The International Monetary Fund (IMF) has completed its 2025 Article IV Consultation with Liberia and approved the second review of the country’s 40-month Extended Credit Facility (ECF), unlocking an immediate disbursement of SDR 19.3 million (about US$26.5 million).
The decision brings total disbursements under the arrangement to SDR 57.9 million (approximately US$79.4 million).
The IMF praised Liberia for “notable progress” in stabilizing its economy despite declining external support and a challenging global environment.
Five out of six performance criteria were met, and the IMF granted a waiver for one missed criterion related to the accumulation of external arrears, citing credible corrective steps by Liberian authorities.
Positive Growth Outlook Amid Fiscal Pressures
Liberia’s economy, which slowed modestly in 2024 after a strong post-pandemic rebound, is now expected to grow 4.6% in 2025 and 5.4% in 2026.
Over the medium term, the IMF projects growth to stabilize at around 5.5%, provided that the government fully implements planned reforms.
Mining, particularly gold and iron ore, alongside recovering agricultural output, is expected to drive the expansion. The country’s new medium-term development agenda, the ARREST Agenda for Inclusive Development (AAID), is also seen as providing political and economic stability.
Fiscal Discipline and Revenue Reforms Needed
The IMF commended Liberia for reducing its large fiscal deficit and protecting essential social programs after the abrupt withdrawal of substantial USAID funding.
To create room for development spending, however, the Fund stressed the need for “more ambitious revenue mobilization.”
Planned reforms include:
Replacing the general sales tax with a higher-rate VAT
Overhauling income tax policies
Rationalizing tax exemptions
Improving public financial management and spending efficiency
Directors also urged Liberia to maintain a “robust” debt-management strategy to avoid new external arrears.
Financial Sector Faces Legacy Risks
While the banking sector is described as “broadly stable,” the IMF warned that long-standing vulnerabilities persist.
The Central Bank of Liberia has begun addressing weaknesses in three banks, and the IMF urged timely completion of restructuring plans.
Reducing high levels of non-performing loans and strengthening regulatory oversight will be vital to restoring confidence and boosting credit to the private sector.
Governance and Anti-Corruption Efforts Highlighted
The IMF welcomed early steps taken to strengthen the Liberia Anti-Corruption Commission, including new rules requiring publication of asset declarations by public officials.
A comprehensive governance diagnostic,
currently underway, is expected to guide deeper institutional reforms.
The Fund also pressed for improvements in Liberia’s AML/CFT (anti-money laundering and counter-terrorist financing) systems and for better national statistics to support effective policymaking.
Despite the improving outlook, the IMF noted that risks remain “tilted to the downside,” particularly due to falling international aid and uncertainty in global markets.
The next Article IV Consultation will take place in line with the IMF’s regular schedule for countries with active Fund arrangements.
Liberia’s government has requested additional time before deciding whether to publish the full IMF Staff Report associated with this review, with a final determination expected within 28 days.
