The World Bank Group has approved the second in a series of three single-tranche Inclusive Growth Development Policy Operations (IGDPO) to support and enable inclusive growth, development and reforms in Liberia.
The financing, amounting to $40 million comes in the form of an International Development Association (IDA) concessional credit of $20 million and an IDA grant of $20 million to be disbursed as budget support.
The underlying reforms being supported seek to remove distortions in selected sectors, strengthen public sector transparency, and promote economic and social inclusion.
“The continued implementation of critical policy reforms in sectors such as energy and agriculture helps create a conducive environment for transformative investments being made in these sectors by the Government, with support from development partners,” said Dr Khwima Nthara, World Bank Liberia country manager.
Building on reforms supported under the first reform program approved last year, the key reforms under this second program are expected to help increase agriculture productivity by promoting farmers’ access to certified seeds; reduce power theft and commercial losses at the Liberia Electricity Corporation (LEC).
Reforms at LEC will be implemented by making electricity affordable for the small consumers with the reduction in electricity tariffs for poor households from $0.385/kWh to $0.22/kWh in May 2021.
Reforms will also streamline and increase the transparency of tax waivers and in turn, improve revenues to enhance the provision of public services, especially for poor households; strengthen the oversight and transparency of state-owned enterprises (SOEs); promote financial inclusion through the amendment of the Payments Act and introduction of digital credit; and finally, create an efficient, transparent and sustainable Social Safety Net System.
“Strengthening Domestic Revenue Mobilisation, through reduction of duty waivers and tax holidays, is critical to expanding fiscal space for increased public investment that is domestically financed,” said Mamadou Ndione, World Bank senior economist and task team leader of the IGDPO programme.
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The reform programmes being supported are aligned with the Liberia’s Pro-Poor Agenda for Prosperity and Development and the World Bank’s Country Partnership Framework.
The International Development Association (IDA) is the World Bank’s fund for the poorest. Established in 1960, it provides grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Annual commitments are constantly on the rise and have averaged $21 billion over the past three years, with about 61% going to Africa.