MONROVIA – Amidst a backdrop of stringent austerity measures and substantial budgetary contractions, Augustine K. Ngafuan steps into the demanding role of Liberia’s Minister for Finance and Development Planning, inheriting a fiscal landscape fraught with challenges. As the Unity Party-led government recalibrates its financial strategy amid a struggling economy and internal revenue pressures, Ngafuan’s tenure is marked by expectations to steer the country towards fiscal stability and developmental resilience.
Despite the Ministry being familiar grounds for Ngafuan, his return is being greeted with a recast National Budget that has been adjusted downward from US$738.9 million to US$721.5 million with slashes in several key sectors that make up the Unity Party’s ARREST Agenda.
The health sector’s allocation was revised from US$80.1 million to $78.97 million—a reduction that may appear minimal but could have outsized effects given the persistent challenges in service delivery. Education also saw a reduction from US$111.3 million to $108.4 million.
One of the most dramatic shifts in the recast budget is the substantial reduction in the Public Sector Investment Plan (PSIP), from US$95.1 million to US$62.1 million. The Ministry of Agriculture, which plays a critical role in food security and rural development, saw its budget reduced from $8.8 million to US$6.7 million.
During his takeover ceremony held at the Ministry on Monday, Ngafuan vowed to take immediate action to address the country’s economic challenges and set Liberia on a sustainable path forward. He pledged to maximize fiscal opportunities and ensure development across the nation.
“I am inheriting huge challenges,” Minister Ngafuan said, acknowledging the state of Liberia’s financial landscape. “But we have the passion to fulfill the goodwill of the people. My coming here is the fulfillment of the will of God—for Liberia to develop, for Liberians to smile.”
The new Finance Minister expressed gratitude to President Joseph Boakai for the trust placed in him to return to public service during such a critical time. “I thank President Boakai for summoning me back to the battlefield,” Ngafuan stated. “The promise must be delivered.”
He noted that his administration would tackle issues affecting the economy with a sense of urgency and efficiency. “I have come prepared to effectively carry on the task in an efficient manner,” he said. He urged staff at the Ministry to step up their efforts to ensure the ministry achieves its goals.
As part of his direction for the Ministry and the economy, Ngafuan noted that he would support the Liberia Revenue Authority in helping it achieve its revenue targets. “We must bolster the LRA’s capacity to raise more revenue for the National Government,” Ngafuan said.
Despite the government’s austerity that greatly affects public sector funding and infrastructure development, the newly appointed Finance Minister says he would prioritize infrastructure, particularly roads. “We are committed to providing more resources toward the construction of roads. Infrastructure is key to unlocking Liberia’s economic potential,” he said.
Minister Ngafuan’s appointment follows the resignation of former Finance Minister Boima Kamara, who stepped down due to health reasons. In the interim, Anthony Myers served as Acting Finance Minister and officially handed over the mantle of authority during Monday’s ceremony.
The handing over ceremony saw the attendance of various government officials, as well as local and international partners.
“Together, we will move Liberia forward. This is a task we must not take lightly, and I am ready to lead with the full support of my team and partners,” he asserted.
According to the Economic Outlook released by the World Bank last week, Liberia’s economy has seen modest recovery over the past few years, with growth rebounding post-pandemic and averaging around 5.0 percent in recent years. The economy expanded by 4.7 percent in 2023, driven primarily by growth in the mining sector, particularly gold production, which saw a significant increase of 16.4 percent. This sector was a major contributor to economic growth, alongside construction and services. However, the agriculture sector lagged, largely due to declines in key exports like rubber, palm oil, and cocoa, exacerbated by global price drops.
Despite this growth, Liberia faces several structural challenges. The country’s fiscal deficit widened to 6.1 percent of GDP in 2023 due to reduced domestic revenue and overspending. Inflation rose to 10.1 percent, driven by currency depreciation and elevated food and fuel prices. The current account deficit remained high, fueled by weak export growth and higher imports of food, fuel, and machinery.
Liberia’s medium-term growth outlook is positive, according to the Economic Outlook, with projections indicating an expansion of 5.3 percent in 2024, largely supported by the mining sector and ongoing infrastructure improvements. However, structural issues like weak fiscal management, underdeveloped infrastructure, and low investment in critical sectors like agriculture and education continue to pose risks to sustained growth.
Poverty remains high, though it has declined slightly since the peak in 2020, with the national poverty rate falling to 59.7 percent in 2023. Rising food prices remain a key driver of poverty and food insecurity.
Efforts to improve Liberia’s economic resilience will require reforms in governance, improved fiscal management, and investment in key sectors like energy and infrastructure, the World Bank recommended.
Discussion about this post