The Board of Directors of the Millennium Challenge Corporation (MCC) has retained Liberia as a compact member.
According to the MCC Board, Liberia was retained as a result of the government’s gains in MCC benchmarks.
A statement issued by the MCC Thursday, December 12, said it has monitored government’s performance on major governance indicators of the MCC, which is supervised by the Steering Committee of the MCC, comprising of several ministries and agencies, as well as some of its development partners.
The Government of Liberia has meanwhile welcomed the decision of the Board of Directors of the MCC to retain Liberia as a compact eligible country.
According to Finance Minister Amara M. Konneh, the MCC’s governance benchmarks are in alignment with the Liberian government’s governance reform policies and national aspirations. The Government says it will exert all efforts to improve its governance performance and will also continue to scale up its commitment of the requisite resources.
The committee is chaired by Liberia’s Minister of Finance Amara M. Konneh. A few years ago, President Ellen Johnson Sirleaf established the MCC Steering Committee and charged it with a mandate to prioritize continued governance reforms and focuse on improvement in actual performance indicators.
As a result of the Committee’s oversight, the Government says it has shown improvement over most of its key performance indicators over the past years and remains committed to continuing such performance improvement over the next year with the goal of exceeding the median threshold performance of other low-income countries.
The government has also reaffirmed its commitment to achieving the following four governance policy objectives including the protection of up to 13% of Liberia’s biomes within the next two years: improvement of the control in the trafficking of persons, and the reform of civil libel laws through the decriminalization of civil libel. The Government has also assured the public of its commitment to continuing the improvement of its performance on such governance indicators as economic freedom, investing in people, and ruling justly.
In fulfillment of its commitment to successfully complete the MCC compact development process, the Government has established since May 2013, a country Core Team with the responsibility to implement the compact development process in collaboration with the MCC.
The team has already successfully completed Phase1 of the process by producing an Economic Constraints Analysis (ECA), which is available to the public on the Ministry of Finance’s website).Furthermore, the team has under taken national consultations on the findings of the Constraints Analysis in Monrovia and four provincial cities: Tubmanburg, Kakata, Gbarnga, Ganta, Zwedru, and Voinjama.
Based on the ECA findings and the national consultations, initial project proposals have been submitted to the MCC covering roads and electricity. These concepts, according to the government, were discussed by the Core Team and the MCC in Washington DC, in November 2013.
The Government has also announced that it has now embarked on developing a more comprehensive and in-depth proposal for submission to the MCC, by early 2014.
In a separate development, the Executive Board of the International Monetary Fund (IMF) has completed its review of the Extended Credit Facility (ECF) for Liberia, enabling the disbursement of US$11.4 million as part of support to Liberia’s financial sector.
The latest approval brings to roughly US$34.2 million in IMF financing under the ECF arrangement since its adoption on November 19, 2012 by the IMF’s Executive Board.
In completing the review, the Board approved the waiver for the nonobservance of the performance criteria on the floor on revenue collection of the central government, the ceiling on Central Bank of Liberia's gross direct credit to the government, and the floor on foreign reserves of the CBL.
Speaking after the decision, Mr. Naoyuki Shinohara, Deputy Managing Director of IMF and Acting Chair, said "Liberia's economic growth remains strong and the medium-term outlook is positive, provided new projects in the mining and plantation sectors come on stream.”
“Non-resource real GDP growth is expected to continue to pick up in 2014-15, as the authorities continue to press ahead with the implementation of large energy and road infrastructure projects, in line with their Agenda for Transformation,” he said
The IMF official, however, noted: "While the authorities remain fully committed to reforms underpinned by the ECF arrangement, institutional and capacity constraints have affected recent program performance. Deviations in government revenue and domestic financing were minor, but foreign reserves fell below the program floor reflecting in part, higher intervention in the foreign exchange market to mitigate depreciation pressures. The authorities are taking appropriate action to rebuild an adequate reserves buffer, by strengthening the foreign exchange auction and enhancing liquidity management.”
"Action is being taken to strengthen budget execution while scaling up public investment. The authorities have identified savings in the FY2014 budget to be able to meet their deficit target while protecting capital spending. They are also enhancing cash management through establishing a Treasury Single Account. Timely approval of annual budgets, together with careful prioritization and preparation of investment projects, would help remove implementation bottlenecks.
In response to these developments, Finance Minister Amara Konneh, praised the team working on both efforts and cited the government’s continued commitment to engaging with the MCC and following up on the recommendations from the IMF.
“The progress we have seen from these two programs is indicative of this government’s desire to strengthen our fiscal and growth programs, while remaining compliant with the various rules and requirements enshrined in these programs. There are challenges but we are working very hard to deal with them, in spite of the many constraints we face.”