Abstract
First and Second Reviews Under the Extended Credit Facility Arrangement, Request for Waivers of Nonobservance of Performance Criteria
1. This staff statement does not alter the thrust of the staff appraisal in the staff report but is intended to update on recent developments and provide confirmation on selected issues.
2. The authorities completed the remaining prior action on the financial sector reform plan. In consultation with Staff, the Central Bank of Liberia (CBL) Board adopted a financial sector reform plan on December 15, 2020. The authorities continue to seek remaining funding for the plan and will continue to work closely with experts from the U.S. Treasury to ascertain the financial viability of the plan. Risks to the plan, including fiscal risks, thus remain.1 However, the plan discusses contingency measures and shows the authorities’ commitment to mitigate a re-emergence of U.S. dollar liquidity needs in the banking sector.
3. The CBL has adopted a currency management plan. The next step is to seek an approval from the National Legislature to secure the first batch to meet demand for 2021.
4. The authorities continue to make progress on the structural reform agenda. The Payroll Cleaning Taskforce continues to work diligently to complete the verification of biometric identification; as of December 11, 2020, the Taskforce has verified 87 percent of public sector employees.
The program budgets for fiscal costs related to the plan (LOI, ¶11), but there is uncertainty around these estimates.