Liberia: Fourth Review Under the Extended Credit Facility Arrangement and Requests for Waivers of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Rephasing and Extension of the Arrangement—Informational Annex

This paper discusses Liberia's Fourth Review Under the Extended Credit Facility (ECF) Arrangement and Requests for Waivers of Nonobservance of Performance Criteria (PC), Modification of PC, and Rephasing and Extension of the Arrangement. The end-June 2014 quantitative PC on government revenues and central bank net foreign exchange position, and one indicative target on net domestic assets were not met. Only three out of seven structural benchmarks for the fourth review were met. Based on the authorities' corrective actions, the IMF staff supports completion of the delayed fourth ECF review, and the authorities' request for an extension and re-phasing of the program to end-December 2016.


This paper discusses Liberia's Fourth Review Under the Extended Credit Facility (ECF) Arrangement and Requests for Waivers of Nonobservance of Performance Criteria (PC), Modification of PC, and Rephasing and Extension of the Arrangement. The end-June 2014 quantitative PC on government revenues and central bank net foreign exchange position, and one indicative target on net domestic assets were not met. Only three out of seven structural benchmarks for the fourth review were met. Based on the authorities' corrective actions, the IMF staff supports completion of the delayed fourth ECF review, and the authorities' request for an extension and re-phasing of the program to end-December 2016.

Relations With the Fund

(As of October 31, 2015)

Membership Status: Joined: March 28, 1962. Article XIV

General Resources Account:

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SDR Department:

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Outstanding Purchases and Loans:

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Latest Financial Arrangements:

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Formerly PRGF.

Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):

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Implementation of HIPC Initiative: Enhanced Framework

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Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

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Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

Delivery of Debt Relief at the Completion Point:

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Implementation of Catastrophe Containment and Relief (CCR):

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Safeguards Assessment

An update safeguards assessment of the Central Bank of Liberia (CBL) was conducted in connection with the augmentation of the Extended Credit Facility for Liberia approved on September 26, 2014 and Rapid Credit Facility disbursement approved on February 23, 2015. The assessment noted the need to regain momentum in building adequate safeguards. The update recommended a medium-term plan to strengthen the CBLs financial position to support improvement in the foreign exchange reserves position as well as an update of the investment guidelines to a adequately shield the CBL from counterparty risk. The assessment also recommended a strengthening of the governance and control framework to mitigate the CBL’s financial risks.

Exchange Rate Arrangement

Liberia maintains an exchange rate system that is free of restrictions on payments for current and capital transfers. The currency of Liberia is the Liberian dollar. The U.S. dollar is also legal tender. The de facto exchange rate regime is classified as ‘other managed’ effective November 7, 2011 when the exchange rate departed from the stabilized 2 percent six-month band. The de jure exchange rate regime classification remains ‘managed floating’. The Central Bank of Liberia (CBL) intervenes in the foreign exchange market to smooth volatility. The exchange rate between the Liberian dollar and United States dollar at November 10, 2015 was L$87.5 = US$1 (mid-point between buying and selling rates).

Article IV Consultation, Review of the ECF Arrangement, and Request of the RCF Arrangement and Debt Relief under the CCRT.

The 2012 Article IV consultation discussions were held in Monrovia during September 4–21, 2012. The staff report (Country Report No. 12/340, December 2012) was discussed by the Executive Board on November 19, 2012 and is posted on the IMF website.

The third review of the three-year arrangement under the Extended Credit Facility was discussed by the Board on July 3, 2014 (Country Report No. 14/197, July 2014) and is posted on the IMF website.

Ad-hoc review under the ECF arrangement for augmentation of access and modification of performance criteria was discussed by the Board on September 26, 2014 (Country Report No. 14/299, September 2014) and is posted on the IMF website.

Request for disbursement under the Rapid Credit Facility and debt relief under the Catastrophe Containment and Relief Trust were discussed by the Board on February 23, 2015 (Country Report No. 15/49, February 2015) and is posted on the IMF website.

Technical Assistance 2013–15

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Resident Representative

A resident representative has been posted in Monrovia since April 2, 2006. Mr. Sobolev assumed the position in July 2009 and his term expired in September 2013. Mr. Amo-Yartey assumed the post as a new resident representative on May 1, 2014.

Joint World Bank-Imf Work Program, 2012–16

(As of November 23, 2015)

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Relations With the World Bank Group1

(As of November 16, 2015)

A. Bank Group Strategy

The current Country Partnership Strategy (CPS) for Liberia was discussed by the Board of the World Bank Group on July 30, 2013. The overarching objective of the CPS is to support the Government’s Agenda for Transformation (AfT) to contribute to sustained growth, poverty reduction and shared prosperity while exiting fragility and building resilience. In this regard, the CPS pillars are aligned with three key pillars of the AfT: (i) Economic Transformation to reduce constraints to rapid, broad-based and sustained economic growth to create employment; (ii) Human Development to increase access and quality of basic social services and reduce vulnerability; and (iii) Governance and Public Sector Institutions to improve public sector and natural resources governance. In addition, the CPS is focused on the themes of capacity development and gender equity both of which will be mainstreamed throughout the Bank Group’s portfolio.

The World Bank Group’s program under the CPS involves a combination of development policy lending, investment lending and analytical work in support of the strategic pillars. The IDA allocation for the lending program for the CPS period is approximately US$308 million, including IDA 16 (up to June 2014) and the full IDA 17 allocation. The majority of the IDA financing during the CPS period will focus on investment in the energy and transport sectors to help remove binding constraints to growth and improve well-being. IDA financing under the CPS will also support building institutional and human capacity essential for the effective implementation of the AfT and the country’s long-term vision plan.

The International Finance Corporation (IFC) investment over the CPS period is expected to average US$25-35 million per year. The current IFC portfolio comprises US$24.4 million in equity; US$37.3million credit and trade lines; US$13 million seed investment in the West Africa Venture Fund for direct on-lending to, or equity in SMEs (US$6.8million allocated for Liberia and balance for Sierra Leone) and US$33.5 million debt financing approved and committed to the rubber and cocoa sectors. The priority sectors for IFC’s investments include agribusiness, infrastructure including power, financial services and mining. IFC’s advisory service will include strategic engagement in investment climate improvement, education to foster employment, supplier linkages, agriculture, leasing, finance services infrastructure and private sector development.

In response to the Ebola Virus Disease (EVD) outbreak, the World Bank Group has provided extraordinary support to Liberia, well beyond the scope of the CPS including commitment of some US$177 million from the Crisis Response Window (CRW). In the wake of the Ebola crisis, the World Bank Group has undertaken a rapid review of its strategy and portfolio to ensure they remain aligned with the country’s development needs.

B. Active Projects

There are currently sixteen active2 IDA projects in Liberia, including four regional projects, with a total commitment of approximately US$562.8 million of which approximately US$208.3 million is undisbursed. One new operation has been approved for FY16 to date, for a total of approximately US$10 million of IDA credit. The new operation is summarized below.

Youth Opportunities Project (YOP) was approved on November 6, 2015 for US$10 million. The objectives of the project are to improve access to income generation opportunities for targeted youth and strengthen the government’s capacity to implement its cash transfer program. The project will directly benefit about 15,000 targeted youth aged 15–35 years. There will be 50 percent participation of vulnerable female youth. In addition, the distribution of beneficiaries across urban and rural areas will be based on the proportion of the total youth population in each area and poverty levels. Adolescents aged 15–17 years in urban areas will benefit from pre-employment social support. The project has three components: (i) Pre-employment Social Support and Household Enterprises for Urban Youth aimed at addressing youth labor market participation and behavioral constraints; (ii) Productive Public Works and Life Skills Support will provide vulnerable youth in rural areas with immediate consumption smoothing support through productive public works and life skills training and to build capacity for the implementation of household enterprise support, productive public works, and life skills training; and (iii) the Capacity Building for Cash Transfer Program aims to improve efficiency in the delivery of cash transfers to targeted households in Liberia. In particular, this component will support the building blocks for a basic safety net system, including (a) improving the process of targeting extremely poor households through the introduction of a proxy means test; (b) improving operational efficiency by strengthening ICT systems, particularly MIS and electronic payments systems; (c) refurnishing office buildings to house the information management systems; (d) ensuring the design and implementation of a functional M&E system; and (e) strengthening of social accountability and grievance redress systems.

C. Economic and Sector Work

The World Bank has completed a comprehensive Public Expenditure Review (PER), which explores various options for fiscal space enlargement. Given the large amount of additional expenditure required for the implementation of the government’s second Poverty Reduction Strategy- the Agenda for Transformation, it is critical that all options are examined to accommodate these expenditures. The PER focuses on measures for: (a) improving the efficiency of public expenditure; (b) increasing the amount of external grants; (c) mobilizing greater revenue from taxes, non-tax revenue and natural resources; and (d) public sector borrowing.

The World Bank has also completed a human development Public Expenditure Review (PER) covering the education, health and social protection sectors. Public spending on the human development sector in Liberia is low by Sub-Saharan Africa (SSA) standards. The PER therefore examines a number of key public expenditure issues affecting progress in attaining the MDGs. The Review considers the sources and levels of funding, budgetary allocations across and within the sectors, and the quality, equity and efficiency of public expenditure on human development.

The World Bank has recently completed a policy note on Jobs “Creating More and Better Jobs in Liberia: Issues and Options.” The Government of Liberia is deeply concerned by what is perceived to be relatively high rates of joblessness in an economy that is recovering from fourteen years of civil conflict. A comprehensive policy response to the Government’s concern is constrained by a lack of critical knowledge. Furthermore, traditional metrics for measuring the performance of the labor market poorly cover the dominant urban and rural informal sectors, or the extent of underemployment. The note is therefore intended to help fill the critical knowledge gap through a systematic analysis of the labor market, focusing on issues related to both the demand and supply sides. The analysis draws on quantitative information from the 2007 and 2010, Core Welfare Indicator Questionnaires Survey (CWIQS); the 2010 Labor Force Survey; the 2012 Poverty Note as well as the host of quantitative and qualitative analyses done on Liberia and in the region over the last five years. The note focuses on issues on both the demand and supply sides of the labor market as well as the effects of employment protection legislation.

D. Financial Relations (as at November 16, 2015)

Active and Disbursing Projects

(U.S. dollars)

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Amounts may not add up to original principal due to changes in the SDR/US exchange rate since signing.

IDA Disbursements and Debt Service (Since HIPC Completion Point)

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Relations With the African Development Bank1

(As of November 11, 2015)

There are 18 active AfDB projects in Liberia, in addition to projects funded by trust funds. The portfolio has a total commitment of approximately UA 292.5 million, equivalent to US$413 million, of which 25 percent is disbursed. A brief description of these projects is provided below.

1. Ebola Response Projects: The AfDB has prepared various multinational projects in response to the Ebola Virus Disease (EVD) outbreak including:

  • a. Ebola Fight Back Budget Support Program: This is a UA 100.2 million multinational program across Côte d’Ivoire, Guinea, Liberia and Sierra Leone, of which Liberia’s portion is a UA 40.2 million loan. The operation contributes towards addressing the fiscal gap created by the epidemic in the countries, supporting measures to respond to the crisis, and the need to address longer term issues to develop economic resilience.

  • b. Strengthening West Africa Public Health Systems (SWAPHS): This UA 40 million multinational project, of which a USD 11.4 million grant is directly allocated to Liberia, is intended to achieve three broad strategic outcomes: building human resource capacity and systems for emergency response and preparedness, infrastructure development, and strengthening governance and regional institutions.

  • c. Technical Assistance Crisis Response Project (USD 2.1 million grant): The project intends to build response capacity to manage potential and future outbreaks; improve private sector participation in national crisis management; and improve coordination.

  • d. Exceptional Assistance to respond to Ebola (USD 1.0 million grant): This program supports building the technical and material prevention capacity of community-level health services; case management; development and management of isolation centers; assistance management, and institutional support.

  • e. Post Ebola Recovery Social Investment Fund (PERSIF) (UA 2 million grant): This program will provide seed funding to establish a Social Investment Fund to finance demand-driven, small-scale activities on the basis of calls for proposals issued by the Fund. It is expected to play a catalytic role in improving community response to outbreaks, thereby contributing to inclusive growth, gender equality and poverty reduction in the three affected countries.

2. Integrated Public Financial Management Reform Project (IPFMRP): The AfDB’s UA 3.0 million grant support for this project was approved on September 10, 2012. Supported by four donors—the AfDB, World Bank, USAID, and SIDA—this US$28.55 million project represents an innovative approach for the Bank to support a comprehensive government program for PFM reform. By using a pooled funding arrangement, the project harmonizes support from the four donors, increasing development effectiveness while decreasing the administrative burden on the Government. The project has five components, which are mutually reinforcing: (i) enhancing budget planning and credibility; (ii) strengthening budget execution, accounting and reporting; (iii) strengthening revenue administration; (iv) enhancing transparency and accountability; and (v) project management and capacity building.

3. Regional Payment Systems Development Project: This UA 5 million supplementary grant enables Liberia to join the West Africa Monetary Zone (WAMZ) Payments System Development Project. The project aims to improve the financial sector basic infrastructure in the WAMZ region through the upgrade of the payments systems of The Gambia, Guinea, Sierra Leone, and Liberia. The project components include: Real Time Gross Settlement (RTGS) system; Retail Payments Automation (RPA), a clearing system comprising Automated Checks Processing (ACP); Automated Clearing House (ACH); Central Banking Applications (CBA) system; and telecommunication infrastructure. The project will increase participation in the formal financial sector and enhance financial flows at the regional level.

4. Liberia-Urban Water Supply and Sanitation Project (UWSSP): This UA 25.2 million grant project aims to improve Monrovia’s water and sanitation facilities. The project will: (i) provide access to adequate, safe and reliable water supply and public sanitation services in Monrovia, Buchanan, Kakata, and Zwedru; and (ii) enhance the institutional, operational, management capability, and the long-term financial viability of LWSC. The Project’s components are: (i) Rehabilitation and augmentation of water treatment and distribution systems; (ii) Provision of public sanitation facilities; (iii) Institutional support; (iv) Environmental and Sanitation Sensitization.

5. Agriculture Sector Rehabilitation Project (ASRP): This UA 18.4 million project cost is financed by a UA 12.5 million grant from the Bank, UA 3.4 million grant from IFAD, and the balance financed in kind by the Government of Liberia. The project covers eight of the fifteen counties in Liberia. The overall goal of the Agriculture Sector Rehabilitation project is to contribute to food security and poverty reduction. Its specific objective is to increase the income of smallholder farmers and rural entrepreneurs including women on a sustainable basis. The project is implemented under three components: Agriculture Infrastructure Rehabilitation; Agricultural Production and Productivity Improvement; and Project Management, with Agriculture infrastructure constituting 60 percent of the cost.

6. Smallholder Agricultural Productivity Enhancement and Commercialization (SAPEC) Project: This UA 34.08 million project will be funded by a UA 29.08 million grant from the Global Agriculture and Food Security Program (GAFSP), a UA 4.0 million ADF loan, and UA 1.0 million by in-kind contributions from the Government of Liberia. The Intervention seeks to reduce rural poverty and household food insecurity by increasing income for smallholder farmers and rural entrepreneurs particularly women, youths and the physically-challenged. SAPEC will be implemented in 12 of the 15 counties of Liberia over 2014 to 2017 and seeks to scale-up the on-going Agricultural Sector Rehabilitation Project (ASRP). The project consists of four components, namely: (i) Sustainable Crop Production Intensification; (ii) Value Addition and Marketing; (iii) Capacity Building and Institutional Strengthening; and (iv) Project Management.

7. Maryland Oil Palm Plantation (MOPP) – Private Sector: The project is located in Maryland and Grand Kru Counties in South East Liberia and entails the following (i) clearing, rejuvenating, and operating a 9,000 hectare abandoned palm oil plantation (DOPC) in Maryland county; (ii) developing two oil palms nurseries; (iii) establishing a 6,000 hectare out grower farmer scheme benefitting 750 families; and (iv) constructing an oil mill with a processing capacity of 90 tons of fresh fruit bunches per hour. The project cost totals USD 203.3 million with USD 164.9 million to finance the industrial component and USD 38.4 million for the out grower scheme.

8. Equity investment of US$1.2 million in the share capital of Access Bank (ABL): Access Bank Liberia (ABL) is a start-up microfinance bank sponsored in 2009/2010 by Access Microfinance Holding AG, with co-support by the International Finance Corporation (IFC) and the European Investment Bank (EIB). A capital increase of US$209,000 was approved in 2012.

9. Fostering Innovative Sanitation and Hygiene in Monrovia: The objective of the grant of Euro 1.2 million from the African Water Facility administered by the ADB is to increase access to sustainable and affordable sanitation services with improved hygiene and livelihood for Monrovia’s urban poor. The specific objectives include: (a) increase access to safe, sustainable and affordable sanitation services; (b) reduce the vulnerability of the urban poor populace to WASH related diseases caused by water contamination; and (c) implement an effective, efficient and sustainable FS management system with production of affordable FS fertilizer to increase scalable food security.

10. Paving Fish Town – Harper Road Project (Phase I): The objective of the Project is to provide efficient road transport access to South East Counties of Liberia and, by extension, to neighboring Mano River Union States. The project will involve upgrading from gravel to bitumen standard the Fish Town–Harper Road (Phase 1): Harper–Karloken section (50km) at an estimated cost of UA 43.04 million including GoL counterpart funding of UA 1.0 million. The expected outcomes include: (a) improved socio-economic inclusion of population in south-east region; (b) attraction of investments with employment creation and stronger government presence; (c) facilitated cross-border trade in MRU member states; and (d) employment generation during construction and post construction phase.

11. Mano River Union (MRU) Road Development and Transport Facilitation Program: The MRU Road Development and Transport Facilitation program will upgrade to bitumen standard 276.35 km of roads in eastern Guinea, West and South-West Côte d’Ivoire, and eastern Liberia. The Program will be executed from June 2015 to June 2019 for an estimated net total cost of UA 221.97 million. Liberia’s portion, covering Karloken-Fish Town (80 km) and Harper-Cavalla junction (16 km), is a UA 76.88 million loan from ADF and TSF. The project will also include the construction of joint border control posts.

12. Regional Electricity Interconnection Project: Cote d’Ivoire, Liberia, Sierra Leone and Guinea (CLSG). The CLSG electricity interconnection project will construct a 1,357-km-long double circuit high voltage (225 kV) line to connect the national networks of the four countries. This line is part of the backbone of the Mano River Union countries and one of the priority projects of the West African Power Pool (WAPP) Master Plan. The project will help establish a dynamic electric power market in the West African sub-region and secure power supply for participating countries which have a comparative advantage in importing power rather than producing it domestically. The project, estimated at an overall cost of UA 331.51 million, will be implemented over the 2014–17 period. The contribution of the Bank Group (ADF, FSF and NTF) amounts to UA 128.15 million (or 38.7 percent of the total cost). Some 24 million residents in the impact area will benefit from reliable electric power at competitive cost. The project will raise the average electricity access rate in the four countries from 28 percent in 2012 to 33 percent by 2017. The increased electricity access will contribute to improving the welfare of the beneficiaries and lead to the development of social and income-generating activities.

13. Technical Assistance from Fragile States Facility and other Trust Funds:

  • a. LEITI - Phase II: US$409,000 grant assistance for Multi-Stakeholders Group costs; communication and outreach, staff training and capacity building of actors involved in extractive industries transparency related activities.

  • b. Institutional Development and Capacity Building Support to the Governance Commission: UA 438,338 grant assistance to strengthen the capacity of the Governance Commission and to accelerate the implementation of governance reforms.

  • c. Promoting local, participatory governance for County Development Funds: UA 180,000 grant to minimize corruption and ensure effective delivery of development initiatives in the 15 counties of Liberia by: (i) increasing the public’s awareness of the two major funds—County Development and Social Development Funds—allocated for development in the counties; (ii) building the capacity of 750 youths to engage decision makers and managers of the funds; and (iii) actively participating in the planning, monitoring, and reporting on the funds.

Capacity Building and Technical Support to the National Housing Authority: UA 240,000 grant to develop capacity for architects, engineers, draftsmen and surveyors to oversee effectively the design and implementation of housing projects. The capacity building will also improve internal functions like budgeting, monitoring, procurement and financial reporting and IT system.

Statistical Issues

(As of November 30, 2015)

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Liberia: Table of Common Indicators Required for Surveillance

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Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).


Prepared by the World Bank.


Includes effective and or disbursing operations.


Prepared by the African Development Bank.


Enhanced Data Dissemination Initiative (EDDI) phase 2 funded by the UK Department for International Development-supported.

Liberia: Fourth Review Under the Extended Credit Facility Arrangement and Requests for Waivers of NonObservance of Performance Criteria, Modification of Performance Criteria, and Rephasing and Extension of the Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Liberia
Author: International Monetary Fund. African Dept.