GOL Aims at New Economic Plan

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The Government of Liberia (GOL) has announced plans to launch a new economic roadmap for the coming year. The Economic Stabilization and Recovery Plan (ESRP) is expected to go live in January, 2015 and is projected to cost the government roughly US$174 million with key sectors of the economy including heath, education, agriculture, information communications technology and road infrastructure, targeted for public investment. It is not yet clear whether ESRP will meet the approval of the National Legislature, but it was announced last week by the Minister of Finance and Development Planning (MFDP) Mr. Amara M. Konneh, who said the measure will address some of the country’s vexing issues undermining trade and its overall economic strength.

 Liberia is hit hardest by the Ebola virus disease (EVD) outbreak in West Africa, which has killed nearly 3,000 people in the post-conflict economy and infected over 5,000.

The EVD outbreak has ruined the country’s gains over the years and posed further threats to its recovery programs.

Foreign contractors and investors have declared force majeure and left the country to avoid being infected by the virus. The economy has receded by more than six percent with real GDP growth rate dwindling to (-) 0.4 percent and many people have lost their jobs amidst reduction of public revenues and increasing spending due to the Ebola virus outbreak.

 As part of its safety measures, the government has sent thousands of workers to stay home creating further bleak posture for the economy. Speaking to reporters last week, Konneh said he has been working with his colleagues in government including development partners to address some of the incommodious issues undermining the country’s trade position and overall economic strength.

 “The result is the development of an economic stabilization and recovery plan, designed to mitigate the effects of the slump in economic activities in the short term, and institute measures to restore the economy to its former trajectory of sustained, rapid growth, consistent with our medium and long term development goals,” said Minister Konneh.

 “The government is fully committed to investing its meager resource envelope to demonstrate ownership of this plan, while we also engage our development partners to support it directly through our national budget. In fact, we have already mobilized some resources to this effect, while a significant gap remains.”

 Although many Liberians are still very skeptical about the success of the government’s new strategy judging from the unsuccessful records of other strategies including the poverty reduction strategy (PRS) and the Agenda for Transformation (AfT), which is still struggling, Minister Konneh assured that the ESRP will promote investment activities that would restore the provision of basic services currently suspended or limited as a result of the crisis.

 According to the Finance Minister, the funds will be allocated as follows: US$60 million in revitalizing the health sector and improving basic health service delivery throughout the country, in addition to ongoing support to the sector to eradicate Ebola; US$30 million in support to the educational sector, to reduce the illiteracy rate and enhance national human capacity development efforts  and  US$25 million towards conditional cash transfers, to provide a social safety net for the significant portion of the Liberian populace affected by the Ebola virus disease crisis.

 Finance Minister Konneh also announced US$35 million to the agriculture sector, which he said is the lowest hanging fruit to the economic growth and development of Liberia; US$10 million into the activities of the domestic private sector, considered the engine of growth by the government, to reverse the slowdown in economic activity and create jobs; another US$10 million to be invested in developing the ICT sector, to promote innovation and efficiency in our economy; and the remaining US$4 million will be invested in road maintenance equipment, to improve the country’s road network and thereby enhance the farm to market value chain.

 The Liberian Finance Minister explained that the government is working with infrastructure contractors, who declared force majeure few months ago to resume their infrastructure rehabilitation work. He described these projects as crucial to jumpstart the economy. “They earlier stalled these activities, citing the force majeure clause in their contracts, due to the Ebola outbreak, but things have now begun to improve so we want them back,” Konneh added.

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