MONROVIA -The federal government’s flagship growth program, the ARREST Agenda for Inclusive Improvement, is going through intense scrutiny following the termination of key exterior assist, with the Worldwide Financial Fund warning that the plan’s present scale and financing assumptions carry severe implementation dangers within the wake of the USAID shutdown and the gradual withdrawal of different companions, together with Sweden.
By Selma Lomax, Selma.lomaxfrontpageafricaonline.com
In its newest evaluation of the financial system, the Worldwide Financial Fund (IMF) cautioned that the AAID, which was designed because the central coverage framework to remodel the nation beneath the Unity Get together (UP) administration, should be urgently reprioritized to replicate the brand new and extra constrained financing actuality.
The Fund mentioned the technique was developed at a time when Liberia may fairly anticipate substantial exterior help, significantly from america and different bilateral and multilateral companions, and was constructed on the belief that about seventy p.c of its financing would come from personal sector participation and exterior companions, with the federal government contributing the remaining thirty p.c.
In keeping with the IMF, that assumption has now been basically altered. Following the termination of U.S. assist, the Fund mentioned the AAID must be realigned with the authorities’ long run goal of accomplishing low center earnings standing beneath far tighter fiscal situations.
The IMF famous that the technique assumed giant scale public investments and expansive social applications could be funded primarily by growth companions and worldwide monetary establishments, however with exterior help now sharply lowered, implementing these infrastructure initiatives shall be considerably more difficult and should require scaling them down.
The warning comes amid rising concern over the feasibility of the AAID’s bold financing envelope. The plan envisages practically eight level 4 billion U.S. {dollars} in investments over the 2025 to 2029 interval, an quantity nearly twice Liberia’s gross home product in 2024. The IMF mentioned that urgent forward with the plan in its present type, with out adjusting to declining associate help, may expose the financial system to extreme dangers.
“With growth associate help declining and restricted prospects for substantial will increase in overseas direct funding, counting on non concessional borrowing to fund the bold growth and social spending may jeopardize macroeconomic stability and exterior sustainability,” the IMF mentioned, warning that comparatively weak implementation capability additionally requires a cautious and measured strategy.
A serious speedy shock to the nation’s financing outlook, the IMF highlighted, was the everlasting cancellation in February 2025 of practically all energetic USAID initiatives, totaling about 434 million U.S. {dollars}. The Fund mentioned this quantity is equal to roughly seven p.c of Liberia’s GDP over the subsequent 4 years and represents a big lack of grant financing that had been supporting key sectors comparable to training, well being, agriculture, and social safety.
The IMF warned that the termination of USAID applications could have large ranging financial and social results, together with job losses amongst regionally employed employees, lowered alternatives for home contractors, larger ranges of non-performing loans within the banking system, and a shortfall in tax revenues that had been generated not directly by assist associated financial exercise.
It additionally cautioned that the cancellations will create main funding gaps in social applications that disproportionately have an effect on essentially the most weak segments of the inhabitants.Past the speedy lack of U.S. help, the Fund pointed to deeper structural challenges that complicate implementation of the AAID.
Years of battle have left Liberia with giant infrastructure deficits, weakened establishments, and depleted human capital. Poverty stays widespread, with estimates suggesting that about sixty p.c of Liberians reside under the poverty line, whereas the financial system stays closely depending on agriculture and mining, sectors which are weak to exterior shocks and supply restricted broad based mostly employment.
Launched in January 2025, the AAID teams coverage priorities beneath six pillars, together with financial transformation, infrastructure growth, governance and anti-corruption, rule of regulation, environmental sustainability, and human capital growth.
The plan targets common annual financial development of about six p.c and goals to lift per capita earnings to at least one thousand U.S. {dollars} by 2029. Whereas the IMF acknowledged that these targets are broadly effectively conceived and aligned with Liberia’s long run aspirations, it confused that the scope and financing of the agenda should now be revisited.
The Fund urged the federal government to reprioritize the AAID by reordering initiatives based mostly on urgency and impression, cutting down initiatives the place mandatory, and considerably growing the home income contribution. It additionally emphasised the necessity to search extra grants and extremely concessional financing to protect debt sustainability, warning that extreme reliance on costly, non-concessional loans may undermine the nation’s fragile macroeconomic foundations.
Strengthening public funding administration and bettering implementation capability have been additionally highlighted as essential steps to make sure worth for cash and rebuild confidence amongst growth companions. The IMF mentioned that whereas investing in essential infrastructure comparable to roads, electrical energy, and water methods is important to unlock
development potential, prudent financing and robust establishments are essential to keep away from waste and safeguard long run stability.
The Fund’s evaluation was delivered as a part of Liberia’s 2025 Article IV Session and the second overview beneath the Prolonged Credit score Facility association, which unlocked a disbursement of about 26.5 million U.S. {dollars}.
The IMF famous that Liberia has recorded typically passable efficiency beneath this system, together with progress in fiscal consolidation and debt administration, however confused that the exterior surroundings has turn into more difficult on account of declining assist flows.
The underside line of the IMF’s warning is that the federal government has persistently trumpeted the AAID because the transformative program that may reshape Liberia beneath the Unity Get together administration, projecting that greater than eight billion U.S. {dollars} could be generated to drive growth.
A good portion of this projected financing was anticipated to return from worldwide companions, together with USAID and different bilateral donors. With USAID now gone and Sweden additionally making ready to exit, the IMF says that reaching the federal government’s bold targets shall be far harder within the absence of those important help traces until the agenda is sharply reprioritized and home sources are considerably elevated.
In response to the rising public debate, a guide on the Ministry of Finance and Improvement Planning, Benedict Harleyson, pushed again in opposition to claims that the IMF has declared the ARREST Agenda unrealistic or a menace to macroeconomic stability. He mentioned such interpretations are deceptive and don’t replicate the Fund’s precise place.
In keeping with Harleyson, the IMF has not said that the AAID is unachievable or suggested that it’s deserted. He mentioned the Fund acknowledges the ARREST Agenda as Liberia’s official growth framework and has structured its monetary help and coverage steerage round guaranteeing its success.
He defined that the IMF’s position is to evaluate dangers, spotlight constraints, and description situations mandatory for profitable implementation, noting
that warnings about fiscal, institutional, or financing dangers are normal options of IMF reviews worldwide.
He confused that the IMF’s emphasis on declining exterior financing, the necessity for stronger home income mobilization, prudent borrowing, and improved institutional capability shouldn’t be interpreted as rejection of the Agenda itself.
As a substitute, he mentioned, these cautions are supposed to information accountable implementation. Harleyson identified that the IMF’s approval of a multi yr Prolonged Credit score Facility program demonstrates that it considers the Agenda possible beneath the correct situations.
In his view, the IMF’s place is that the ARREST Agenda can succeed, however solely whether it is executed with self-discipline, supported by efficient income assortment, prudent debt administration, and strengthened establishments. He warned that portraying IMF cautions as proof that the Agenda is unrealistic misrepresents the Fund’s precise stance, arguing that the IMF isn’t opposing the federal government’s growth imaginative and prescient however is as an alternative offering a roadmap to attain it with out undermining macroeconomic stability.
