Following the just ended World Bank spring meeting in Washington, D.C., the International Monetary Fund (IMF), has approved a major financing package for Liberia, unlocking US$266 million under a 21-month Resilience and Sustainability Facility (RSF) to support climate adaptation and economic resilience.
In a decision announced Monday in its press statement, the IMF Executive Board also completed the third review of Liberia's Extended Credit Facility (ECF) program, triggering an immediate disbursement of US$26.49 million, bringing total ECF support to nearly US$106 million.
The ECF arrangement, initially approved in September 2024, amounts to about US$212 million and is aimed at restoring macroeconomic stability, ensuring debt sustainability, strengthening governance, and safeguarding Liberia's financial system.
Growth Strengthens Despite Global Pressures
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Liberia's economy showed strong performance in 2025, with growth accelerating to 5.1 percent, largely driven by a surge in mining output. The IMF noted that the country's political environment remains supportive of reforms under the government's development framework, the ARREST Agenda.
However, global economic challenges continue to pose risks.
"Economic performance has been robust," said Bo Li, Acting Chair and Deputy Managing Director of the IMF. "At the same time, deteriorating global conditions have increased downside risks, particularly due to elevated oil prices and a decline in bilateral assistance."
Fiscal Discipline and Social Spending
The IMF highlighted that Liberia's fiscal adjustment efforts have helped reduce debt vulnerabilities, while government spending reforms are redirecting resources toward critical infrastructure and social programs.
To cushion the impact of rising global oil prices, authorities have introduced targeted subsidies for public transportation. A recently adopted supplementary budget also increases allocations for social spending while maintaining fiscal discipline.
Still, the Fund emphasized that more progress is needed, particularly in improving public investment efficiency and prioritization.
Key Reforms Ahead: VAT and Mining Taxes
Liberia is expected to accelerate domestic revenue generation through several major reforms, including:
Introduction of a Value Added Tax (VAT) in 2027
Reforms in mining taxation
Reduction of tax exemptions
These measures are critical to financing priority sectors under the ARREST Agenda, including agriculture, roads, education, sanitation, and tourism.
Banking Sector and Monetary Policy
The IMF commended the Central Bank of Liberia for maintaining a cautious, data-driven monetary policy amid global uncertainties.
Authorities are also working to strengthen the financial sector by:
Enforcing bank restructuring plans
Reducing non-performing loans
Expanding credit to the private sector
"These efforts will strengthen banks' balance sheets and support private sector growth," the IMF noted.
Governance and Anti-Corruption Push
The IMF stressed the importance of strengthening the Liberia Anti-Corruption Commission, particularly through the publication of asset declarations by public officials.
It added that implementing governance reforms identified in recent diagnostics will be essential in addressing institutional weaknesses and improving transparency.
Climate and Resilience Focus
The newly approved RSF arrangement will play a key role in:
Supporting climate adaptation efforts
Enhancing pandemic preparedness
Mobilizing additional international financing
The IMF said the RSF, combined with ongoing reforms under the ECF, will boost economic resilience and reduce balance-of-payments risks.
Outlook: Steady Growth, Moderate Inflation
IMF projections show Liberia's economy maintaining steady growth between 5-5.6 percent through 2030, while inflation is expected to gradually decline to around 5 percent.
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Public debt is projected to fall over time, while foreign reserves are expected to strengthen, reaching the equivalent of about three months of import cover by the end of the decade.
Sources: Liberian authorities; and IMF staff estimates and projections.
1 Central government operation is based on a commitment basis and refers to the budgetary central government operations and off-budget projects.
2 The total amount of external project grants and loans, along with the associated spending, has been revised down from 2021 onwards to reflect the revised authorities' database prepared together with donors.
3 Ratios are calculated using external debt (in U.S. dollars) evaluated at the end of period exchange rate over GDP (in U.S. dollars) evaluated at the period average exchange rate.
4 Including central government debt owed to the Central Bank of Liberia.
