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Liberia: IMF Clears Arrears
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Liberia Government (Monrovia)
PRESS RELEASE
14 March 2008
Posted to the web 14 March 2008
The Government of Liberia is pleased to announce that today Liberia cleared its arrears of SDR 543 million, or nearly US$890 million to the IMF and reached the Decision Point (or point at which interim debt relief is provided) under the Enhanced Heavily Indebted Poor Country (HIPC) Initiative. The decision will come into effect after the World Bank's Board meets on March 18. Until today, Liberia had been in arrears to the IMF since 1984.
Liberia is now a fully paid up member of the IMF with full voting and related rights and access to IMF financial resources for the first time in twenty-four years. These Board decisions followed the clearance of Liberia's large arrears as well as payments for its quota increase from a bridge loan provided by the Government of the United States of America. All sanctions by the IMF against Liberia have been removed.
Following the formal removal of all sanctions against Liberia, the IMF's Executive Board also approved new financing arrangements under the Poverty Reduction and Growth Facility and Extended Fund Facility in support of the government's economic program covering 2008-10. The IMF's Executive Board decision now paves the way for Liberia to start receiving interim assistance to reduce its debts to the IMF. It also paves the way for Liberia to finalize negotiations with its other bilateral and commercial creditors.
The IMF arrangement will help the Government implement its ambitious reform program under the Poverty Reduction Strategy, which includes public financial management, governance and anti-corruption matters and social sector reforms.
In late 2007, the IMF also secured satisfactory financing assurances to enable the IMF to deliver the HIPC Initiative and additional beyond-HIPC debt relief to Liberia. One-hundred and two member countries provided contributions or commitments to facilitate this. These generous contributions by the members of the IMF are deeply appreciated by the Government of Liberia.
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The attainment of debt relief will not provide new cash savings for poverty reduction mainly because the government was not making any payments on its debts. However, it still helps to clarify the macroeconomic framework in which private sector investments can proceed. It is also a very historic moment for Liberia, reflecting the high level of confidence the IMF and other international institutions have in the management of the economy over the past two years.
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