Rallies for support at IMF Spring Meetings
Finance and Development Planning Minister Samuel D. Tweah Jr., along with other officials of government has rallied for support on behalf of the Government of Liberia at the recent IMF/ World Bank Spring Meetings, in Washington, D.C. the United States of America.
The event held from April 8-14, 2019, was under the theme "Invest in Your Future" and brought together central bankers, Ministers of Finance and Development, parliamentarians, private sector executives, representatives from civil society organizations and academics who discussed issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.
According to a release from Ministry of Finance and Development Planning (MFDP), Minister Tweah, as head of the delegation and other officials had discussions for possible investment in areas including the private sector, domestic revenue mobilization, digital economy and social safety net, which he said are aligned to the President George Manneh Weah's Pro-poor agenda for Prosperity and Development (PAPD).
Accordingly, the World Bank had earlier earmarked US$106 million for three key sectors to include Education (US$50m), Water and Sewer (US$30m), and Public Financial Management (US$26m). The Liberian Government would have to develop a logical framework and a rationalized time-bound matrix for the utilization of the funds.
The MFDP release says that support to water and sewer will focus on providing new pipes for the Pipeline water plant, while the Bank's support to the educational sector will see the construction of additional schools in 24 districts as well as teachers' quarters and science laboratories across the country.
With regard to Public Financial Management, support will go towards setting up of an e-tax policy and system, e-procurement, and capacity development amongst others.
Meanwhile, according to the MFDP, the government of Liberia is expected to adhere to the rigid requirements for its signing onto the IMF program. Once successful, the country could benefit from additional funds including budgetary support. To achieve this, the government will have to take strong measures towards macroeconomic reforms to include transparency in monetary and fiscal policies, reforming the over-bloated wage bill, governance, business climate, as well improving an enabling environment for agribusiness.
There are indications, the MFDP release said, that government's projected revenue for fiscal year 2019/2020 will fall short of expenditure, hence the need for serious austerity measures. More attention needs to be focused on the rationalization of both salaries and allowances within the public sector. There is not a coordinated approach in the payment of allowances in various ministries and agencies. Reforming the wage bill could be the first best approach for a government that inherited lots of debts from the previous government.
It is expected that SOEs transparency and oversight could be another measure placed on the table by the IMF and WB. The government does not have a strong framework on how SOEs can contribute to the country's budget processes. The international financial reporting standards require all SOEs to publish their financial statements on a periodic basis.
While the government has made progress in resolving some of the binding constraints to the business climate, there is still a need for more reforms. Access to credit, resolving insolvency and enforcing contracts remain a challenge. The government has already banned import permits declaration, while at the same time making efforts to improve trading across borders.
Conforming to the IMF program requires a rigorous self-assessment of the country's macroeconomic policies as well as the politic will to implement these measures. While this process can be burdensome for developing countries, it can also offer opportunities for sustained economic growth and development, especially for a country that needs more support for infrastructure development and agriculture.
Also featured at the just ended IMF/WB Springs Meeting in Washington D.C. were seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world's financial system.