Liberia’s efforts to transform the lives of poor people have received a huge boost with financing approved by the World Bank.
Two new operations will increase access to sustainable, reliable and affordable energy, and boost economic recovery by providing employment opportunities and business skills training to vulnerable Liberians.
Funded by the International Development Association (IDA), these projects are aimed at improving Liberia’s economy and helping to build resilience for vulnerable households that are greatly at risk of falling into poverty due to the impact of the COVID-19 pandemic.
The support programme includes the following:
- The Liberia Electricity Sector Strengthening and Access Project (LESSAP) is the first project of a multi-phase programmatic approach (MPA) with a goal to provide sustainable, reliable and affordable electricity to 632,500 Liberians. The project will rehabilitate and expand electricity infrastructure and provide sustainable solutions for electricity access. The LESSAP will target mainly two key areas – grid electrification in the greater Monrovia area and provide for a sustainable business model for scaling up renewable energy based mini-grids and stand-alone solar systems in remote areas. The project will also deliver off-grid solar electrification to about 200 health facilities, in particular to help build resilience against COVID-19. The total financing envelope for the MPA is $180 million in IDA support with the first phase commitment of $44 million in IDA credit and an IDA grant of $15 million. The project also includes grant support of $2.5 million from the Energy Sector Management Assistance Programme (ESMAP) and $2.7 million from Japan Policy and Human Resources Development Fund (PHRD), both of which will be administered by the World Bank.
- The Recovery of Economic Activity for Liberian Informal Sector Employment Project (REALISE) will increase access to employment opportunities for some of the most vulnerable households in the informal sector who are at risk of falling deeper into poverty. The project will provide grants and business skills training to 4,000 vulnerable households to revive or start small businesses, as well as temporary employment and wages to 15,000 poor individuals, half of whom will be women. It will target low-income communities and poor families in Greater Monrovia. REALISE project will be implemented by the Ministry of Youth and Sports and the Liberia Agency for Community Empowerment, utilising implementation capacities developed under the ongoing Liberia Youth Opportunities Project. The project will be financed through IDA concessional terms of $5 million credit and $5 million grant.
Improved energy access to stimulate economic growth
Poverty remains widespread in Liberia and is now on the rise. An estimated 44% of Liberians were living with less than $2 a day in 2016 and this is now projected to reach 52% in 2021. Access to healthcare, education and basic utilities like energy are also particularly low compared to the rest of the region.
“Given the devastating impact of COVID-19 on the economy and people’s livelihoods, improved energy access will stimulate inclusive economic growth while support to the informal sector will help the most vulnerable Liberians to recover from the loss in incomes,” said Khwima Nthara, World Bank country manager in Liberia.
The COVID-19 pandemic has had a devastating impact on Liberia’s economy and people’s livelihoods and poses a major threat going forward. When the global pandemic emerged in early 2020, Liberia was already facing a challenging domestic and external environment. Weak consumption and declining output had caused the Liberian economy to contract by an estimated 2.3% in 2019 and a further 2.9% in 2020.
According to the High-Frequency Phone Survey of Households conducted by the Liberia Institute of Statistics and Geo-Information Services, more than 70% of households reported experiencing food shortage and increased food prices. This call for a comprehensive response focusing both on the need to protect the poor and vulnerable in the short term, as well as support economic recovery in the medium term.
“This is a demonstration of the Bank’s strong commitment to Liberia. The approved package of support will be a big boost to our COVID-19 recovery efforts and our vision to transform the economy through infrastructure development,” said Samuel D. Tweah Jr, Liberia’s minister of finance and development planning.