AfDB-Liberia Partnership

In its Agenda for Transformation strategy document, Liberia has laid out its plans to achieve middle-income status by 2030. Photo by: AfDB Since the Accra Comprehensive Peace Agreement ended a 14-year civil war in 2003, Liberia has made some considerable progress in areas of peacekeeping and economic growth. Two democratic elections have been held following the enactment of the peace accord, and gross domestic product has grown steadily since 2010. But significant constraints still remain. The 2011 elections were marked by political violence, underscoring the fragile peace and order situation. Further, government institutions remain highly inefficient and corruption is widespread. And since President Ellen Johnson Sirleaf’s party does not hold the majority in the legislative branch, much-needed institutional reforms are curtailed and delivery of basic services to the Liberian population remains inadequate. Liberia’s economy relies heavily not only on foreign direct investments but also on exports of commodities such as iron ore, rubber and timber. As such, it is highly susceptible to fluctuations in price and demand on the international market. Climate change likewise poses a threat to the Liberian economy as it affects some of the country’s most profitable sectors, namely agriculture, forestry, fisheries, energy and mining. In its Agenda for Transformation strategy document, Liberia has laid out its plans to achieve middle-income status by 2030. As a key development partner, the African Development Bank will be building on its previous efforts in Liberia and implementing a more targeted approach in its engagement to help the government achieve its development objectives. Funding levels As stated in its country strategy paper for Liberia, AfDB’s indicative budget for 2014-2016 — which falls under the 13th African Development Fund cycle — ranges from $180 million to $240 million. Funding for 2017 will come from ADF-14, and will be determined during the 2015 midterm review. Below is a breakdown of possible allocation levels for the 2014-2016 period. Regardless of scenario, the bank’s regional funding mechanisms and trust fund allocations will amount to $105 million. ADF-13 funding includes a minimum $60 million in performance-based allocations. Depending on contributions from the fragile state facility, ADF-13 funding could range from $75 million to $135 million. A low funding scenario assumes an FSF allocation of $15 million, while medium and high funding scenarios propose FSF contributions of $45 million and $75 million, respectively. Consultations will be held regularly with the Liberian government in order to determine the level of funding necessary to achieve its development objectives. Funding priorities AfDB’s strategy for Liberia is guided by two underlying priorities: - Promoting Inclusive Economic Growth through Transformative Infrastructure Investments. - Enhancing Governance and the Efficient Management of Resources. The first priority area will focus on the improvement of road and energy infrastructure, private sector development, increased competitiveness of the agricultural sector, job creation and equal access to jobs, and the effective delivery of basic services. The second priority, meanwhile, involves building public finance management capacity, strengthening government institutions, increasing transparency and enhancing the overall business climate, especially in terms of regional and international trade. Below is a breakdown of key programs to be implemented during the ADF-13 cycle, along with their corresponding indicative budget allocations. Current institutional development projects in Liberia include: - Institutional Development and Capacity Building for the Governance Commission in Liberia ($753,798) – Designed to support the Governance Commission and accelerate institutional reforms. - Technical Assistance and Capacity Building to Liberia Institutes of Statistics and Geoinfo ($750,000) – Targeted at strengthening IISGIS as well as conducting relevant national statistics surveys and disseminating their results. - Technical Assistance and Capacity Building to the Liberia Extractive Industry Transparency Initiative ($405,000) – Intended to enhance transparency in extractive industries to maximize their contributions to socio-economic development. Ongoing road infrastructure projects in Liberia include the first phase of the Fish Town-Harper Road Project, which involves paving the 50-kilometer Harper-Karloken stretch. It is expected to increase transport efficiency and access to southeastern counties and neighboring ECOWAS/MRU states, once completed. The second phase of the road project, worth $105 million, is already being planned. In the energy sector, the Liberia Power Master Plan ($1.8 million) aims to develop a framework for providing low-cost, widely accessible electricity to reduce production costs for businesses and improve living standards for the general population. Devex analysis Top donors to Liberia include the U.S. Agency for International Development, World Bank, European Union, the United Nations and AfDB. The bank has identified Liberia’s limited human and institutional capacity as the biggest risk to effective aid delivery. AfDB will continue to incorporate capacity building measures in its projects to mitigate such risks, as well as work closely with the Liberia Field Office to increase the level of supervision in its development efforts. Possible return to conflict due to social unrest stemming from inequality, limited and noninclusive benefits, poor service delivery and a general lack of trust in the government is also seen as a threat. As a counterbalance, AfDB intends to increase security dialogues with relevant stakeholders, as well as increase government transparency to diminish actual and perceived levels of corruption. Climate change and the volatile nature of the international market likewise remain areas of concern, threatening to hamper the growth of Liberia’s largely undiversified economy. AfDB is planning to invest heavily in infrastructure, particularly in transportation and energy, in a bid to increase access to and for excluded communities, while also helping the economy by reducing transport and production costs. With a 14th ADF cycle on the horizon and several long-term development projects on the way, AfDB is poised to extend its support to Liberia beyond 2017. Contact AfDB field office in Liberia Tel: (231) 7771-17773 Email: