- Liberia still is far from recovering from its vicious civil war, but economic indicators show the ruined country is heading the right way. Especially the booming construction sector is fuelling the economy, promising an economic growth of almost ten percent this year.
President Ellen Johnson-Sirleaf is extravagantly praised by her former employer, the International Monetary Fund (IMF). She personally received the IMF mission that has been in Monrovia for the last two weeks, inspecting Liberia's economic performance and adherence to IMF conditions, and managed to convince the Fund her government was doing a brilliant job.
"Available indicators suggest that economic activity continued to pick up in 2006," the IMF mission concluded in a statement released today. "Real GDP is projected to increase by around 8 percent owing to the buoyant construction and services sectors which have offset weaker-than-expected rubber production. Inflation is expected to remain in the single digits."
Not surprisingly, it is the construction sector which now is the principal motor of economic growth in the country, which saw most its infrastructures and businesses destroyed during the civil war. And it is also reconstruction works that are receiving the largest capital injections from the Monrovia government and foreign donors such as the World Bank, the African Development Bank, the US and European countries.
As such, the World Bank only in end-October signed off a grant worth US$ 16.5 million for the reconstruction of "critical rural road sections" and other infrastructure. This came in addition to a US$ 30 million grant for the rehabilitation of damaged roads in June this year. Totally, only the World Bank has pledged more than US$ 82 million in various projects and programmes for Liberia over the past few years - most of it directly benefiting the local construction sector.
But not only economic growth is pleasing the IMF. According to the Fund's statement, the Liberian government "has achieved most of the quantitative benchmarks for end-September" under the economic reform programmed agreed upon with the IMF. Government revenues in the first quarter of the fiscal year had even "exceeded the government's initial projections," the mission reports. Only some reforms had been delayed due to "severe capacity constraints" in the post-war country.
Also regarding next year's programmes, President Johnson-Sirleaf had found the tone with the IMF. The mission said it had "agreed with the government" on a 2007 support programme that would emphasises on "the implementation of the domestic debt resolution strategy, a reorganisation of tax administration, a further strengthening of the banking system, and commencing the implementation of the government's anti-corruption strategy."
Africa's first female President certainly has found a reliable channel to international financial institutions and foreign donors, well aided by the fact that she has valuable work experience from both the World Bank and the IMF. If the UN peacemakers are able to secure the security, Ms Johnson-Sirleaf may set new records in post-war reconstruction, as she still has donors' full trust.
Already in July, there were indications that President Johnson-Sirleaf was playing into the hands of the IMF and the World Bank. Presenting her government's 2006-07 budget, she had sought advice from the Fund and rapidly gained statements of confidence from the IMF, the World Bank and Liberia's major donors. This budget, donors said, easily would help loosen funds to support the Liberian recovery process.
But tinged to the joy of foreign investments and funds is the disappointment of still not being trusted by the UN. On 20 October, the UN Security Council finally lifted the sanctions on Liberian timber exports but maintained a ban on diamond exports. The recovery of timber exports may fuel Liberia's economy even more than the IMF experts predicted, but the former main foreign exchange earner diamonds still has to wait for more trust.
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