Liberia's economy rebounds, but action plan needed to improve governance
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Page 189
In 2003-04, Liberia's economy remained volatile in the aftermath of the 14-year civil war that officially ended with the August 2003 peace agreement. After real GDP plummeted in late 2003 as a result of renewed hostilities and the United Nations ban on timber exports, activity rebounded in 2004, the IMF said in its annual economic review. In 2005, the economic recovery is expected to strengthen, buttressed by the improving security situation, donor inflows, and reconstruction activities.
While welcoming the economic recovery, the IMF Executive Board noted that Liberia's economic position is still fragile, activity still below pre-war levels, poverty widespread, and the public debt large and unsustainable. It stressed that the flow of urgently needed external assistance and private investment depends on decisive actions to strengthen institutions, reduce corruption, and improve governance.
After initial success in implementing a balanced cash-based budget, fiscal management has weakened, and arrears reemerged during 2004. The Board urged the authorities to strengthen expenditure...
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