—-As IMF Approves Extended Credit Facility (ECF) for Liberia
IPNEWS: The International Monetary Fund (IMF) has expressed significant concerns regarding the ambitious scope and financing of Liberia’s national development plan, known as the ARREST Agenda for Inclusive Development (AAID).
In a statement issued Wednesday, Jan 7, the IMF states that while it supports the plan’s objectives, there are substantial risks and structural weaknesses that could impede its successful implementation.
Key IMF Concerns and “Doubts”
The IMPF notes that the AAID has an ambitious estimated cost of US$8.4 billion over five years, which is reportedly twice Liberia’s GDP.
The IMF warns that with development partner support declining, relying heavily on non-concessional borrowing to fund this spending could jeopardize macroeconomic stability and external debt sustainability.
The IMF points to relatively weak institutional and public investment management (PIM) capacity in Liberia, particularly in project appraisal, selection, and management. These weaknesses call for a cautious approach to scaling up public investment to ensure that it translates into actual growth and is not wasted.
The Fund consistently emphasizes the need to address long-standing structural weaknesses, including persistent corruption, governance challenges, and limited competitiveness. The IMF indicates that continued failure to reform these areas could hinder progress and potentially impact future donor support.
The IMF urges the government to intensify efforts to increase domestic revenue through tax reforms and improve tax collection efficiency, especially given the decline in external support and grants.
Despite some progress in fiscal management, the IMF notes that high inflation and widespread poverty remain significant challenges for ordinary Liberians, indicating that macroeconomic stability on paper does not always translate to improved living standards for the population.
IMF Position
The IMF has approved an Extended Credit Facility (ECF) arrangement to support the AAID’s objectives, such as restoring fiscal and debt sustainability and mobilizing resources for infrastructure. This indicates a level of confidence in the government’s commitment to reforms, but the success is contingent on the “full and timely implementation of the ECF-supported reform program”.
In essence, the IMF’s stance is not a total rejection of the plan but rather a call for prudent, disciplined, and efficient execution to mitigate significant inherent risks
President Boakai‘s “ARREST Agenda” (Agriculture, Roads, Rule of Law, Education, Sanitation, Tourism) faces criticism for being vague, lacking implementation details, and failing to deliver tangible results despite pledges of support from international bodies like the UN and World Bank, with critics pointing to slow progress, continued corruption, and luxury spending by officials amidst public hardship as signs of ineffective governance and policy gaps.
Critics argue the agenda is a “cut-and-paste” document with vague goals, lacking concrete plans, measurable benchmarks, and innovative solutions for Liberia’s deep-seated problems.
Despite being launched in early 2025, progress, especially in tourism and job creation, has been slow, leading to doubts about its effectiveness.
Issues like failures in managing development funds and reports of officials using luxury vehicles while citizens lack basic services highlight a disconnect, with some viewing it as a “reckless disregard” for the people.
President Boakai and officials frame the agenda as a comprehensive strategy for transformation, emphasizing its focus on human capital and development.
The UN and World Bank have pledged support and praised the agenda, with the World Bank committing significant funding, though implementation remains a challenge.
In essence, while the ARREST Agenda aims to be Liberia’s development blueprint, international and local critics question its practicality and execution, pointing to a gap between ambitious goals and on-the-ground realities.
