Since 2003, Liberia has achieved great progress in the face of considerable difficulties and risks. It has held democratic elections, reestablished a public financial management system, begun rebuilding public sector institutions, reestablished the delivery of some essential public services, and laid the foundations of a local government system. These efforts culminated in June 2010 when official creditors agreed to US$2.7 billion of Liberia’s debt.
Liberia has made enormous strides since achieving peace in 2003. But following 14 years of civil war, the country faces monumental challenges in completely rebuilding state institutions, shattered national infrastructure, restarting service delivery, and above all helping individual citizens contribute to economic growth and the rebuilding of the state.
Liberia remains one of the poorest countries in the world, with extremely low development indicators. Health and education services were primarily provided by non-governmental organizations (NGOs) during the war years. The government faces significant institutional, monetary, and capacity challenges in getting service delivery up and running.
Liberia has the potential for strong economic growth, given its reconstruction boom, but economic recovery has been heavily impacted by the global economic crisis. Growth has slowed considerably to 4.6 percent in 2009, but is expected to rebound to 8.5 percent by 2011. Per capita public spending remains one of the lowest in the world (US$68 in Fiscal Year 2009/10), making Liberia highly dependent on foreign aid. Low capacity for revenue generation compounds this situation.
In Liberia, the International Development Association (IDA) is focusing on three main fronts: (i) rebuilding core state functions and institutions; (ii) rehabilitating infrastructure to jump-start economic growth; and (iii) facilitating pro-poor growth in addition to pursuing crosscutting objectives of capacity development, gender equality, and the environment.
Building on successful efforts to date, the Bank is focusing on a mix of budget support and investment lending to help Liberia put in place basic economic governance reforms, including public financial management, procurement reform, and civil service reform. In basic services, the Bank is working to build both institutional and policy capacity, while also facilitating community participation in prioritizing reconstruction needs. In the critical transport sector, the Bank is working in an environment with extremely limited local contracting capacity. It is using innovative approaches to attract the first private sector companies to Liberia in many years while simultaneously working to develop the nascent local contracting industry to allow use of local firms and labor in future endeavors. The Bank is also working to ensure growth is accessible to all citizens, with projects in smallholder agriculture, employment generation, and vocational training and skills building, to allow citizens to take advantage of employment opportunities as economic growth accelerates.
Economic Governance, Assistance to the Ministry of Finance's Resourse Management Unit:
Major road corridors have been rehabilitated or repaired. Nearly a tenth of the Liberia road network, 842 kms, has been worked on during the last several years.
Water supply has improved raising access to safe water in urban areas to 57 percent. Ongoing improvements to the distribution network (February 2010 – February 2011) continue to add more than 39,000 m of new transmission pipelines and 45 public standpipes in Monrovia, estimated to benefit as many as 81,000 Monrovia residents. Designs for rehabilitation of Monrovia’s water treatment plant have been finalized under IDA funding, while construction will be financed by the African Development Bank.
A new, multi-donor funded solid waste project became effective, coexisting with and building on the rudimentary solid waste management system established under IDA. Under these projects Monrovia has seen collection of more than 200,000 tons of solid waste since 2007; development of additional sanitary landfill cells with enhanced environmental protection; and improvements to the collection system resulting in a cleaner city, with additional improvements on the way. IDA also financed rehabilitation of the City Hall, which has a theater that can be used by the community as a cultural center and source of revenue for the city.
The Cash for Work Temporary Employment project has provided short term public works employment for 17,000 people in all 15 Liberian counties since its inception in October 2008.
This is an emergency or disaster risk reduction type of project. There has not been much donor interest or capacity to support this project. IDA remains the only donor partner for this project through its three successive phases.
Toward the Future
As Liberia moves from the immediate post-conflict era to a long-term development phase, the Bank is supporting a comprehensive program of intensified dialogue, analytical, and strategic work to underpin the medium term growth agenda: pro-poor economic growth, employment generation, capacity building, and mining/growth corridors. This also includes sector-specific strategy work such as a National Energy Plan and an Energy Sector Master Plan, as well as a national roads strategy, an education and vocational training strategy, among other things. At the same time, the Bank will continue its work to help Liberia deepen and sustain its core governance reform program, ensure increased employment opportunities for citizens, and improve management of basic service delivery.