Liberia’s efforts to transform the lives of poor people have received a huge boost with financing approved today by the World Bank. Two new operations will increase access to sustainable, reliable and affordable energy, and boost economic recovery by providing employment opportunities and business skills training to vulnerable Liberians.
Funded by the International Development Association (IDA), these projects aims at improving Liberia’s economy and helping to build resilience for vulnerable households that are greatly at risk of falling into poverty due to the impact of the COVID-19 pandemic. Poverty remains widespread in Liberia and is now on the rise. An estimated 44% of Liberians were living with less than $2 a day in 2016 and is now projected to reach 52% in 2021. Access to healthcare, education, and basic utilities like energy, are also particularly low compared to the rest of the region.
“Given the devastating impact of Covid-19 on the economy and people’s livelihoods, improved energy access will stimulate inclusive economic growth while support to the informal sector will help the most vulnerable Liberians to recover from the loss in incomes,” said Khwima Nthara, World Bank Country Manager in Liberia.
The COVID-19 pandemic has had a devastating impact on Liberia’s economy and people’s livelihoods and poses a major threat going forward. When the global pandemic emerged in early 2020, Liberia was already facing a challenging domestic and external environment. Weak consumption and declining output had caused the Liberian economy to contract by an estimated 2.3 percent in 2019 and a further 2.9 percent in 2020. According to the High-Frequency Phone Survey of Households conducted by the Liberia Institute of Statistics and Geo-Information Services, more than 70 percent of households reported experiencing food shortage and increased food prices. This call for a comprehensive response focusing both on the need to protect the poor and vulnerable in the short term, as well as support economic recovery in the medium term.
“This is a demonstration of the Bank’s strong commitment to Liberia. The approved package of support will be a big boost to our Covid-19 recovery efforts and our vision to transform the economy through infrastructure development,” said Samuel D. Tweah Jr, Liberia’s Minister of Finance and Development Planning.
The support program includes the following:
The Liberia Electricity Sector Strengthening and Access Project (LESSAP) is the first project of a multi-phase programmatic approach (MPA) with a goal to provide sustainable, reliable, and affordable electricity to 632,500 Liberians. The project will rehabilitate and expand electricity infrastructure and provide sustainable solutions for electricity access. The LESSAP will target mainly two key areas – grid electrification in the greater Monrovia area and provide for a sustainable business model for scaling up renewable energy based mini-grids and stand-alone solar systems in remote areas. It will also deliver off-grid solar electrification to about 200 health facilities in particular to help build resilience against COVID-19. The total financing envelope for the MPA is $180 million in IDA support with the first phase commitment of $44 million in IDA credit and IDA grant of $15 million. The project also includes grant support of $2.5 million from the Energy Sector Management Assistance Program (ESMAP) and $2.7 million from Japan Policy and Human Resources Development Fund (PHRD), both of which will be administered by the World Bank.
The Recovery of Economic Activity for Liberian Informal Sector Employment Project (REALISE) will increase access to employment opportunities for some of the most vulnerable households in the informal sector who are at risk of falling deeper into poverty. The project will provide grants and business skills training to 4,000 vulnerable households to revive or start small businesses, as well as temporary employment and wages to 15,000 poor individuals, half of whom will be women. It will target low-income communities and poor families in Greater Monrovia. REALISE project will be implemented by the Ministry of Youth and Sports and the Liberia Agency for Community Empowerment, utilizing implementation capacities developed under the ongoing Liberia Youth Opportunities Project. The project will be financed through IDA concessional terms of $5 million credit and $5 million grant.
*The International Development Association (IDA) is the World Bank’s fund for the poorest. Established in 1960, it provides grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. IDA resources help effect positive change in the lives of the 1.6 billion people living in the countries that are eligible for its assistance. Since its inception, IDA has supported development work in 113 countries. Annual commitments are constantly on the rise and have averaged $21 billion over the past three years, with about 61% going to Africa.