies will facilitate the development of a Staff-Monitored Program.

1. This statement reports on policy decisions taken by the authorities since the issuance of the staff report. This information does not alter the thrust of the staff report.

2. The Liberian authorities have expressed their concurrence with the staffs recommendation for a comprehensive audit of the Central Bank of Liberia (CBL), and their interest in conducting audits for all commercial banks. However, they have not yet indicated their agreement with the terms of reference for the CBL audit, proposed by the staff in line with international best practices.

3. Regarding the pricing of petroleum products, the authorities have agreed with the staffs suggestion to move to competitive bidding, and guidelines for its implementation have been submitted to the recently constituted board of directors of the Liberian Petroleum and Refining Company.

4. On cooperation with the Fund, the authorities have continued to make monthly token payments (US$50,000 per month), and have also indicated their consent to the publication of the staff report. A budget for February—June 2004 has been submitted to parliament, in line with the understandings reached with the staff. The staff has also been broadly kept informed about other fiscal developments. The CBL has provided monetary information and prudential data for the banking system to the staff, albeit with some delays.

Liberia: Report on Post-Conflict Economic Situation and Prospects for January-June 2004
Author: International Monetary Fund