ADF Approves $18.3 Million to Boost Liberia’s Revenue Collection and Governance Reforms

The financing includes a $9.6 million ADF-16 loan, a $6.8 million Transition Support Facility (TSF) Pillar I loan and a $1.9 million in-kind contribution from the Liberian government.

The African Development Fund (ADF), the concessional lending arm of the African Development Bank Group, has approved an $18.3 million financing package to enhance Liberia’s domestic revenue mobilization and advance governance reforms. This initiative aims to improve revenue collection, promote fiscal transparency, and strengthen governance in the country, particularly in the critical extractive sector.

The financing includes a $9.6 million ADF-16 loan, a $6.8 million Transition Support Facility (TSF) Pillar I loan and a $1.9 million in-kind contribution from the Liberian government. These funds will support the Institutional Support for Enhanced Domestic Revenue Mobilization and Reform Implementation Project (ISEDRMP), building on prior successful programs to address Liberia’s fiscal challenges and governance gaps.

Key Project Objectives and Features

Modernizing Revenue Collection and Reducing Tax Leakages

The ISEDRMP will modernize and digitize tax collection systems, making them more efficient and transparent. It will also enhance anti-corruption mechanisms and strengthen judicial processes for prosecuting financial crimes. The project includes updating policies in the mining sector to reduce revenue losses and boost compliance with tax regulations.

Strengthening Public Financial Management and Governance

The initiative will upgrade public financial management systems and improve anti-corruption mechanisms to ensure accountability. Additionally, it will provide capacity-building support for law enforcement agencies to tackle illicit financial flows and enforce tax obligations effectively.

Enhancing Institutional Capacity

The project will strengthen key institutions like the Liberia Revenue Authority (LRA) and the Financial Intelligence Agency (FIA). These measures aim to create a robust governance framework that aligns with international standards and fosters economic stability.

Alignment with Liberia’s Development Goals

The ISEDRMP is aligned with Liberia’s Pro-Poor Agenda for Prosperity and Development, which focuses on poverty reduction and sustainable economic growth. By improving fiscal capacity, the project will support the government in expanding public service delivery, creating job opportunities, and building public trust in government institutions.

Expert Insights on Impact

Yusuf Bob Foday, African Development Bank Officer-in-Charge for Liberia, stated: “This project directly tackles Liberia’s key fiscal and governance challenges. It will help create a modern, transparent, and inclusive public financial management system while unlocking the full potential of the country’s natural resources.”

Kevin Lumbila, Manager of the Governance and Economic Reforms Department at the African Development Bank, emphasized: “By enhancing digital systems and strengthening institutional capacities, this project will significantly improve revenue collection and public sector accountability in Liberia, laying a solid foundation for sustainable economic growth.”

Looking Ahead

The ADF’s intervention continues the African Development Bank’s long-standing support for Liberia, which began in 1967. This latest initiative will address systemic barriers to fiscal stability, boost governance reforms, and unlock the country’s economic potential, setting the stage for inclusive and sustainable development.