Business & Economy

IMF approves over $82m for Liberia

Liberian President Ellen Johnson Sirleaf
Liberian President Ellen Johnson Sirleaf

The IMF has approved a Rapid Credit Facility (RCF) of $45.6 million and $36.5 million in immediate debt relief under the Catastrophe Containment and Relief (CCR) Trust for Liberia.
The IMF said in a statement released early this week that the RCF funds will support the authorities fight against the Ebola outbreak by covering urgent budgetary and balance of payments needs and strengthening international reserves. This additional financing also ought to help catalyse further assistance from the international community, preferably grants. The CCR funds will be applied to immediately repay outstanding debt.
‘The Ebola outbreak continues to cripple the Liberian economy, although the recent decline in new cases is welcome. Economic activity has decelerated significantly, and fiscal and external financing needs are more pronounced than envisaged at the time of the Extended Credit Facility (ECF) augmentation,’ said the chair and deputy managing director Naoyuki Shinohara. He added that the economy is projected to stagnate in 2014 and contract in 2015, due to the ongoing impact of the epidemic and lower investment in mining and infrastructure. He said a gradual recovery in economic activity is projected to take hold in 2016, led by a rebound in services and the pledged the Fund’s commitment to support the government to get the economy back on track.
‘The authorities remain committed to the broad objectives of the ECF-supported programme. However, programme implementation capacity has been hampered since the beginning of the crisis as the authorities focused on the emergency. Implementation of structural reforms has also been delayed by the limited functioning of the public sector due to the Ebola outbreak. Large financing gaps are estimated for 2015–16, and reserves coverage could decline significantly in 2015 in the absence of additional financing. Fund financial assistance, together with debt relief from the CCR Trust, will help boost central bank reserves to meet market demand for foreign exchange, while acting as a catalyst for additional grant financing from other official and private creditors,’ Shinohara said.

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