The European Union (EU) has provided a 10.4 million Euro (US$13.52 million) grant to Liberia in support of the government’s decentralization program. The money, according to the EU’s Director for Western and Central Africa in European Aid, Mr. Pierre Amilhat, is direct budgetary support to strengthen the Liberian government’s decentralization process and to improve road maintenance in the country.
The EU official Wednesday, December 4, signed the grant agreement in Monrovia with Liberia’s Minister of Finance, Amara Mohammed Konneh. Speaking at the signing ceremony, Mr. Amilhat reminded the Liberian government and other EU-funded countries about the need for transparency and proper financial management of EU financial aids.
“The monies the EU gives to countries are paid by European taxpayers, and I need not to tell you about the economic challenges facing Europe at the moment,” he said.
The EU official called on partners to develop a platform of public financial management that would address the issues of transparency and accountability for the union. “Governments’ proper financial management system and good behavior will further encourage the EU to do more,” he said.
Mr. Amilhat noted that his visit to the underprivileged community of West Point Tuesday spoke a lot about how Liberia is in dire need of support to improve water and sanitation, and improve the livelihood of the people, amongst others.
Finance Minister Konneh thanked the EU for always supporting Liberia’s development programs; adding: “This agreement details the EU’s support to Liberia’s decentralization program and to capacity strengthening for the Ministry of Public Works.”
Minister Konneh clarified that the EU grant money is not captured in the government’s fiscal year 2013/2014 budget, but noted that the amount is official development assistance (ODA) that does not require legislative approval. He also praised the EU for the support and declared that the EU is the highest grant contributor to the Liberia Infrastructure Trust Fund (LITF).
Reflecting on Liberia’s economic progress to the Europeans, Konneh declared that the country’s economic growth was sustained from 2012, with estimated real GDP growth of 8.9%, led by the first full year of post-war iron ore exports, buoyant construction, and strong performance in services.
The Liberian treasury boss also briefed the Europeans that real GDP is projected to expand by 8.1% in 2013, supported by further iron ore expansion and concession-related foreign direct investment.
Though the International Monetary Fund (IMF) has estimated real GDP growth downward to 6.1% in 2013, Minister Konneh noted that the Liberian economic is on course.
He, however, pointed out that the country’s economic outlook remains vulnerable to fluctuations in commodity prices, particularly for the country’s key exports such as rubber and iron ore.
“Potential declines in foreign direct investment and overseas development assistance, including the partial drawdown of UNMIL force” he said, “could also affect economic performance.”
Mr. Konneh explained that the government saw the dire need to revisit its governance structure, which since independence in 1847, has been highly centralized, hampering local development and the equal distribution of local resources and basic services.
Centralization, the Minister asserted, led to the marginalization of a large segment of Liberia’s population who live in poverty, and fueled internal divisions.
He said the EU’s US$13.52 million grant agreement to support government’s decentralization process is echoing the government’s commitment to efficient and effective institutional arrangements by providing support.
The Minister announced that the EU is providing Euros 5.5 million (US$7.15 million) towards the decentralization agenda.
Support to the Ministry of Public Works
The EU also provided 4.9 million Euros (US$6.37 million) to the Ministry of Public Works to improve road maintenance method in the country.
Konneh observed that the Ministry of Public Works has significantly advanced its efforts to improve the road maintenance method and address the issue of overloading since 2012.
Mr. Konneh disclosed that the government expects the following results from the agreement: preparedness for the establishment of roads authority and roads fund; conduct of feasibility studies and tender documents for the rehabilitation and upgrading of three national roads: the 44km ELWA Junction-Roberts International Airport; the 127 km Monrovia to Bo Waterside road, and the Buchanan end of logging concession to Greenville, Sinoe County.