The World Bank and the Government of Liberia have signed a US$40 million financing agreement for the First Inclusive Growth Development Policy Operation (IGDPO-1) for Liberia.
The funding comes in the form of a concessional International Development Agency (IDA) credit of US$20 million and an IDA grant of US$20 million. The agreement was signed by Dr. Khwima Nthara, World Bank Country Manager for Liberia, and Samuel D. Tweah, Minister of Finance and Development Planning.
Signing on behalf of the Bank, Dr. Nthara said, “this financing could not have come at a better time for Liberia, given the fiscal challenges that the country has been facing due to many shocks.” These fiscal challenges, he noted, are likely to be exacerbated by the health and economic impact of the COVID-19 pandemic. “It is our hope, therefore, that this budget support will go some way to alleviating the situation. We plan to go back to our Board soon to seek their approval of additional support under the recently announced Fast Track Facility, to help Liberia fight the COVID-19 pandemic.” The World Bank Liberia Country Manager added that: “At the same time, the reforms supported by this operation will help spur inclusive growth and enhance the resilience of the most vulnerable people in Liberia.”
The operation focuses on boosting productivity and economic diversification by reforming agricultural input markets, expanding access to electricity and building resilience of the agriculture and energy sectors. It also supports reforms for improving the financial viability of the Liberia Electricity Corporation (LEC), reducing trade costs, streamlining tax waivers, strengthening oversight of state-owned enterprises, and improving debt management and transparency. In addition, the program will promote economic and social inclusion by facilitating access to digital financial services and building a national social safety net system, with a special focus on women and girls.
“Institutions like the World Bank should stand by Liberia and support it during these challenging times. The country’s development needs are huge and going forward the people and Government of Liberia can count on our continued support,” said Mr. Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone.
The World Bank’s Board of Executive Directors on Tuesday, March 17, approved this financing agreement for Liberia to support a series of pro-poor reforms. This is the first operation in a series of three Development Policy Operations to support the Government of Liberia in achieving sustainable and inclusive economic growth by strengthening public-sector transparency and promoting economic and social inclusion.
“Achieving inclusive growth will require macroeconomic stability, a thriving private sector and a transparent and efficient public sector,” said Marina Bakanova, World Bank Senior Economist and Task Team Leader of the IGDPO program. “The current operation supports reforms that will catalyze economic transformation and job creation through improvements in productivity and competitiveness, especially in the agricultural sector and help create an accountable public sector to promote shared prosperity and sustainable development,” she added.
Finance and Development Planning Minister, Samuel D. Tweah Jr., who signed on Government’s behalf, expressed delight and appreciated the World Bank Liberia Country Team, Accra-Ghana Team and staffs in Washington D.C. for their well-coordinated approach, which led to the successful signing ceremony.
Tweah disclosed that the financing is budget support, and not a “package” for the Corona Virus Pandemic.
“Today signing is part of 2019/2020 budget year and it is intended to buttress government’s operations, but this arrived at a time where we’re experiencing the virus,” Tweah said.
He said the government is also planning to engage the International Monetary Fund (IMF) through its Mission Chief for possible support for the country given the economic situation as a result of COVID 19 pandemic.
Meanwhile, the World Bank’s International Development Association (IDA), 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 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.6 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $21 billion over the last three years, with about 61 percent going to Africa.