22 November 2012

Liberia: U.S.$78.9 Million IMF Loan for Poverty Reduction

The International Monetary Fund has approved a three-year US$78.9 million loan for Liberia to help it combat poverty.

Liberia attracted billions of dollars in resource investment since the end of a civil war in 2003, but remains one of the world's least developed and poorest countries, with 84 percent of the population living in poverty.

In approving the loan Monday, the IMF said it is meant to support the government's poverty reduction strategy, and comes with conditions from the IMF for government policies.

"The policy priorities focus on safeguarding macroeconomic stability and laying the basis for faster and diversified growth through a substantial scaling up of infrastructure and social investments," Min Zhu, the IMF's deputy managing director, said after the IMF board approved the loan.

The IMF said Liberia should implement fiscal and financial reforms, such as establishing a revenue unit for natural resources at the Ministry of Finance that can boost transparency.

Liberia immediately gets $11.3 million from the IMF, and will get the rest of the money after periodic reviews to see if it has complied with the terms of the loan.

President Ellen Johnson Sirleaf has promised to cut the poverty rate, build infrastructure and boost employment, as well as promote growth on the back of resource development.

But the jury is still out on how well Liberia can beat the "resource curse" that has afflicted many other African states, bringing insecurity and rampant levels of official corruption to other resource-rich nations.

A Liberian government transparency watchdog is currently auditing more than $8 billion worth of oil, mining and agricultural contracts to check for possible fraud and mismanagement.

The IMF previously gave Liberia a loan of about $380 million, with the program ending in May.

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