The World Bank Group and the Liberian Government have penned two financing agreements extending US$30 million to the Government of Liberia to help with the country’s recovery program through the budget, amidst the Ebola outbreak.
The money will also help support Liberia’s medium-term strategy to strengthen its transparency and accountability mechanisms, expand the economy, increase access to quality education and improve health services that are critical to fighting the current Ebola epidemic.
The financing, which is also expected to support the Second Poverty Reduction Support Operation (PRSDPO II), includes a US$20 million International Development Association (IDA) credit and a US$10 million grant allocated from the World Bank Group’s IDA Crisis Response Window.
The IDA is designed to help low-income [poorest] countries respond to exceptionally severe crises in a timely, transparent and predictable way.
Speaking at the signing ceremony in the conference room of the Ministry of Finance &Development Planning (MFDP) in Monrovia on Thursday, November 20, World Bank Country Manager, Ms. Inguna Dobraja, said the Second Poverty Reduction Support Operation is the second in the programmatic series of four single trench operations to support the implementation of the government’s programs approved by the World Bank Board of Directors on November 12, 2014.
She explained that although the original amount of this World Bank budget support operation to Liberia was US$10 million, the Bank realized the enormous economic challenges the Ebola outbreak has created on almost all government development programs and activities.
“Therefore, the Bank decided to increase the amount of budget support to US$30 million, including US$10 million grand funding from a special IDA Response Window,” said Ms. Dobraja.
“The World Bank is mobilizing nearly US$1 billion in financing for the three countries hardest hit by the Ebola crisis: US$518 million for emergency response and to help speed up the development of foreign health workers to affected countries. The funding is helping the three countries hardest hit by the epidemic to contain the spread of infections, help communities cope with the economic impact of the crisis and improve public health systems,” she added.
“Of the US$518 million,” Ms. Dobraja said, “US$117 million is already disbursed to countries and implementing agencies, including US$52 million for Liberia.” The World Bank Country Manager pledged the Bank’s commitment to continuing its financial support to Liberia during and after the Ebola crisis.
The Liberian economy has been hit hard by the Ebola epidemic and the related health crisis, significantly slowing down economic activities, declining investments in various sectors and increasing unemployment.
“Our economy is struggling to adjust to the impact of the Ebola epidemic and this budgetary support provided by the World Bank Group is going to help us finance budget deficit and get the economy running,” said Finance Minister Amara M. Konneh.
Minister Konneh disclosed that government and partners have re-adjusted the nation’s gross domestic product (GDP) downward for 2014, from 2.5 percent to 0.4 percent.
With economic growth now in negative, Minister Konneh called for increased fiscal discipline in government and increased external budgetary support to finance the deficit.
“Our economy is at crossroads. It now calls for strict adherence to fiscal discipline by public officials,” he said. Mr. Konneh, however, clarified that economic decline is not due to bad government policies, but the Ebola virus outbreak.
“We appreciate the World Bank Group’s support to the worst Ebola-affected countries-Liberia, Guinea and Sierra Leone amidst the huge fiscal deficit, declining revenues and increased public spending caused by the Ebola outbreak,” he added. Konneh acknowledged the World Bank as the largest donor to the Government of Liberia during this Ebola epidemic.
The nearly US$1 billion that the World Bank Group is mobilizing for countries hardest hit by the Ebola crisis, includes more than US$500 million for the emergency response and to help speed up the deployment of foreign health workers to the countries, and at least US$450 million from the International Finance Corporation (IFC), a member of the World Bank Group, to enable trade, investment and employment in Guinea, Liberia and Sierra Leone.
The US$10 million grant agreement signed on Thursday is part of the PRSDPO II part of previous pledges from the Bank Group for the emergency response to Ebola.
The Ebola epidemic, centered in West Africa, has infected more than 13,000 people and killed nearly 5,000.
The World Bank’s International Development Association (IDA), which was established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa.
Resources from IDA bring positive change for 2.8 billion people living on less than US$2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about US$18 billion over the last three years, with about 50 percent going to Africa.