The Minister of Finance Planning and Development, Amara Konneh, has attributed the drop in Liberia’s economic growth rate in part to the drop in the prices of rubber and iron ore on the global market.
The Finance minister disclosed that the country’s growth rate declined from 8.7 percent in 2013 to 5.9 percent projected in 2014, adding: “As you know, Liberia depends on these two resources as its main source of income generation.”
He made the disclosure at the Ministry of Information regular press briefing in Monrovia on Thursday when he spoke on the current status of the Liberian economy.
Minister Konneh also named the decline in support from donors and non-governmental organizations as well as UNMIL drawdown as some of the factors that led to the drop in the country’s total growth in the period under review.
He pointed out that the Ebola virus has negative impact on economic activities and government operations, “The Ebola Virus Disease is Liberia’s worst ever disease outbreak.”
He said the Ebola outbreak also led to a serious decline in the country’s revenues and an increase in expenditure, something that led to the drop in the fiscal budget of 2014/2015 from US$559.3 million to US$473.2 million.
He blamed the decline mainly to the drop in concession activities, international trade, manufacturing and service industry as a result of the virus.
The Minister said stringent fiscal and economic measures are being put in place to manage the impact of the Ebola virus on the Liberian economy.
He said as part of those measures, the government has agreed to a one hundred percent disbursement to the health sector and instituted a freeze on non-essential expenditures on vehicles, furniture and other equipments.
Minister Konneh indicated that a 40 percent cut in foreign travel and 25 percent drop in fuel and lubricant costs were part of the fiscal measures instituted by government to manage the impact of the Ebola crisis on the economy.
Konneh also said that US$73.1 million was infused by government in the foreign exchange market to stabilize the exchange rate, while US$19 million was used to purchase treasury bills.
According to the Minister, in an effort to enhance banking sector liquidity, government paid a total of US$35.2 million domestic debt directly to banks, while US$219.4 million was expended from January to December 2014 to pay civil servants’ salaries.