The World Bank has suspended Liberia’s access to critical funding due to the country’s failure to meet payment obligations for 60 days, starting August 15, 2024. This suspension restricts Liberia from withdrawing funds from World Bank-managed resources, jeopardizing essential development projects amid ongoing austerity measures that have reduced the national budget from $738.9 million to $721.5 million. The revised budget prioritizes public administration and security, leading to cuts in vital sectors such as health and education. Despite a 4.7% economic growth in 2023, mainly driven by increased gold production, the primary sector only grew by 1.4% due to declining agricultural output. Inflation rose to an average of 10.1%, with food inflation at 12.3%. The fiscal deficit was recorded at 5.5% of GDP, and Liberia’s debt-to-GDP ratio is at 54.5%, indicating a moderate risk of external debt distress. The World Bank has urged Liberia to address its overdue payments to restore project financing, which is crucial for development, particularly in infrastructure, agriculture, and energy sectors. The Unity Party-led government faces challenges managing a budget that reflects harsh economic realities, with significant cuts affecting health, education, and public investment. Source: The Liberian Investigator tagged in post
