IPNEWS: Liberia’s Finance and Development Planning Minister, Augustine Kpehe Ngafuan, has unveiled a significant public sector infrastructure initiative focused on energy and road development in the country.
Minister Ngafuan stated that the development of major growth corridors will increase during the upcoming dry season, along with an expansion of electricity services, which will include the purchase of energy from Ghana. During Thursday’s simulcast appearance on the Liberia Broadcasting System (LBS) in Monrovia, Minister Ngafuan stated that the government plans to undertake significant infrastructure projects.
A 20MW solar plant at Mt. Coffee is set to become operational by August 2025. Furthermore, Minister Ngafuan noted the government’s collaboration with China on various road projects, including the overpass at the Ministerial Complex and a road project between Gabriel Tucker Bridge and St. Paul Bridge supported by Japanese funding. Ngafuan emphasized the government’s commitment to counterpart financing for all projects funded by multilateral partners, which will take priority in the FY2025 budget.
In a recent private sector discussion held on October 15, participants expressed concerns about the high costs of electricity, which they believe are undermining business profitability. Entrepreneurs, including those operating two Airbnbs, urged the government to address these energy challenges. Acknowledging the difficulties faced by the government, Ngafuan assured that while turbulent times are ahead, there is hope for recovery and progress. He noted that, twelve years ago, he left behind a budget of US$500 million, and now the budget stands at a little more than US$700 million with economic growth has been stagnant.
He also addressed the issue of government debt, which has risen significantly, with FY2025 debt servicing projected at US$328 million. While acknowledging that debt can be harmful, he emphasized its potential for development when utilized wisely. Ngafuan lamented the decline in the government’s relationship with vendors, stating that the credibility lost over time has led to vendors being reluctant to honor letters of purchase orders (LPO) without upfront payment. He stressed the need for the government to restore its commitments.
Moreover, the Finance and Development Planning Minister announced that recently the International Monetary Fund (IMF) approved a US$210 million Extended Credit Facility (ECF) program for Liberia. However, he clarified that these funds are not intended for the national budget but will instead serve to strengthen the country’s reserves, as Liberia is currently facing a balance of payments issue where imports exceed exports. The funds are intended to be disbursed over a 40-month period.
He highlighted the importance of economic indicators, noting that a healthy economy typically has reserves capable of financing three months of imports. Unfortunately, Liberia currently has reserves sufficient for less than two months of imports, a situation he described as indicative of macroeconomic imbalances.
In addition to the IMF support, Ngafuan reported that Liberia recently secured a grant of €108 million (approximately US$117.2 million) from the European Union for the FY25 budget. The government has also obtained US$40 million from the World Bank for direct budgetary support, alongside US$20 million earmarked for disaster management, totalling US$60 million. The release of the World Bank funds is contingent on meeting specific prior actions.
