World Bank to Enhance Economic Resilience in Liberia
.... “We are glad that actions have been taken to strengthen transparency and accountability in the public sector. One of such is the amendment of the Act of the Liberia Anti-Corruption Commission (LACC),” said Mack Capehart Mulbah, Acting World Bank Liberia Country Manager.
The World Bank Board has approved a Resilient Recovery Stand-Alone Development Policy Financing Operation (RRDPO) for Liberia to lay the institutional and policy foundations in selected growth-supporting and resilience-enhancing sectors and promote transparency and accountability in the public sector.
The financing amounted to US$65 million (US$22 million from the country’s performance-based allocation, US$32 million from the International Development Association (IDA) Scale-Up Window Shorter Maturity Loans (SMLs), and US$11 million from Liberia’s performance-based allocation SMLs IDA credit).
According to a World Bank press release, this RRDPO is aligned with the World Bank’s Country Partnership Framework and supports the government’s efforts to reignite sustainable and inclusive private sector-led growth, building on the gains made under the previous programmatic Inclusive Development Policy Operations (IGDPO) series concluded in 2022.
“We are glad that actions have been taken to strengthen transparency and accountability in the public sector. One of such is the amendment of the Act of the Liberia Anti-Corruption Commission (LACC),” said Mack Capehart Mulbah, Acting World Bank Liberia Country Manager.
“This development policy financing will help strengthen the LACC and enable it to directly prosecute cases of corruption. The recent nomination of the LACC commissioners is a significant step toward the operationalization of the new LACC and the start of the prosecution of corruption cases.”
In support of food security, this operation will help increase the food storage capacity at the country level and improve the quality of the warehouses to meet international storage standards, including the climate resilience of the storage facilities, which in turn will help maintain stocks of agricultural products of good quality.
“Effective road connectivity is critical to development in several sectors of Liberian society. Consequently, this operation supports the upgrading of the legal and regulatory framework for road management in Liberia,” said Mamadou Ndione, World Bank Senior Economist and Task Team Leader of the RRDPO.
“The enactment of a Road Act will establish a dedicated Road Agency entrusted with implementing the road program and complete a key pillar of road sector reforms intended to consolidate and secure capacity gains in the sector. The Road Act will further streamline responsibility for different classes of roads, for example, by delegating the maintenance of county roads to county governments, a level closer to the people who can voice their needs.”
Liberia’s land administration system will be strengthened under the RRDPO, the release added. It will promote economic resilience, social cohesion, women’s land rights, responsible agricultural investments, an enabling business environment, and climate-smart forest management.
It will also ensure the implementation of a robust Value Added Tax (VAT) regime, which will broaden the tax base, generate more revenues, and make the tax system more neutral and efficient. The revenue increase from VAT is estimated to be as high as 50 percent at a 15 percent rate, or US$60 million in additional revenue by 2024.
Additionally, this operation will assist the government in regularly generating information on government payment delays and arrears in order to reduce them.
Shorter delays in public payments can improve private sector liquidity and profits, reduce the likelihood of bankruptcies, and ultimately increase economic growth.
It will also help increase procurement reporting compliance from 6.1 percent of procurement entities (PEs) in 2020 to a targeted half of 50 percent in 2024.
The Ministry of Finance and Development Planning is responsible for the implementation of the reforms supported by the operation. More specifically, the Aid Management Unit will be directly responsible for the implementation of the operation.