AfDB provides more than US$ 17 million to Liberia for Public Financial Management Reform
Tunis, 22 December 2008 – The African Development Bank (AfDB) Group has approved a grant of UA* 12 million, equivalent to US$ 17.86 million, for Liberia to finance the Public Financial Management Reform Support Programme (PFMRSP) I. The programme’s UA 9 million financing from the Fragile States Facility (FSF) is enhanced by a UA 3 million grant in the form of an allocation from the Surplus Account of the AfDB to the African Food Crisis Response (AFCR). The FSF grant will focus on public financial management reform, revenue administration modernization, as well as audit and procurement systems. The AFCR grant will support the authorities’ response to the food crisis, namely, a suspension of the import tax on rice and tariffs for agricultural inputs.
The PFMRSP I will deepen reforms to improve the effectiveness of the budget through better preparation, execution, reporting, and auditing. Importantly, it seeks to improve fiscal policy design, regarding budget preparation and execution; enhance capacity for sustainable tax revenue generation, by revamping the tax revenue departments and implementing a medium-term fiscal framework (MTFF); make operational the one-stop service facility in customs; strengthen the procurement and audit systems of the government; and support government measures to limit the social impact of rising food prices.
The PFMRSP I will benefit the Ministry of Finance directly, especially revenue collection agencies, by allowing the acceleration of the reform processes that will further transparency and accountability in the management of public resources. By allowing the maintenance of subsidies on agricultural inputs, the rural poor will benefit from greater availability of foodstuffs. Furthermore, by providing foreign exchange, the programme buttresses macroeconomic stability, benefiting the population at large. At a secondary level, the programme will benefit the people of Liberia through improvements in service delivery and the promotion of an enabling environment for private sector-led economic growth that benefits the whole population. Indirectly, improved transparency, accountability, and enhanced fiduciary arrangements also tend to have trickle down benefits to the most vulnerable members of society, including women and the rural poor.
The AfDB’s engagement in Liberia since the end of the war has focused on providing emergency support to rebuild ruptured public service delivery and devastated government institutions, as well as establishing macroeconomic stability. The Bank will continue to align its operations on the Poverty Reduction Strategy pillars for "revitalizing economic activity" and "rehabilitating infrastructure and delivering basic services," where the Bank can leverage its comparative advantage to make an impact in Liberia. In line with the Joint Assistance Strategy (JAS), the engagement places emphasis on water and sanitation, where the AfDB will lead, and pro-poor growth, by fostering the natural resources sectors while ensuring that benefits are widely shared and production costs reduced.
The AfDB started operations in Liberia in 1972. To date, its cumulative commitment in the country stands at US$ 143 million for 19 operations.
* 1 Unit of account (UA) = US$ 1.48797 as at 22/12/2008