Report No: ICR00245 IMPLEMENTATION COMPLETION AND RESULTS REPORT (P168218, P175570, P176993) ON A PROGRAMMATIC SERIES OF CREDITS AND GRANTS IN THE AMOUNT OF SDR98.8 MILLION (US$135 MILLION EQUIVALENT) TO THE REPUBLIC OF LIBERIA FOR FIRST, SECOND AND THIRD INCLUSIVE GROWTH DEVELOPMENT POLICY OPERATIONS February 24, 2025 Macroeconomics, Trade and Investment Western And Central Africa The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT CURRENCY EQUIVALENTS (Exchange Rate Effective as of date January 31, 2025) Currency Unit – Liberian Dollar (LD) US$1.00 = LD 196.0 US$1.00 = SDR 0.767 FISCAL YEAR January 1 - December 31 Regional Vice President: Ousmane Diagana Country Director: Robert R. Taliercio Regional Director: Abebe Adugna Dadi Practice Manager: Sandeep Mahajan Task Team Leader (s): Muhammad Waheed ICR Main Contributor: Phil English The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ABBREVIATIONS AND ACRONYMS Acronym Full Name CBL Central Bank of Liberia CARI Central Agricultural Research Institute CET Common External Tariff DFS Digital Financial Services ECOWAS Economic Community of West African States ECF Extended Credit Facility FY Fiscal Year GNI Gross National Income GDP Gross Domestic Product IMF International Monetary Fund IFRS International Financial Reporting Standards IGDPO Inclusive Growth Development Policy Operation IMIS Integrated Management Information System LACRA Liberia Agriculture Commodity Regulatory Authority LEC Liberia Electricity Corporation LERC Liberia Electricity Regulatory Commission LHSR Liberia Household Social Registry MFDP Ministry of Finance and Development Planning MoGCSP Ministry of Gender, Children and Social Protection MSME Micro, Small and Medium Enterprises NTBs Non-Tariff Barriers NIR National Identification Registry NSB National Seed Board PAPD Pro-Poor Agenda for Prosperity and Development PV Photovoltaic REALISE Recovery of Economic Activity for Liberian Informal Sector Employment SDCA Seed Development and Certification Agency SFR Statement of Fiscal Risk SOEs State-Owned Enterprises SSN Social Safety Nets UN United Nations UNHCR United Nations High Commissioner for Refugees UAT User Acceptance Testing The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT TABLE OF CONTENTS DATA SHEET ......................................................................................................................................................... i I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES .................................................................................... 3 II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES .............................................................................. 6 III. OTHER OUTCOMES AND IMPACTS .................................................................................................................. 16 IV. BANK PERFORMANCE ...................................................................................................................................... 18 V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES .............................................................................. 19 VI. LESSONS AND NEXT PHASE.............................................................................................................................. 20 ANNEX 1. RESULTS FRAMEWORK ............................................................................................................................ 22 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................................................... 24 ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’ COMMENTS 28 ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES.................................................................................... 28 ANNEX 4. SECTORS AND THEMES ........................................................................................................................... 35 ANNEX 4. SUPPORTING DOCUMENTS ..................................................................................................................... 39 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT DATA SHEET @#&OPS~Doctype~OPS^dynamics@icrdpfseriesbasicdata#doctemplate PROGRAM SERIES Program Information Operation Short Operation ID Position in series Status Operation Name Name Liberia IG DPO- Liberia First Inclusive Growth Development P168218 First Closed 1 Policy Operation Liberia Inclusive Liberia Second Inclusive Growth P175570 Intermediate Closed Growth DPO 2 Development Policy Operation Liberia Inclusive Liberia Third Inclusive Growth Development P176993 Last Closed Growth DPO 3 Policy Operation Program Series Amounts (USD) Operation ID Ln/Cr/TF Approved Amount Disbursed Amount IDA-E1260 7,459,476.00 7,461,870.00 P176993 IDA-72100 46,981,612.00 46,996,690.00 IDA-D5720 19,926,080.00 19,926,079.98 P168218 IDA-65620 19,926,080.00 19,926,079.98 IDA-69060 20,000,000.00 20,000,000.00 P175570 IDA-D8400 19,935,020.00 19,935,020.00 Total 134,228,268.00 134,245,739.96 DPF Options P175570 P176993 P168218 Crisis or Post Conflict No No No Regular Deferred Drawdown Option No No No Catastrophe Deferred Drawdown Option No No No Sub-National Lending No No No Special Development Policy Lending No No No i The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT CLIENTS Operation ID Borrower/Recipient Implementing Agency Ministry of Finance and Development P168218 Republic of Liberia Planning Ministry of Finance and Development P175570 Republic of Liberia Planning Ministry of Finance and Development P176993 The Republic of Liberia Planning PROGRAM DEVELOPMENT OBJECTIVE Program Development Objective The program development objectives of these series are: 1) removing distortions in selected sectors and strengthening public-sector transparency; and 2) promoting economic and social inclusion. @#&OPS~Doctype~OPS^dynamics@icrdpfseriesfinancing#doctemplate FINANCING Original Amount Revised Amount Actual Disbursed Financing Source Operation in series (US$) (US$) (US$) World Bank Financing 135,000,000.00 134,228,268.00 134,245,739.96 IDA-E1260 P176993 7,500,000.00 7,459,476.00 7,461,870.00 IDA-72100 P176993 47,500,000.00 46,981,612.00 46,996,690.00 IDA-D5720 P168218 20,000,000.00 19,926,080.00 19,926,079.98 IDA-65620 P168218 20,000,000.00 19,926,080.00 19,926,079.98 IDA-69060 P175570 20,000,000.00 20,000,000.00 20,000,000.00 IDA-D8400 P175570 20,000,000.00 19,935,020.00 19,935,020.00 Total 135,000,000.00 134,228,268.00 134,245,739.96 KEY DATES P168218 P176993 P175570 Concept Review 07-Nov-2019 24-Oct-2021 05-Feb-2021 Decision Review 29-Jan-2020 03-May-2022 20-Apr-2021 Approval 16-Mar-2020 29-Sep-2022 16-Jun-2021 Effectiveness 24-Mar-2020 11-Nov-2022 29-Jun-2021 ii The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Original Closing 29-Sep-2021 31-Dec-2023 31-Dec-2022 Actual Closing 29-Sep-2021 31-Dec-2023 31-Dec-2022 @#&OPS~Doctype~OPS^dynamics@icrdpfratings#doctemplate RATINGS SUMMARY Overall Outcome Relevance of Prior Actions Achievement of Objectives (Efficacy) Moderately Satisfactory Satisfactory Moderately Satisfactory Bank Performance Moderately Satisfactory iii The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ADM STAFF At ICR Practice Manager Sandeep Mahajan Regional Director Abebe Adugna Dadi Global Director Maria Manuela Do Rosario Francisco Practice Group Vice President Pablo Saavedra Country Director Robert R. Taliercio Regional Vice President Ousmane Diagana ADM Responsible Team Leader Muhammad Waheed Co-Team Leader(s) At Approval of P175570 Practice Manager Francisco Galrao Carneiro Regional Director Abebe Adugna Dadi Global Director Marcello Estevão Practice Group Vice President Indermit Gill Country Director Pierre Frank Laporte Regional Vice President Ousmane Diagana ADM Responsible Team Leader Mamadou Ndione Co-Team Leader(s) At Approval of P176993 Practice Manager Francisco Galrao Carneiro Regional Director Abebe Adugna Dadi Global Director Marcello Estevão Practice Group Vice President Pablo Saavedra Country Director Pierre Frank Laporte Page 1 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Regional Vice President Ousmane Diagana ADM Responsible Team Leader Mamadou Ndione Co-Team Leader(s) At Approval of P168218 Practice Manager Abebe Adugna Dadi Regional Director Asad Alam Global Director Marcello Estevão Practice Group Vice President Country Director Pierre Frank Laporte Regional Vice President Hafez M. H. Ghanem ADM Responsible Team Leader Marina Bakanova Co-Team Leader(s) Page 2 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT I. PROGRAM CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Poverty remains widespread in Liberia, and progress on poverty reduction has been slow. With a gross national income (GNI) per capita of just US$600 in 2018, Liberia is among the ten poorest countries in the world. From 2007 to 2014, Liberia’s per capita GDP growth rate averaged 3.3 percent per year, which helped reduce the poverty rate3 from 68.6 percent in 2007 to 38.6 percent in 2014. However, from 2014 through 2019 per capita GDP contracted at an average rate of 2 percent per year, causing the poverty rate to rise to an estimated 43.4 percent by 2019. Non-monetary poverty indicators, including access to healthcare, education, and basic utilities, are also low by regional and international standards, with especially acute rural/urban and gender disparities driven by unequal access to land and productive assets, infrastructure, public services, and markets for both goods and labor. 2. From 2016 to 2018, Liberia’s annual GDP growth rate averaged just 0.7 percent. The Liberian economy was still struggling to fully recover from the effects of multiple shocks, including the regional Ebola outbreak, a sustained slump in global prices for major export commodities (including rubber, iron ore, and palm oil), the withdrawal of UN peacekeeping forces, a decline in foreign aid, and policy uncertainty arising from both the political transition and the new government’s policy slippages. Multiple persistent distortions in factor and product markets contributed to low and declining rates of productivity growth, which inhibited structural transformation and slowed job creation. 3. Liberia’s governance steadily improved from 2005 through 2011, but progress began to slow after the initial post-conflict recovery. Limited institutional capacity and entrenched patronage systems were major obstacles to reform in Liberia. While the administration of President Ellen Sirleaf Johnson increased transparency and accountability in the public administration, corruption continued to affect all aspects of public service delivery. The new administration of President George Weah assumed office under enormous pressure from its youthful constituency to deliver jobs and improve public services. The inexperience of the new government, a rush to deliver on election promises, and longstanding weaknesses in administrative capacity perpetuated key governance challenges. 4. After some delay, the Government took critical steps to restore macroeconomic stability, promote good governance, and renew progress on the structural reform agenda. The authorities: (i) reached an agreement on a new four-year Extended Credit Facility (ECF) arrangement with the International Monterey Fund (IMF) and began implementing important macroeconomic and fiscal management reforms; (ii) passed a credible budget for fiscal year (FY)2019/2020 that consolidated the public finances, rationalized the wage bill, and improved domestic revenue mobilization while protecting social spending and strengthening fiscal oversight ; (iii) significantly tightened the monetary policy stance to control inflation; and (iv) passed legislation addressing a variety of governance issues, including the Land Rights Act, the Power Theft Act, the Modernized Customs Code, and the Amended Public Finance Management Act. Revenues and the overall fiscal balance improved significantly between 2019 and 2020 (see Table 1). A renewed policy dialogue with the World Bank and other development partners laid the groundwork for implementing the reforms supported by the new Inclusive Growth DPO series. 5. The World Bank proposed the Inclusive Growth DPO programmatic series of three single-tranche operations designed to support the Government as it implemented a structural reform program focused on productivity-driven private-sector-led growth, improved public-sector transparency, and greater economic and social inclusion. It was closely aligned with the objectives of the World Bank Group’s Country Partnership Framework (CPF) for Liberia and Liberia’s medium-term development plan, the Pro-Poor Agenda for Prosperity and Development (PAPD) 2018-2023. The prior actions were clearly aligned with all three objectives of the first CPF pillar: greater Page 3 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT transparency, accountability and efficiency in the public institutions, a more conducive environment for commercial agriculture, and a more enabling environment for MSMEs. There was also a direct link to both objectives in the third CPF pillar: improved access to utilities, and more resilient urban environments and rural communities. This series built on the unfinished reform agenda supported by the previous series, notably in electricity sector management and public finance oversight and accountability. Table 1: Liberia - Selected Economic Indicators, 2017-2026 Source: GOL (Ministry of Finance and Development Planning - MFDP and CBL), IMF, and WBG staff, May 2023 Page 4 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Original Program Development Objective(s) (PDO) 6. The program development objectives are: 1) removing distortions in selected sectors and strengthening public-sector transparency; and 2) promoting economic and social inclusion. Original Policy Areas/Pillars Supported by the Program 7. Pillar 1 of the proposed series focuses on removing distortions in selected sectors and strengthening public- sector transparency to support inclusive growth. Policy areas supported under this pillar included agriculture, energy, trade, tax incentives, oversight of state-owned enterprises (SOEs), and debt transparency. Agricultural productivity growth was constrained by very low rates of access to improved seeds and other agricultural inputs, as well as weak incentives undermining the private sector’s participation in input markets. In addition, climate risks— especially higher temperatures and increased flooding— required the adoption of climate-resilient seeds and the dissemination of adaptive production processes. Meanwhile, a costly and unreliable electricity supply inhibited private investment and growth, particularly in light manufacturing and agro-processing. Strengthening the financial viability of the energy sector while expanding access to affordable electricity was crucial to improving productivity and boosting living standards while mitigating the risks that climate change posed to hydropower production. Reducing trade costs could help increase export competitiveness outside the natural-resource sector and encourage investment in areas that had a high poverty impact and where Liberia had an underexploited comparative advantage (e.g., agriculture and agro-processing). Streamlining tax incentives would reduce rent-seeking behavior, curb fiscal leakages, and provide a level playing field for private investors. Finally, strengthening SOE oversight and improving debt management and transparency would contribute to better governance and responsible borrowing. Together, these reforms were expected to improve productivity, promote economic diversification, enhance transparency and public-sector efficiency, expand employment opportunities, and raise income levels among poor households. 8. Pillar 2 of the proposed series supported measures to promote economic and social inclusion. Reforms in this area were aligned with the government’s objectives for improving public service delivery, especially to the poorest households. Policy actions focused on institutional reforms in financial inclusion and social safety nets (SSN). Strengthening the regulatory framework for financial inclusion, including for digital finance, would improve access to formal financial services among excluded and underserved groups, particularly women, facilitating inclusive economic participation, asset accumulation, and income growth. Reforms that increase the efficiency and financial accountability of SSN programs were necessary to create a sustainable system and maximize its impact on poverty alleviation. SSN programs will also help low-income households cope with climate-related shocks, especially those caused by extreme weather events. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION Revised Program Development Objectives (PDOs) 9. No change. Revised Policy Areas/Pillars supported by the Program 10. The area of trade was dropped after the first operation in order to streamline the program. The implementation of the program faced significant challenges due to the negative impact of the COVID-19 pandemic. To improve the program's focus and manageability, the Operations Policy and Country Services (OPCS) recommended scaling back the program. They advised that the original scope was overly ambitious and dispersed, considering the onset of COVID-19 and the limited capacity within the government. Page 5 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Other Changes 11. Three prior actions were dropped for the second operation. These involved the adoption of strategies. Bank guidelines no longer considered these appropriate as prior actions in DPOs as they do not represent legally binding obligations. A strategy by itself is only aspirational and often they are not implemented. 12. The COVID pandemic erupted one month after the first operation in the series was approved. To contain the spread of the virus, the Government declared a state of emergency between April 10 and July 22, 2020, and imposed lockdown measures. This resulted in a 3 percent decline in GDP in 2020. While this did not change the government’s overall reform agenda, it did shift priorities in favor of short-term support to mitigate the negative impact. 13. Additional financing of US$15 million was obtained for the third operation from the IDA20 Window for Host Communities and Refugees, which led to the revision of one prior action. II. ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES Table 2: Policy and Results Framework – Original and Revised Indicative Triggers (from DPF1) Indicative Triggers (from Prior Actions for DPF1 and DPF1) and Results Indicators (original Prior Actions for DPF2 Prior Actions for DPF3 (DPF1) and revised) PILLAR 1: Removing Distortions in Selected Sectors and Strengthening Public-Sector Transparency Prior Action 1: The Indicative Trigger 1: To Indicative Trigger 1: To Result Indicator 1: Number of Recipient has enacted the strengthen seeds regulatory strengthen implementation Licensed Private Firms in the Liberia Seed Development framework, the Recipient of national seeds regulatory Seed Sector and Certification Agency has: (i) approved regulations framework, the Recipient Act to establish a Seed to implement Liberia SDCA has instituted and Results Indicator 2: Share of Development and Act; (ii) revised National published on-line the domestic rice production in total Certification Agency Seeds Policy. National Catalogue for rice consumption (%) (SDCA) to, inter alia, Plant Species and Varieties. provide for sustainable Indicative Trigger 2. The Indicative Trigger 2. The Revised Indicator 1: Quantity of seeds delivery system and Recipient’s Cabinet approved Recipient has implemented a certified rice seeds available to private sector participation National Rice Development gradual transition to the farmers (KG) in seeds production and Strategy for Liberia for 2020- ECOWAS Common External marketing. 2023 Tariff (CET) on rice. Baseline (2018): 0 Target (2023): 2,000 Prior Action 1: The Recipient, Prior Action 1: The Recipient through its Ministry of has through its Ministry of Agriculture‘s National Seed Agriculture‘s National Seed Board, has approved the Board (NSB): (a) issued a Liberia Seed Development and Resolution on National Certification Regulations, dated Catalogue of Crop Varieties April 15, 2021, to inter alia Released and Registered in promote private sector Liberia dated April 6, 2022; participation in seed and (b) published on-line, the production and marketing; as National Catalogue for Plant Species and Varieties dated Page 6 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT indicated in the Board Minutes 2022 in accordance with the dated April 13, 2021. ECOWAS Regulation on Harmonization of the Rules governing quality control, in the ECOWAS. Prior Action 2: The Indicative Trigger 3: To Indicative Trigger 3: The Result Indicator 3: LEC Recipient has, through its reduce energy costs and Recipient has approved mini- commercial losses (%) Liberia Electricity accelerate access to grid regulations that, inter alia, Corporation (LEC), electricity, the Recipient has open opportunities for private Revised Indicator 2a: LEC overall approved the LEC Business approved a National investment in mini-grids and transmission and distribution Plan (2019-2023) which Electrification Strategy, which help reduce energy cost. losses (percent) addresses key operational includes both grid and off- Baseline (2018): 63 challenges to reduce grid technology options. Prior Action 2: The Recipient Target (2023): 55 commercial losses in the Indicative Trigger 4. The has through the LERC, energy sector. Recipient approved a approved the publication of “lifeline” tariff policy, the new tariff rates for end Result Indicator 4. Energy tariffs allowing for a progressive users to further address for poor HH (c/kwh) tariff regime, addressing affordability barriers for affordability barriers for poorer population and Revised Indicator 2b: Health poorer population. disincentivize power theft, as facilities provided with electricity evidenced by the Order dated service from stand-alone solar December 10, 2021. systems (number) Prior Action 2: The Recipient, through the LERC, has pursuant Prior Action 3: The Recipient Baseline (2019): 0 to its letter dated September has granted duty waiver for Target (2023): 50 21, 2020, provided Provisional Quality-verified Solar Products Approval of the Liberia to facilitate private investment Electricity Corporation (LEC)’s in solar mini-grid to make off- “Life-Line Tariff” to address grid solutions affordable to affordability barriers for poorer remote rural population, as population and disincentivizes evidenced by Executive Order power theft, and LEC has No. 107 dated April 27, 2022. commenced implementation of said tariff as evidenced by its announcement on its website effective May 1, 2021. Prior Action 3: The Indicative Trigger 5: The Indicative Trigger 4: The Result Indicator 5. Cost to Recipient has enacted a Recipient’ Cabinet has: (i) Recipient further reduces export: Border Compliance (US$) Modernized Customs Code approved implementing NTBs in line with the which provides for, inter regulations for the new recommendations of the alia, greater transparency Customs Code; (ii) completed assessment. Result Indicator 6. Cost to and accountability of assessment of non-tariff import: Border Compliance (US$) customs decisions and barriers (NTBs) to trade and Prior Action: None procedures and facilitation eliminated the most Revised Indicator: None of international trade. distortionary. Prior Action: None Prior Action 4: The Indicative Trigger # 6: The Indicative Trigger 5: Tax Result Indicator 3. Share of tax Recipient has, through its Recipient has streamlined and expenditures report is expenditures in total domestic Ministry of Finance and consolidated all duty and tax prepared and published in line revenues (%) Page 7 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Development Planning waivers in the Revenue Code with the amended Revenue (MFDP): (a) established an and submitted the amended Code. intergovernmental Revenue Code to the Baseline (2018): 32.6 Technical Tax Expenditure legislature. Prior Action 4: The Recipient Target (2023): 20 Committee; and (b) through its MFDP, has in suspended the issuance of Prior Action 3: The Recipient accordance with the Amended Investment Incentive through its MFDP, has Revenue Code streamlined Certificates pending submitted to the Recipient’s and consolidated duty and tax permanent streamlining parliament for approval, a draft waivers by limiting the sectors until June 2020, all for the amendment to the Revenue and business activities purpose of reducing rent- Code of Liberia, to inter alia qualifying for incentives; as seeking behavior, streamline and consolidate evidenced by Administrative strengthening duty and tax waivers, as Regulation No. 02.16- transparency, and creating evidenced by the letter from 1/MFDP/27 October 2021. fiscal space. the Deputy Chief Clerk of Parliament dated May 4, 2021, acknowledging receipt of said draft Amendment. Prior Action 5: The Indicative Trigger # 7. To Indicative Trigger 6. To Result Indicator 8. Published Recipient has enacted strengthen the oversight of strengthen debt transparency, Statement of Fiscal Risks from the Amendment and and reduce fiscal risks from the Recipient: (i) established a SOEs (Y/N) Restatement of the SOEs, the Recipient’s MFDP: comprehensive database of Public Financial (i) submitted the SFR to the public debt, incl. debt of SOEs Result Indicator 9. Published Management Act of legislature alongside with the and public-private audited SOE reports (number) 2009 to, inter alia, National Budget FY2021; (ii) partnership; and (ii) published provide for the: (a) expanded the coverage of quarterly debt reports on its Revised Indicator 4. SOEs with submission of annual SOEs reporting to its SOE website. debt information published in statement of fiscal risk monitoring department. the Public Debt Management from State-owned Prior Action 5: The Recipient reports (number) Enterprises (SOEs) Indicative Trigger 8. To through its MFDP has: (a) along with the budget strengthen debt management instructed all SOEs to submit, Baseline (2019): 0 proposal for following and transparency the Recipient on a quarterly basis, data on Target (2023): 8 year; and (b) has: (i) published Medium-term all debt (guaranteed and non- publication of SOEs Debt Management Strategy; guaranteed, direct and on- financial statements and (ii) expanded the coverage lent) to the SOE, Financial based on International of debt recording by including Reporting and Coordination Financial Reporting information on SOEs liabilities, Unit and the DMU at MFDP, Standards (IFRS), for debt, guarantees. as evidenced by Circular the purpose of dated May 12, 2022; and (b) strengthening Prior Action 4: The Recipient, published the validated and transparency and through its MFDP, has issued a verified said debt information improving oversight of letter dated May 3, 2021, to in its quarterly Public Debt SOEs. the Debt Management Unit Management Report. instructing it to include the liabilities, debt and, guarantees of at least five critical SOEs into the quarterly Public Debt Management Report; and the Debt Management Unit has incorporated and published said information its initial Page 8 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT quarterly report dated March 2021 (as revised on May 3, 2021. PILLAR 2 Promoting economic and social inclusion Prior Action 6: The Indicative Trigger 9: The CBL Indicative Trigger 7: The CBL Result Indicator 10: Percent Recipient has, through its has: (i) approved revised the has established and made of adults with accounts at Central Bank of Liberia, consumer protection operational a digital credit financial institutions (%) issued Regulations regulations with provisions on registry with adequate staff Concerning Licensing and digital credit; and (ii) submitted and resources. Revised Result Indicator 5a: Operations of Electronic to the legislature a revised Adults with financial Payment (e-payment) Payment Systems Act. transaction accounts Services to, inter alia, Prior Action 6: The Recipient (percentage) promote financial inclusion Prior Action 5: The Recipient, has through the CBL Board, and safe and efficient through its Central Bank, has authorized the use of digital Baseline (2018): 35.7 delivery of quality submitted to the Recipient’s credit to promote access to Target (2023): 45 payment services. parliament for approval, a draft DFS; as evidenced by amendment to the Payment Resolution No. BR-05-/2022 Systems Act, 2014 to inter alia dated March 17, 2022. Result Indicator 11. Gender gap promote access to digital in account ownership financial services, as evidenced (percentage points) by the letter from the Deputy Chief Clerk of Parliament dated Revised Result Indicator 5b. May 4, 2021, acknowledging Gender gap in financial receipt of said draft transaction account Amendment. ownership (percentage points) Baseline (2018): 35.5 Target (year): 25.0 Prior action 7. The Indicative Trigger 10. The Indicative Trigger 8. To sustain Result Indicator 6: Number of Recipient has, through its Recipient has: (i) approved new SSN system and expand its extreme poor households Cabinet, issued the medium-term National Social scope nationwide, the receiving regular cash transfers, Cabinet Resolution Protection Strategy; and (ii) Recipient approves a total and by gender of HH: (i) Concerning National established a monitoring and transition plan that includes female HH; (ii) male-HH Household Social Registry information system to collect adequate financing from the (number) (NHSR) which endorses the data on the provision of social National Budget for 2023. setting up of the NHSR as protection services. Revised Result Indicator 6a: the principal mechanism Prior Action 7: The Recipient Extreme poor households for identifying and Prior Action 6: The Recipient has authorized: (a) all receiving regular cash transfers targeting beneficiaries of through its Ministry of Gender, beneficiaries of social (number) various social protection Children and Social Protection assistance and safety net programs national-wide. (MoGCSP) has operationalized programs enrolled in the Baseline (2018): 0 an IMIS to implement and LHSR, including eligible Target (2023): 20,000 coordinate the social programs refugees, to receive at no cost of participating institutions, as national ID cards and (b) evidenced by its issuance of a refugees whose refugee status New Result Indicator 6b: UAT and the MIS generation of is about to end and who wish Refugees whose former MIS Deployment Notes. to stay as permanent residents status ended on 30 June 2022 in Liberia after June 30, 2022 who have acquired following the entry of the permanent residence and UNHCR Refugee Cessation have appropriate documents Page 9 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Requirements to: (i) enable permitting their legal stay in their continuing access to Liberia (number) basic services; and (ii) early regularization of their long- Baseline (2021): 0 term status as permanent Target (2023): 2,000 resident, as evidenced by Executive Order No 108 dated April 27, 2022 Tranche # Amount Expected Actual Release Release Date Release Date Tranche 1 USD40 million 24/03/2020 24/03/2020 Regular Tranche 2 USD40 million 29/06/2021 29/06/2021 Regular Tranche 3 USD55 million 11/11/2022 11/11/2022 Regular A. RELEVANCE OF PRIOR ACTIONS Rating: Satisfactory 14. Reducing the food-import bill and strengthening food security are key objectives of the PAPD . To strengthen food security, Liberia must increase the domestic production of high-yielding, disease- and pest-resistant seed varieties tailored to local ecological conditions. The agriculture sector remains dominated by low-productivity smallholder farms operating at semi-subsistence levels. In 2018, Liberia’s average rice yield was 1.26 metric tons per hectare (MT/HA), roughly half the regional average, and far below the global average. Over 50 percent of total crop yields reflects the genetic potential of the crop, which is determined by the seed variety, yet very few Liberian farmers use improved seed varieties. Most seeds are not locally bred to account for prevailing agro-ecological conditions and are rarely resistant to pests and diseases, or resilient to climate change. The reforms supported by this series would improve the quality of seeds through certification and increase the supply by encouraging private provision, with a particular focus on rice as the most important staple crop. The preparation of a National Catalogue of Plant Species and Varieties would ensure that imported seeds are appropriate for Liberia's conditions. As such, the program addressed a key constraint in a high priority sector. However, a trigger to increase protection on rice was dropped when the government decided they wanted to follow a more gradual approach. This was partly informed by a WB PSIA which raised questions about the poverty impact. Perhaps the PSIA should have been completed before this prior action was adopted. 15. Electricity access and cost represented binding constraints on Liberia’s competitiveness and a major obstacle to improved living standards. Tariffs were the highest in the world and unaffordable for most of the population. Less than 2 percent of rural households had access to electricity. The index for the reliability of supply and transparency of tariffs was as low as it can go. The financial situation of the Liberia Electricity Corporation was precarious. The reforms supported in this program were designed to improve the financial status of LEC while increasing access. A new business plan laid out various measures to reduce commercial losses, including by cracking down on power theft. At the same time, reductions in electricity tariffs were expected to lower the incentive for illegal connections while addressing the affordability challenge. The use of localized mini-grids based on solar- or hydropower was determined to be the least- cost option for producing electricity in some areas of the country and provide opportunities to leverage private-sector participation. Initial triggers were retained, with minor changes to improve clarity. Page 10 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT 16. Trade reforms can boost productivity by expanding access to foreign markets and inputs. While Liberia’s tariff rates were relatively low compared to its peers in West Africa, numerous, opaquely applied non-tariff barriers (NTBs) increased the cost of cross-border trade. In the most recent Enterprise Survey (2017), 29.3 percent of Liberian firms cited customs and trade regulations as the biggest obstacle to their operation—the largest share among peer countries and well above the ECOWAS average. The new Customs Code would facilitate trade, increase revenue collection, enhance transparency, promote fairness and accountability in customs actions and decisions, and protect Liberia’s people and industries against threats to their safety, security, and economic wellbeing. Implementing regulations would be needed, along with an assessment of other NTBs not related to customs. All triggers were dropped after DPO1 when it was decided to simplify the program. 17. Liberia’s tax-to-GDP ratio was 11.5 percent in 2018, one of the lowest in ECOWAS. It had been declining since 2012. The low level of domestic revenue mobilization limited the government’s ability to provide public services and maintain sustainable fiscal balances. Inadequate public service delivery, in turn, hindered productivity growth and slowed improvements in living standards. An extensive array of tax exemptions eroded the already narrow revenue base and distorted economic incentives. Tax expenditures rose from 19.4 percent of domestic revenue in FY 2015/2016 to 32.6 percent in 2017/2018, and that excluded nontax fiscal incentives. A preliminary analysis suggests that more than 50 percent of the waivers granted were not meeting the expectations set forth in their applications criteria. Under the program, the authorities would streamline and consolidate duty and tax exemptions and improve transparency through publication of remaining tax expenditures. Triggers were maintained, with only minor changes in wording. 18. Debt levels were rising in 2019, aggravated by fiscal risks associated with state-owned enterprises. Liberia’s total public debt stock more than doubled as a share of GDP, rising from 24.3 percent in FY2015 to 54.1 percent in FY2019. There were 34 SOEs operating in a wide range of sectors, including public utilities, infrastructure, agriculture, manufacturing, and financial services. Only 15 of these SOEs were being monitored, but their liabilities were estimated at US$644.5 million, or 19.8 percent of 2018 GDP. The LEC was the largest of them. SOE debt reporting was to be strengthened under the program with the expansion of coverage, including non-guaranteed debt, and greater transparency through public reports. In addition, the national budget would henceforth include SOE financial statements based on International Financial Reporting Standards, as well as a statement of SOE-related fiscal risks. Finally, the Medium-Term Debt Management Strategy would be updated. Once again, triggers were generally retained, with the added clarifications. 19. These five sets of reforms were well-aligned with the objective of the first pillar. Agriculture, energy and trade represented three high priority sectors in need of reforms to remove distortions. Within agriculture, there was a narrow focus on seeds, and particularly rice. In energy, a balanced approach was adopted to tackle the financial health of the electricity company, while also promoting access by poor households. In both sectors, private participation was to be encouraged. In trade, the program targeted non-tariff barriers in customs and beyond. The last two areas of reform in this pillar supported public-sector transparency and macroeconomic stability. The commitment to a reduction in tax expenditures was an important part of the strategy to reverse the fall in tax revenues. Similarly, addressing SOE fiscal risks would help control rising public debt. In both cases, enhanced reporting would help keep the pressure on authorities to implement the reforms. 20. The last two reform areas focused on economic and social inclusion. Access to financial services is often critical for economic inclusion. Only 35.7 percent of Liberians over the age of 15 had access to financial services in 2017, which was below the average for low-income countries in Sub-Saharan Africa. However, this number was rising rapidly thanks to the introduction of mobile money. The DPO series aimed to facilitate the use of digital financial services and particularly digital credit. This included legal amendments to include persons without smartphones, expanding digital payments to the retail space, and improving credit information to reduce the risks for financial institutions. It was expected that this would expand the number of accounts at financial institutions and reduce the gender gap, as digital payment systems have proven to be more accessible for women. The emphasis on retail payment systems was expected Page 11 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT to be particularly gender-sensitive. Later, it was recognized that it would be more appropriate to measure the growth in all transaction accounts and not just those at financial institutions, so the indicator was revised. Triggers were somewhat modified but pursued the same overall objectives. 21. The social safety net was the final area of reform. Liberia's social protection system was at a very early stage of development in 2019. Benefits were almost negligible, contributing just 3.4 percent to the consumption of beneficiary households, and their impact on poverty was very limited. Programs were donor-driven and therefore fragmented and uncoordinated. A cash transfer program was just getting started. The DPO series supported the creation of a National Household Social Registry, a consolidated database to enable the Government to efficiently target households in need of support, while harmonizing programs and reducing leakages and redundancies. Expanding coverage would then require a monitoring and information system to strengthen financial accountability, identify efficiency gains, and reduce overhead costs. To ensure sustainability, the government would need to take ownership of the social safety net by allocating more of its own resources. Thus, a transition plan with adequate funding in the 2023 budget was called for. This trigger was dropped when it became clear that the government budget did not have sufficient resources, due in large part to the recent demands for COVID relief and the limitations of an IMF-supported program. On the other hand, a new prior action was added to support additional financing from the Window for Host Communities and Refugees. 22. The prior actions were especially relevant as they supported World Bank Group investment projects . These included the Smallholder Agriculture Transformation and Agribusiness Revitalization Project (P160945), the Rural Economic Transformation Project (P175263), the Liberia Accelerated Electricity Expansion Project (P133445), the Liberia Electricity Sector Strengthening Project (P173416), the Public Financial Management Reforms Institutional Strengthening Project (P165000), the Liberia Digital Financial Services IFC Project (ID606971), and the Liberia Social Safety Nets Project (P155293). In one case, they supported IMF technical assistance. 23. The overall relevance of the prior actions was “Satisfactory”. While each individual action was closely linked to government priorities and World Bank comparative advantage, together they constituted an ambitious agenda which proved challenging to implement. The Program Development Objective was concise and clearly stated. B. ACHIEVEMENT OF OBJECTIVES (EFFICACY) Rating: Moderately Satisfactory Table 3: Status of Results Indicators Indicator Baseline, Targets and Actual Level of achievement Quantity of certified rice seeds available to farmers Baseline (2018): 0 Not achieved (KG) Target (2023): 2,000 Current status (2023): 0 LEC overall transmission and distribution losses Baseline (2018): 63 Fully achieved (percent) Target (2023): 55 Current status (2023): 46# Health facilities provided with electricity service Baseline (2019): 0 Partially achieved from stand-alone solar systems (number) Target (2023): 50 (24 percent) Current status (2024): 12 Page 12 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Share of tax expenditures in total domestic Baseline (2018): 32.6 Not achieved revenues (%) Revised baseline (2019): 22.9* Target (2023): 20 Current status (2021): 30.1* SOEs with debt information published in the Public Baseline (2019): 0 Partially achieved Debt Management reports (number) Target (2023): 8 Current status (2023): 15** Adults with financial transaction accounts Baseline (2018): 35.7*** Fully achieved (percentage) Target (2023): 45 Current status (2021): 52*** Gender gap in financial transaction account Baseline (2018): 35.5 Partially achieved ownership (percentage points) Revised baseline (2017): 16*** Target (2023): 25.0 Current status (2021): 15*** Extreme poor households receiving regular cash Baseline (2018): 0 Partially achieved (20 percent) transfers (number) Target (2023): 20,000 Current status (2024): 4,000 Refugees whose former status ended on 30 June Baseline (2021): 0 Not achieved 2022 who have acquired permanent residence and Target (2023): 2,000 have appropriate documents permitting their legal stay in Liberia (number) Current status (2024): very few #World Bank, Liberia Economic Update, June 2024. *Liberia Revenue Authority, Liberia Tax Expenditure Report, April 2024. https://revenue.lra.gov.lr/wp- content/uploads/2024/05/Tax-Expenditure-Report-April-2024.pdf **Government of Liberia, Ministry of Finance and Development Planning, Public Debt Management Report, April-June 2024. https://www.mfdp.gov.lr/index.php/main-menu-reports/mm-em/mm-em-db/quarterly-debt-and-management- report ***Global Findex Database 2021. https://www.worldbank.org/en/publication/globalfindex/Data 24. The DPO series has shown mixed results, in a difficult setting exacerbated by capacity constraints, a complex political economy, and major external shocks. Two of the results targets were fully achieved. Four more showed some progress. The remaining three targets were not achieved. Weak human and financial capacity and the change in government in 2023 were three factors impeding swifter progress. In the Liberian system, many senior civil service positions are political and therefore change with the arrival of a new government. 25. The agriculture reforms had mixed success. The SDCA was legally created but could not be operationalized due to lack of funds. The government was projecting an overall fiscal balance including grants of –4.3 percent in 2022 and could not justify the creation of a new agency with all its cost implications. Instead, it proposed to achieve the same Page 13 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT objectives using existing institutions. The Ministry of Agriculture put in place a committee composed of all relevant stakeholders to serve as an interim National Seed Board and used existing technical departments, including the Central Agricultural Research Institute (CARI) and the Liberia Agriculture Commodity Regulatory Authority (LACRA) to certify the seeds in line with the LSDCA Act (IGDPO1 prior action #1) and its implementation regulation (IGDPO2 prior action #1). CARI created an ad-hoc seed system which markets improved varieties through various farmers’ networks and the Ministry of Agriculture's county extension teams. Unfortunately, with the change in government in 2023, key personnel were replaced and this system ceased to function. Private seed suppliers are estimated to handle 40 to 70 percent of all seeds marketed, but the government does not have a system to certify private sector seeds. 26. The national seed catalogue is being used. Donor-financed agriculture projects are using the catalogue to guide their use of imported seeds. The catalogue is not meant to control the private importation of seeds, which does not currently exist. 27. Energy sector reforms were somewhat more successful. Overall transmission and distribution losses fell from 63 percent to 46 percent. Commercial losses as a percentage of total electricity supply – the more appropriate indicator for this DPO program – decreased to 51 percent in 2020, 47.7 percent in 2021, 41.3 percent in 2022, and 31.4 percent in 2023. The absolute size of these losses has fluctuated between 2020 and 2022 before rising in 2023. However, with the doubling of total electricity supply from 235.644 GWh in 2020 to 447.15 GWh in 2023, the share of commercial losses has fallen significantly. LEC regularized more than 50,000 unauthorized and illegal connections to the electric network through its anti-power theft enforcement exercise, robust customer service, and metering. While commercial losses were probably the best choice of indicator, and the one initially used by the program, this was later replaced by the broader "transmission and distribution losses" which includes technical losses. These have remained fairly constant at 15 percent, so all the progress in the indicator is due to reduced commercial losses. 28. The financial status of the Liberia Electricity Corporation (LEC) remains precarious, however. Operating losses increased from US$12 million in 2019 to US$15 million in 2023. However, this represented an improvement over 2022 when operating losses reached US$28 million. Adjusting for depreciation and amortization LEC’s EBITDA was still negative, at US$ 4.46 million in FY23, but better than in FY2018 when it was negative US$9.7 million. Among other challenges, LEC continues to have trouble recovering payments from public institutions. 29. Solar power solutions are gaining traction. The Government has maintained tariff exemption on off-grid solar renewable energy products since 2022 and developed a policy framework on mini-grid and technical regulation for solar energy products. By 2024, there were more than 20 local companies trading solar photovoltaic (PV) products in Liberia. However, the roll-out to health facilities has been slower than hoped. In 2024, there were 12 health facilities with solar PVs, with installation at two additional facilities underway, compared to a target of 50. 30. Efforts to control tax expenditures have made little progress. The total for 2021 was estimated at US$145.8 million up from US$94.1 million thus representing 30.1 percent of tax revenue compared to 23.9 percent of tax revenue for 2020.1 Of this US$51.7 million increase in tax expenditures in 2021, those for goods and services increased by US$24.4 million; import duty exemptions increased by US$20.3 million; and those related to business income taxes increased by US$7.0 million. However, the LRA has issued a disclaimer that the actual amount of tax expenditure is higher due to data limitations that failed to capture revenue waived from personal income tax and excise duties. On the other hand, considerable progress has been made in expanding the coverage of the data. At the time of the DPO program design, only data on waivers in international trade was available. The 2021 tax expenditure report was more comprehensive and included waivers on internal revenue. More recent data is not available. 31. SOE debt reporting has improved. The government began reporting borrowing for 15 SOEs in January 2021 through quarterly and annual Public Debt Management Reports available on the website of the Ministry of Finance and 1 Government of Liberia, Liberia Revenue Authority, Liberia Tax Expenditure Report, 2024. Page 14 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Development Planning. This includes the five most important SOEs and exceeds the target in the results framework.2 However, it is not clear how accurate the data is as the authorities have had trouble getting updated numbers from the SOEs. Non-guaranteed debt is now included. Beginning in March 2022 quarterly reports also included more details on individual SOE loans, notably the name of the creditor and the currency. However, most of the other information specified in the program document – such as maturities, interest rates and outstanding balances – was not covered. This is a significant shortcoming which reduces the transparency and accountability sought by the reform. Thus, although the number of SOEs reporting exceeded the target, the lack of key information means that the intended outcome was only partially achieved. The SOE unit in the Ministry of Finance had trouble eliciting the cooperation of SOEs. Consequently, in March 2022, the government revived the Bureau of State Enterprise which reports directly to the President. They have expanded their monitoring to cover 32 SOEs and are working on a consolidated report on SOE debt which was not yet available at the time of writing. The World Bank continues to support the government on general debt management. The Medium-Term Debt Strategy was updated in 2024 with more active leadership from the government side than in previous years. 32. Reporting on the financial performance of SOEs has been an even bigger challenge. The 2023 National Budget included an Annex summarizing the financial performance of individual SOEs. However, only 7 submitted budget estimates so the authorities had to use historical data and interviews with SOE managers to complete the picture. For the 2024 Budget, the situation improved, with only four of the 18 SOEs failing to submit their financial plans for the year, in violation of the amended Public Financial Management Act. On the other hand, there has been little progress in the adoption of International Financial Reporting Standards as called for in the prior action for DPO1. 3 The World Bank prepared a detailed report on SOE governance in Liberia in 2023 with a view to informing the road ahead.4 33. The rise in digital finance continued during the DPO program. Based on the 2021 Global Findex Report, 52 percent of Liberians aged 15 years and above had an account in a financial institution (29 percent) and/or a mobile money account (36 percent). This is up from 36 percent in 2017 and exceeds the 2023 target. Both men and women expanded their access to finance such that the gender gap did not show much change. However, the share of women who had a financial transactions account increased significantly from 28 percent in 2017 to 44 percent in 2021. The corresponding figures for men were 44 percent and 59 percent. So, the gender gap in 2017 was 16 percentage points, dropping to 15 in 2021.5 The share of women with a financial account was perhaps a better indicator than the gender gap, and its significant improvement suggests a rating of “partially achieved”. Based on the same data, 46 percent of Liberians aged 15 years and above made or received a digital payment, up from 28 percent in 2017. More recent data is not yet available, but it seems likely that the positive trend has continued. This progress can only be partially attributed to the reforms supported in this DPO series. The available data is for 2021, only one year after the first operation in the DPO series. Many other factors, notably developments in technology, are driving the move towards mobile banking. 34. The Liberia Household Social Registry is being used by four government programs under the Recovery of Economic Activity for Liberian Informal Sector Employment (REALISE) Project. These include: (i) Grant Support to Vulnerable Households to Revive or Start Small Businesses; (ii) Temporary Employment Support and Employability Development for Vulnerable Workers, iii) Community Livelihood and Agriculture Support, and (iv) Social Cash Transfer and Strengthening of the National Social Protection System. This registry had over 400,000 households registered with complete data by the end of 2024 representing almost 40 percent of the national population. Over 25,000 households received quarterly cash transfers over the period 2018-24 but payments only lasted for 18 months due to the limitations of donor funding and lack of government contributions. Thus, the number of households actually receiving cash transfer 2 These five account for over 80 percent of revenues generated by the SOE sector. 3 World Bank, Liberia: Improving Governance of State-Owned Enterprises and Reducing the Fiscal Risks, 2023. 4 Ibid. 5 The baseline of 35.5 percent used in the DPO results framework appears to be inaccurate. Page 15 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT payments in 2024 was roughly 4,000. It is not clear from the results framework whether the indicator refers to the accumulated total or the number at completion of the DPO series. However, typically such a cash transfer program should ensure regular payments for at least five years in order to lift households out of poverty. The inability of the government to supplement donor funding has restricted full implementation and raised questions about sustainability. The DPO program initially included a trigger to ensure a minimum level of government support, but this was dropped when it proved unfeasible. On the other hand, the social registry has made impressive progress, and it is arguable that this is a more accurate measure of the success of the DPO1 prior action. Taking into account both factors, this component of the social protection objective is judged to be partially achieved. 35. National Identification Registry (NIR) cards are not yet free. An Executive Order was issued by the President, calling for these cards to be issued to LHSR beneficiaries, including refugees, at no cost to the program and their beneficiaries. Unfortunately, this has not yet happened. The REALISE project has had to budget over US$114,000 to cover the cost of NIR cards for about 22,000 project beneficiaries over the last two years. There has been little progress in absorbing refugees. Only a few refugees whose former status ended on 30 June 2022 have acquired permanent residence and have appropriate documents permitting their legal stay in Liberia. 36. The final outcome is mixed. Important progress was achieved in energy reform, the promotion of digital finance, and the development of a social protection system, and to a lesser extent, SOE debt reporting. Implementation of agriculture and social protection were thwarted by fiscal constraints. Efforts to reduce tax expenditures were undermined by weak political commitment. C. OVERALL OUTCOME RATING AND JUSTIFICATION Rating: Moderately Satisfactory 37. The prior actions were relevant, but some of the results fell short of expectations. While the program did not fully achieve its targets, it did make substantial progress in several key areas. For instance, energy sector reforms led to a significant reduction in commercial losses, and digital financial services experienced a notable increase in account ownership. However, some reforms supported by the prior actions were not implemented due to fiscal constraints caused by the COVID-19 pandemic. These include the establishment of a seed certification mechanism and the removal of fees for NIR cards. As highlighted, the pandemic had a substantial impact on the program's implementation, resulting in delays and disruptions. The pandemic emerged globally one month after the DPO series was launched in February 2020 and thus was not foreseen. So, while this threatened the short-term viability of some reforms, it significantly increased the need for budget support. The second and third operations reflected this challenge, simplifying the policy matrix and adjusting the results framework while maintaining sufficient reforms to support the program. III. OTHER OUTCOMES AND IMPACTS A. POVERTY, GENDER AND SOCIAL IMPACTS 38. The reforms supported under the IGDPO series are expected to have moderate to high positive poverty, distributional and gender effects in the medium-to-long term. 39. Prior Action #1: The establishment of the regulatory framework for the seed market lays the foundation for seed- market development and is expected to: (i) increase access to improved inputs (seeds); (ii) increase the supply of these seeds by promoting private sector participation; and (iii) thereby increase yields and boost productivity in the agriculture sector. Given that most of the poor are active in agriculture, an increase in agricultural productivity will have a positive effect on income, availability of food and micronutrients, reduction in malnutrition and poverty reduction. Private sector participation in the seed market may, however, benefit disproportionately the well-off who have better financial, political, and social capital. These benefits have yet to materialize due to delays in implementing the reforms. Page 16 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT 40. Prior Action #2: The reduction in commercial losses and increased operational efficiency of LEC will allow for improved access and affordability of electricity. Not only will the lower tariffs have positive effects on disposable income of households, but better access may have positive effects on income growth by promoting MSME development. However, only 27 percent of Liberians have access to electricity and the impact on the very poor may be limited. The reduction in operating costs should allow LEC to reduce tariffs while remaining financially sustainable. A lifeline tariff of US$0.15/kWh for low consumption households, and an overall residential tariff at US$0.24, will make the tariff affordable to household consumers and enterprises (tailors, metalworkers, restaurants). 41. Prior Action #3: The implementation of the policy framework for mini-grids and duty waiver for quality-verified stand-alone solar systems will help make off-grid solutions affordable to remote rural populations. This will, in turn, increase access to electricity and spur MSME growth and job creation. The negative revenue implications for introducing a duty waiver range between US$0.1 million to US$0.4 million, depending on the market scenario being considered, while generating between 24,715 and 88,835 more connected households. This could be considered as a fiscal subsidy of about US$4.50 per new connected household. The positive impacts envisaged in the energy sector were likely realized due to the success of the reforms. 42. Prior Action #4: The establishment of a proper legal and institutional framework for rationalizing and managing tax expenditures will reduce rent-seeking, increase transparency, and reduce corruption. This action is expected to increase the fiscal space for public investment in physical and human capital as well as enhance the delivery of social services to the poor. Duty waivers will remain on high-yield and climate-resilient seeds, and quality verified solar products, benefiting farmers and rural dwellers. These objectives remain aspirational. 43. Prior Action #5: While this prior action has only an indirect impact on poverty, the improved oversight and transparency of SOEs can limit inefficient public spending and free up fiscal space for pro-poor spending. 44. Prior Action #6: The upgrading of the legal and regulatory framework for digital credit will further facilitate development of DFS, financial access and inclusion. This is expected to increase the percentage of adults with accounts at financial institutions and promote savings and access to credit, including by poor households. Increased financial access and inclusion is expected to reduce the gender gap in bank-account ownership, from 16 percentage points to 9 percentage points, thus supporting inclusion of women in access to financial services. This could help to promote more women-owned businesses, including household enterprises. Women’s access to financial services has in fact improved substantially. 45. Prior Action #7: Ensuring that all beneficiaries of social assistance and safety net programs enrolled in the LHSR have National ID cards at no cost will improve the effectiveness and efficiency of the programs. That said, the current cash-transfer program started out on a small scale and the number of extremely poor households served through regular cash transfers represents only a small fraction of the total eligible population (less than 10 percent). In addition, the program only covers four out of the 15 counties. Due to capacity gaps, the current cash transfers are often delivered with significant delays. To have meaningful impact on poverty reduction, there is a need to improve regularity of transfers and increase the coverage. Considerable progress was made in expanding cash transfers and targeting them to the poor. 46. The cash-transfer program explicitly focuses on female recipients. The robust system of identification of beneficiaries will improve targeting of cash transfers and ensure that vulnerable women benefit equally from the transfers and other social protection programs. The prior action will also ensure that refugees who wish to stay as permanent residents continue to have access to basic services and employment opportunities and to social assistance and welfare programs. B. ENVIRONMENTAL, FORESTS, AND NATURAL RESOURCE ASPECTS Page 17 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT 47. Most of the prior actions are not expected to have any negative impact on Liberia’s environment, forests, or other natural resources. Instead, many contribute to economic development that is conducive to ensuring effective environmental management. Those in the energy sector are likely to have a positive impact. Social protection reforms will help low-income households cope with climate change. Only the agriculture reforms present a mixed picture. 48. Energy Prior Actions should help reduce commercial losses at the LEC, which in turn is expected to improve the financial situation of LEC and increase its capacity to provide better services. By facilitating access to electricity, this has the potential to reduce reliance on charcoal and firewood which are the primary cooking fuels for Liberians, with expected positive effects through curtailing the rate of deforestation and lessening the negative health implications associated with wood fuel as a fuel source for cooking. 49. Other energy prior actions will promote the development of mini-grid solar systems with quality-verified solar products which will increase access to renewable, clean, affordable energy in remote rural areas which has the potential to reduce reliance on charcoal and firewood which are the primary cooking fuels for Liberians. This is also expected to have positive environmental effects through curtailing the rate of deforestation and lessening the negative health implications associated with wood fuel as a fuel source for cooking. 50. Social protection prior actions can help low-income households cope with climate change. Flooding causes damage to Liberia’s infrastructure, displaces an estimated 60,000 people per year, increases public health risks, and causes the loss of human lives. Extreme weather events are likely to increase with climate change and low-income households are especially vulnerable. 51. Agriculture Prior Actions are expected to enable farmers to adapt to climate change by improving access to high- quality agricultural inputs, especially climate-resilient seed varieties, which in turn could improve small-scale agricultural productivity. Increases in agricultural productivity resulting from improved seeds may in turn lead to less land used in agriculture, less deforestation, and a positive environmental impact. However, bringing the private sector into seed production and increasing farmers’ access to certified seeds could increase the use of agro-chemicals, including inorganic fertilizers and pesticides which could have negative impacts on the environment. The Government intends to implement integrated pest-management approaches using extension service providers who will educate and sensitize farmers on the safe use of agro-chemicals. Farmer-field schools have proved to be effective means of getting farmers to practice rational agronomical production methods, including safe use and management of agro-chemicals. Also, implementation of the Fertilizer Law (2019) will help protect the people, animals, plants, and the environment against the potential dangers associated with inappropriate use of inorganic fertilizers. C. INSTITUTIONAL CHANGE/STRENGTHENING 52. Government institutions supporting social protection have been strengthened. The introduction and utilization of the Household Social Registry significantly improves coordination and targeting of various programs, while reducing duplication. D. OTHER UNINTENDED OUTCOMES AND IMPACTS 53. None. IV. BANK PERFORMANCE Rating: Moderately Satisfactory 54. The initial program design was well supported by analytical work and technical assistance but was too complex. It covered seven different policy areas and sometimes addressed more than one issue within a given policy area – seed Page 18 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT production and tariff policy in the case of agriculture, commercial losses and solar power in the case of energy. All prior actions were underpinned by policy engagement notes or, in one case, IMF analysis, as well as other research. Most of these were supported by World Bank investment projects or technical assistance. The team was advised by OPCS to simplify the program in the decision meeting for the first DPO; however, they chose to continue with the original design. A major increase in the tariff on rice imports was included before a poverty and social impact assessment was done. The PSIA subsequently raised concerns about the impact on poverty and the government decided to take more time to prepare for the reform, so the measure was dropped from the program in DPO2. The results indicators and targets were generally appropriate. However, it was probably unrealistic to expect a 10-percentage point increase in the share of domestic rice in total consumption, which would also depend on factors beyond the DPO. Similarly, the target for increased accounts in financial institutions was too broad and not sufficiently tied to the supported reform. 55. Appropriate corrections were made for the second DPO. After further advice from OPCS, and the advent of the COVID pandemic, the program was simplified. The trade policy area was dropped, as were prior actions related to strategy development. The prior action focused on increasing the budget allocation for the social safety net was also dropped, in recognition of the tight fiscal situation. On the other hand, a new prior action was introduced related to refugee status. This was probably a good choice as it enabled the team to obtain additional financing of US$15 million from the IDA20 Window for Host Communities and Refugees. The results framework was also improved. The indicator for rice was changed to focus more narrowly on certified rice seed production, and the finance indicator was expanded to include mobile accounts, which were more likely to be stimulated by the prior actions. On the other hand, the energy sector indicator should not have been changed as commercial losses were a more appropriate measure than total transmission and distribution losses. 56. Collaboration with the Government was strong but technical support could have been strengthened. The operation was led by a macroeconomics team based in Liberia. The government team was actively involved in designing and monitoring the program and expressed general satisfaction with the relationship. The only concern was the level of financial support available for implementation of some of the reforms. While most prior actions were supported in some way by Bank investment projects or technical assistance, these projects were not always structured to provide the necessary financial support. For example, the agriculture projects did not have funding to operationalize the SCDA, and the social safety nets project could not provide sufficient logistical support to expand the national registry. In retrospect, both the Bank and the Government might have considered more carefully the financial implications of proposed prior actions before their adoption. Also, technical assistance could have been stronger in support of the reforms in SOE monitoring and reporting. 57. The World Bank team could have been more candid in program documents. The program document (PD) for DPO2 did not explain why the increase in rice tariffs was dropped as a trigger for DPO3. The DPO3 PD did not explain that fiscal constraints were impeding the creation of the SCDA. The team could have been more forthcoming in describing the extent to which SOE reforms supported under DPO1 were actually being implemented – statements of fiscal risk and adoption of IFRS standards for financial reports. The DPO3 PD document might have acknowledged the very partial nature of the expanded SOE debt information reported in fulfillment of the prior action. The reason for dropping the DPO3 trigger calling for an increase in the budget allocation for the social safety net was also missing. The DPO2 PD explained that various strategies were dropped, but attributed this to COVID delays or the need to streamline the program, when in fact these were no longer considered appropriate measures under Bank policy. V. RISK TO SUSTAINABILITY OF DEVELOPMENT OUTCOMES 58. The risks to sustainability of outcomes are substantial. First, progress on achieving outcomes was fairly limited. Much remains to be done to ensure successful implementation of the reforms initiated by this program in the context of modest financial and human resources. Second, the change in administration in 2023 has resulted in the replacement of Page 19 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT many senior staff across the ministries, leading to a loss of institutional memory and/or commitment to past initiatives. The path forward on seed certification is not clear. There is reason to believe that the momentum on reducing commercial losses in electricity supply can be sustained but other problems continue to undermine the financial viability of LEC. Vested interests have made it impossible to tackle tax expenditures. The Bureau of State Enterprise is committed to improved SOE monitoring and, in principle, enjoys the backing of the President's Office. However, their capacity may not be sufficient to cover all 46 active SOEs. Digital financial services are probably in the best shape, driven by effective technological developments. Cash transfers and refugee settlement should eventually expand with support from the World Bank and other donors. 59. Subsequent DPOs have addressed some of the shortcomings of this program. The Bank chose to launch a stand- alone DPO in 2023 prior to the elections in order to support a new set of reforms. None of the prior actions addressed the unfinished business of the previous series. However, in a new three-year program scheduled for Board presentation in December 2024, further reforms are supported in the areas of energy (governance of LEC), tax exemptions, and financial inclusion which build on measures taken in the IGDPO series. Further support through investment projects will be necessary in other areas such as seed certification, social safety nets, and SOE governance. VI. LESSONS AND NEXT PHASE A. LESSONS LEARNED 60. Alignment of Program Design with Fiscal Realities. The fiscal implications of reforms need to be carefully considered during program design, especially in low-capacity, resource-constrained environments like Liberia. The implementation of critical initiatives, such as the Seed Development and Certification Agency (SCDA) and the expansion of social safety nets, was hampered by insufficient fiscal resources. These reforms, while necessary, placed an unrealistic financial burden on the government, which was also engaged in an IMF-supported fiscal consolidation program. Future programs should focus on reforms that are cost-neutral or supported by guaranteed funding. When expensive reforms are unavoidable, their feasibility should be ensured by securing donor support or ring-fencing adequate resources beforehand. Nonetheless, Bank should also encourage the reallocation of spending based on allocative and technical efficiency and cut down on wasteful expenditures. Additionally, highlighting the need for a Medium-Term Fiscal Framework (MTFF) to plan and manage the fiscal policy and ensuring fiscal discipline and policy credibility will be useful tool to ensure that authorities allocate tight fiscal space to the critical areas. 61. Importance of Technical Assistance in Low-Capacity Environments. Technical assistance (TA), especially using existing or coming IPF, is critical for successful reform implementation in low-capacity settings. DPO series should go in tandem with IPF or integrate dedicated TA components for capacity-building in critical reform areas. Leveraging partnerships with other agencies should be accompanied by well-defined coordination mechanisms. 62. Need for Focused and Realistic Program Design. Programs with too many policy areas or objectives risk diluting focus and overburdening limited resources. The program’s initial design covered too many policy areas, sometimes addressing multiple issues within a single area. This complexity strained the government’s capacity and reduced the program’s effectiveness. Future operations should adopt a more focused approach by prioritizing fewer, high-impact reforms. For example, targeting one or two critical areas (e.g., agriculture and energy) would allow for more concentrated effort and resources. 63. Importance of Building Resilience to Political Transitions. Political transitions can disrupt reform momentum, especially in contexts with frequent turnover in senior government staff. Following the 2023 elections, the replacement of key personnel affected the continuity of initiatives such as the SCDA and the Household Social Registry. These changes delayed or reversed progress in key areas. Establishing and nurturing institutions can increase the probability of staying Page 20 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT on course despite the political challenges. For example, creating independent agencies or embedding reforms in legislation can reduce reliance on individual leadership continuity. 64. Sustainability Requires Long-Term Engagement. Reform sustainability demands continuous support beyond the program period, especially for systemic changes. Many of the reforms, such as the operationalization of the Household Social Registry, require sustained engagement and additional resources to fully institutionalize. Follow-up operations and investment projects should build on earlier reforms to ensure their consolidation. The new standalone DPO approved in 2023 was a missed opportunity. The sustainability of the outcomes of this series would have been improved if its shortcomings had been tackled in that DPO. This sustainability is especially vulnerable when there is a change in administration, and notably in the case of Liberia where there is so much turnover in senior staff. The new DPO series proposed for December 2024 provides important follow-up in some policy areas. B. NEXT PHASE 65. The World Bank continues to assist the government of Liberia through budget support, investment projects and advisory and analytical services. A stand-alone DPO was approved in 2023. While it focused on a new set of reforms, one of them aimed to improve revenue generation, helping to address the fiscal constraint which dogged the IGDPO. A new DPO series with the new government provides some continuity in the areas of energy, tax exemptions and financial inclusion. A second phase of the Electricity Sector Strengthening and Access project (P180498), and the Regional Emergency Solar Power Intervention project (P179267), both approved in 2024, continue support in the energy sector. The Rural Economic Transformation project (P181083) plans to work on seed certification, in collaboration with a new EU project. The new Governance Reform and Accountability Transformation project (P177478) provides further support on domestic resource mobilization and national identification cards. Page 21 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ANNEX 1. RESULTS FRAMEWORK @#&OPS~Doctype~OPS^dynamics@icrdpfresultframework#doctemplate A. RESULTS FRAMEWORK Indicators by Pillars Removing Distortions in Selected Sectors and Strengthening Public-Sector Transparency Baseline Closing Period (Current) Actual Achieved at Completion Indicator Name Value Month/Year Value Date Value Month/Year Quantity of certified rice seeds 0 Dec/2018 2,000 Dec/2023 0 Dec/2023 available to farmers (KG) (Number) Comments on achieving targets Not Achieved LEC overall transmission and 63 Dec/2018 55 Dec/2023 46 Dec/2023 distribution losses (percent) Comments on achieving targets Fully Achieved (Percentage) Health facilities provided with 0 Dec/2019 50 Dec/2023 12 Sep/2024 electricity service from stand-alone Comments on achieving targets Partially Achieved (24 percent) solar systems (Number) Share of tax expenditures in total 23.90 Dec/2020 20 Dec/2023 30.10 Dec/2021 domestic revenues (Percentage) Comments on achieving targets Not Achieved SOEs with debt information published 0 Dec/2019 8 Dec/2023 15 Dec/2023 in the Public Debt Management Comments on achieving targets Fully Achieved reports (Number) 35.70 Dec/2018 45 Dec/2023 52 Dec/2021 Page 22 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Adults with financial transaction Comments on achieving targets Fully Achieved accounts (Percentage) Promoting Economic and Social Inclusion Baseline Closing Period (Current) Actual Achieved at Completion Indicator Name Value Month/Year Value Date Value Month/Year Gender gap in financial transaction 16 Dec/2017 15 Dec/2021 15 Dec/2021 account ownership (Percentage) Comments on achieving targets Not Achieved Extreme poor households receiving 0 Dec/2018 20,000 Sep/2024 3,000 Sep/2024 regular cash transfers (Number) Comments on achieving targets Partially Achieved (15 percent) Refugees whose former status ended 0 Dec/2021 2,000 Dec/2023 Very few Sep/2024 on 30 June 2022 who have acquired Comments on achieving targets Partially Achieved permanent residence and have appropriate documents permitting their legal stay in Liberia (Number) Page 23 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Operation ID Name Role Mamadou Ndione Team Leader MacDonald Nyazvigo Financial Management Specialist Oyewole Oluyemi Afuye Procurement Specialist Shafick Hoossein Environmental Specialist Akhilesh Ranjan Social Specialist Nightingale Rukuba-Ngaiza Counsel Lemu Ella Makain Procurement Team David T Warlobah Team Member Pinar Baydar Team Member Zubair K.M. Sadeque Team Member Adetunji A. Oredipe Team Member P176993 Steisianasari Mileiva Team Member Joseph Massa Koilor Team Member Kiyotaka Tanaka Team Member Mack Capehart Mulbah Team Member Caroline Mary Verney Sergeant Team Member Ines Melissa Emma Attoua Etty Team Member Ky Hong Tran Team Member Gweh Gaye Tarwo Team Member Jade Elena Garza Ndiaye Team Member Caroline Nelima Wambugu Team Member Victoria Ewura Ekua Wood Team Member Ifeoma Clementina Ikenye Team Member Marina Bakanova Team Leader MacDonald Nyazvigo Financial Management Specialist P168218 Nightingale Rukuba-Ngaiza Counsel Sona Varma Peer Reviewer Page 24 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT John Litwack Peer Reviewer Lydie Ahodehou Team Member Zubair K.M. Sadeque Team Member Oleksii Balabushko Team Member Daniel Boakye Team Member Esther Rojas-Garcia Team Member Victoria Strokova Team Member Ayago Esmubancha Wambile Team Member Vaanii Baker Team Member Nicholas Timothy Smith Team Member Mack Capehart Mulbah Team Member Sekou Kamara Team Member Ines Melissa Emma Attoua Etty Team Member Mamadou Ndione Team Leader MacDonald Nyazvigo Financial Management Specialist Edward Felix Dwumfour Environmental Specialist Akhilesh Ranjan Social Specialist Nightingale Rukuba-Ngaiza Counsel Errol Graham Team Member Pinar Baydar Team Member Zubair K.M. Sadeque Team Member Irene Sitienei Team Member P175570 Smile Kwawukume Team Member Adetunji A. Oredipe Team Member Ky Hong Tran Team Member Joseph Massa Koilor Team Member Claudia Rocio Manrique Team Member Kiyotaka Tanaka Team Member Victoria Strokova Team Member Vaanii Baker Team Member Zoe Quoi Diggs Duncan Team Member Page 25 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Siegfried Zottel Team Member Hiroki Uematsu Team Member Joseph Quayson Team Member Mack Capehart Mulbah Team Member Minita Mary Varghese Team Member Gweh Gaye Tarwo Team Member @#&OPS~Doctype~OPS^dynamics@icrannexstafftime#doctemplate B. STAFF TIME & COST Operation ID : P175570 Staff Time & Cost Stage of Project Cycle No. of Staff Weeks US$ (including travel and consultant costs) Preparation FY21 48.955 0.27 FY22 0.000 0.00 Total 0.00 0.27 Supervision/ICR Total 0.00 0.00 Operation ID : P176993 Staff Time & Cost Stage of Project Cycle No. of Staff Weeks US$ (including travel and consultant costs) Preparation FY22 63.735 0.39 Page 26 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Total 0.00 0.39 Supervision/ICR FY23 1.975 0.00 FY25 7.080 0.03 Total 0.00 0.04 Operation ID : P168218 Staff Time & Cost Stage of Project Cycle No. of Staff Weeks US$ (including travel and consultant costs) Preparation FY19 16.987 0.13 FY20 50.739 0.28 Total 0.00 0.42 Supervision/ICR FY20 1.482 0.00 FY21 0.000 0.00 Total 0.00 0.00 Page 27 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ANNEX 3. BORROWER, CO-FINANCIERS, AND OTHER DEVELOPMENT PARTNERS’/STAKEHOLDERS’ COMMENTS Feedback-World Bank Implementation Complement and Results Report Department of Economic Management Ministry of Financial and Development Planning January 21, 2025 After a careful review of the ICR programmatic DPO series for 2020, 2021, and 2022, with concentration on implemented programs prior actions, and status of the result indicators, we can clearly say that some of the result indicators were fully achieved, partially achieved, and not achieved, as indicated on the Result Indicators Matrix. Referring to the Policy and Results Framework matrix, we are pleased to indicate that we in agreement with the Program design and outcomes under Pillar 1: removing distortions in selected sectors and strengthening public-sector transparency, and Pillar 2: promoting economic and social inclusion, as shown below: ASSESSMENT OF KEY PROGRAM DESIGN AND OUTCOMES Policy and Results Framework – Original and Revised Indicative Triggers (from DPF1) Indicative Triggers (from DPF1) and and Prior Actions for DPF1 Results Indicators (original Prior Actions for DPF2 Prior Actions for DPF3 (DPF1) and revised) PILLAR 1: Removing Distortions in Selected Sectors and Strengthening Public-Sector Transparency Prior Action 1: The Indicative Trigger 1: To Indicative Trigger 1: To Result Indicator 1: Number of Recipient has enacted the strengthen seeds regulatory strengthen implementation Licensed Private Firms in the Liberia Seed framework, the Recipient of national seeds regulatory Seed Sector Development and has: (i) approved regulations framework, the Recipient has Certification Agency Act to implement Liberia SDCA instituted and published on- to establish a Seed Act; (ii) revised National line the National Catalogue Results Indicator 2: Share of Development and Seeds Policy. for Plant Species and domestic rice production in Certification Agency Varieties. total rice consumption (%) (SDCA) to, inter alia, Indicative Trigger 2. The provide for sustainable Indicative Trigger 2. The Recipient has implemented a seeds delivery system and Recipient’s Cabinet approved Revised Indicator 1: Quantity gradual transition to the private sector National Rice Development of certified rice seeds available ECOWAS Common External participation in seeds Strategy for Liberia for 2020- to farmers (KG) Tariff (CET) on rice. production and 2023 marketing. Baseline (2018): 0 Prior Action 1: The Recipient has Prior Action 1: The Recipient, through its Ministry of Target (2023): 2,000 through its Ministry of Agriculture‘s National Seed Agriculture‘s National Seed Board (NSB): (a) issued a Board, has approved the Resolution on National Liberia Seed Development and Catalogue of Crop Varieties Certification Regulations, dated Released and Registered in April 15, 2021, to inter alia Liberia dated April 6, 2022; and promote private sector Page 28 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT participation in seed (b) published on-line, the production and marketing; as National Catalogue for Plant indicated in the Board Minutes Species and Varieties dated dated April 13, 2021. 2022 in accordance with the ECOWAS Regulation on Harmonization of the Rules governing quality control, in the ECOWAS. Prior Action 2: The Indicative Trigger 3: To Indicative Trigger 3: The Result Indicator 3: LEC Recipient has, through its reduce energy costs and Recipient has approved mini- commercial losses (%) Liberia Electricity accelerate access to grid regulations that, inter alia, Corporation (LEC), electricity, the Recipient has open opportunities for private approved the LEC approved a National investment in mini-grids and Revised Indicator 2a: LEC Business Plan (2019- Electrification Strategy, which help reduce energy cost. overall transmission and 2023) which addresses includes both grid and off- distribution losses (percent) key operational grid technology options. Baseline (2018): 63 challenges to reduce Prior Action 2: The Recipient has Indicative Trigger 4. The commercial losses in the through the LERC, approved the Target (2023): 55 Recipient approved a energy sector. publication of the new tariff “lifeline” tariff policy, rates for end users to further allowing for a progressive address affordability barriers for tariff regime, addressing poorer population and affordability barriers for Result Indicator 4. Energy disincentivize power theft, as poorer population. tariffs for poor HH (c/kwh) evidenced by the Order dated December 10, 2021. Prior Action 2: The Recipient, Revised Indicator 2b: Health through the LERC, has pursuant facilities provided with Prior Action 3: The Recipient has to its letter dated September electricity service from stand- granted duty waiver for Quality- 21, 2020, provided Provisional alone solar systems (number) verified Solar Products to Approval of the Liberia facilitate private investment in Electricity Corporation (LEC)’s solar mini-grid to make off-grid “Life-Line Tariff” to address Baseline (2019): 0 solutions affordable to remote affordability barriers for poorer rural population, as evidenced Target (2023): 50 population and disincentivizes by Executive Order No. 107 power theft, and LEC has dated April 27, 2022. commenced implementation of said tariff as evidenced by its announcement on its website effective May 1, 2021. Prior Action 3: The Indicative Trigger 5: The Indicative Trigger 4: The Result Indicator 5. Cost to Recipient has enacted a Recipient’ Cabinet has: (i) Recipient further reduces export: Border Compliance Modernized Customs approved implementing NTBs in line with the (US$) Code which provides for, regulations for the new recommendations of the inter alia, greater Customs Code; (ii) completed assessment. transparency and assessment of non-tariff accountability of customs barriers (NTBs) to trade and decisions and procedures eliminated the most Prior Action : None distortionary. Page 29 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT and facilitation of Result Indicator 6. Cost to international trade. import: Border Compliance Prior Action : None (US$) Revised Indicator: None Prior Action 4: The Indicative Trigger # 6: The Indicative Trigger 5: Tax Result Indicator 3. Share of Recipient has, through its Recipient has streamlined and expenditures report is prepared tax expenditures in total Ministry of Finance and consolidated all duty and tax and published in line with the domestic revenues (%) Development Planning waivers in the Revenue Code amended Revenue Code. (MFDP): (a) established and submitted the amended an intergovernmental Revenue Code to the Technical Tax Expenditure legislature. Prior Action 4: The Recipient Baseline (2018): 32.6 Committee; and (b) through its MFDP, has in suspended the issuance accordance with the Amended Target (2023): 20 of Investment Incentive Prior Action 3: The Recipient Revenue Code streamlined and Certificates pending through its MFDP, has consolidated duty and tax permanent streamlining submitted to the Recipient’s waivers by limiting the sectors until June 2020, all for the parliament for approval, a draft and business activities qualifying purpose of reducing rent- amendment to the Revenue for incentives; as evidenced by seeking behavior, Code of Liberia, to inter alia Administrative Regulation No. strengthening streamline and consolidate 02.16-1/MFDP/27 October 2021. transparency, and duty and tax waivers, as creating fiscal space. evidenced by the letter from the Deputy Chief Clerk of Parliament dated May 4, 2021, acknowledging receipt of said draft Amendment. Prior Action 5: The Indicative Trigger # 7. To Indicative Trigger 6. To Result Indicator 8. Published Recipient has enacted strengthen the oversight of strengthen debt transparency, Statement of Fiscal Risks the Amendment and and reduce fiscal risks from the Recipient: (i) established a from SOEs (Y/N) Restatement of the SOEs, the Recipient’s MFDP: comprehensive database of Public Financial (i) submitted the SFR to the public debt, incl. debt of SOEs Management Act of legislature alongside with the and public-private partnership; Result Indicator 9. Published 2009 to, inter alia, National Budget FY2021; (ii) and (ii) published quarterly debt audited SOE reports provide for the: (a) expanded the coverage of reports on its website. (number) submission of annual SOEs reporting to its SOE statement of fiscal risk monitoring department. from State-owned Prior Action 5: The Recipient Revised Indicator 4. SOEs with Enterprises (SOEs) through its MFDP has: (a) debt information published in along with the budget Indicative Trigger 8. To instructed all SOEs to submit, on the Public Debt Management proposal for following strengthen debt management a quarterly basis, data on all reports (number) year; and (b) and transparency the Recipient debt (guaranteed and non- publication of SOEs has: (i) published Medium-term guaranteed, direct and on-lent) financial statements Debt Management Strategy; to the SOE, Financial Reporting Baseline (2019): 0 based on International and (ii) expanded the coverage and Coordination Unit and the Target (2023): 8 Financial Reporting of debt recording by including DMU at MFDP, as evidenced by Standards (IFRS), for Circular dated May 12, 2022; the purpose of and (b) published the validated Page 30 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT strengthening information on SOEs liabilities, and verified said debt transparency and debt, guarantees. information in its quarterly improving oversight of Public Debt Management SOEs. Report. Prior Action 4: The Recipient, through its MFDP, has issued a letter dated May 3, 2021, to the Debt Management Unit instructing it to include the liabilities, debt and, guarantees of at least five critical SOEs into the quarterly Public Debt Management Report; and the Debt Management Unit has incorporated and published said information its initial quarterly report dated March 2021 (as revised on May 3, 2021. PILLAR 2 Promoting economic and social inclusion Prior Action 6: The Indicative Trigger 9: The CBL Indicative Trigger 7: The CBL has Result Indicator 10: Recipient has, through its has: (i) approved revised the established and made Percent of adults with Central Bank of Liberia, consumer protection operational a digital credit accounts at financial issued Regulations regulations with provisions on registry with adequate staff and institutions (%) Concerning Licensing and digital credit; and (ii) submitted resources. Operations of Electronic to the legislature a revised Payment (e-payment) Payment Systems Act. Revised Result Indicator Services to, inter alia, 5a: Adults with financial promote financial transaction accounts Prior Action 6: The Recipient has inclusion and safe and Prior Action 5: The Recipient, (percentage) through the CBL Board, efficient delivery of through its Central Bank, has authorized the use of digital quality payment services. submitted to the Recipient’s credit to promote access to DFS; parliament for approval, a draft Baseline (2018): 35.7 as evidenced by Resolution No. amendment to the Payment BR-05-/2022 dated March 17, Target (2023): 45 Systems Act, 2014 to inter alia 2022. promote access to digital financial services, as evidenced by the letter from the Deputy Chief Clerk of Parliament dated Result Indicator 11. Gender May 4, 2021, acknowledging gap in account ownership receipt of said draft (percentage points) Amendment. Revised Result Indicator 5b. Gender gap in financial transaction account ownership (percentage points) Baseline (2018): 35.5 Page 31 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Target (year): 25.0 Prior action 7. The Indicative Trigger 10. The Indicative Trigger 8. To sustain Result Indicator 6: Number of Recipient has, through its Recipient has: (i) approved new SSN system and expand its extreme poor households Cabinet, issued the medium-term National Social scope nationwide, the Recipient receiving regular cash Cabinet Resolution Protection Strategy; and (ii) approves a transition plan that transfers, total and by gender Concerning National established a monitoring and includes adequate financing of HH: (i) female HH; (ii) male- Household Social Registry information system to collect from the National Budget for HH (number) (NHSR) which endorses data on the provision of social 2023. the setting up of the protection services. NHSR as the principal Revised Result Indicator 6a: mechanism for identifying Prior Action 7: The Recipient has Extreme poor households and targeting Prior Action 6: The Recipient authorized: (a) all beneficiaries receiving regular cash transfers beneficiaries of various through its Ministry of Gender, of social assistance and safety (number) social protection Children and Social Protection net programs enrolled in the programs national-wide. (MoGCSP) has operationalized LHSR, including eligible refugees, an IMIS to implement and to receive at no cost national ID Baseline (2018): 0 coordinate the social programs cards and (b) refugees whose Target (2023): 20,000 of participating institutions, as refugee status is about to end evidenced by its issuance of a and who wish to stay as UAT and the MIS generation of permanent residents in Liberia MIS Deployment Notes. after June 30, 2022 following the entry of the UNHCR Refugee New Result Indicator 6b: Cessation Requirements to: (i) Refugees whose former enable their continuing access to status ended on 30 June basic services; and (ii) early 2022 who have acquired regularization of their long-term permanent residence and status as permanent resident, have appropriate as evidenced by Executive Order documents permitting their No 108 dated April 27, 2022 legal stay in Liberia (number) Baseline (2021): 0 Target (2023): 2,000 Status of Results Indicators Indicator Baseline, Targets and Actual Level of achievement Quantity of certified rice seeds available to Baseline (2018): 0 Not achieved farmers (KG) Target (2023): 2,000 Current status (2023): 0 LEC overall transmission and distribution losses Baseline (2018): 63 Fully achieved (percent) Target (2023): 55 Current status (2023): 46# Page 32 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT Health facilities provided with electricity service Baseline (2019): 0 Partially achieved from stand-alone solar systems (number) Target (2023): 50 (24 percent) Current status (2024): 12 Share of tax expenditures in total domestic Baseline (2018): 32.6 Not achieved revenues (%) Revised baseline (2019): 22.9* Target (2023): 20 Current status (2021): 30.1* SOEs with debt information published in the Baseline (2019): 0 Fully achieved Public Debt Management reports (number) Target (2023): 8 Current status (2023): 15** Adults with financial transaction accounts Baseline (2018): 35.7*** Fully achieved (percentage) Target (2023): 45 Current status (2021): 52*** Gender gap in financial transaction account Baseline (2018): 35.5 Not achieved ownership (percentage points) Revised baseline (2017): 16*** Target (2023): 25.0 Current status (2021): 15*** Extreme poor households receiving regular cash Baseline (2018): 0 Partially achieved (20 percent) transfers (number) Target (2023): 20,000 Current status (2024): 3,000 Refugees whose former status ended on 30 June Baseline (2021): 0 Partially achieved 2022 who have acquired permanent residence Target (2023): 2,000 and have appropriate documents permitting their legal stay in Liberia (number) Current status (2024): very few The Liberia Refugee Repatriation and Resettlement Commission (LRRRC), been a specific concern referenced in your email, and also one of the prior actions partially achieve, I am pleased to again share with your feedback from the LRRRC on the status of refugees in Liberia. The LRRRC said, quote, I would like to inform you of the Liberia Refugee Repatriation and Resettlement Commission's (LRRRC) concerns about the implementation of these activities. Regarding the Executive Order 108, which was issued by the former President, Amb. George M. Weah, aimed to support refugees in obtaining civil documentation at no cost. Unfortunately, the expiration of this Executive Order in 2022, hindered the ability of the commission to have reached many refugees to benefit from such critical services. Page 33 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT In response to this situation, the National Identification Registry (NIR), and the Liberia Immigration Services (LIS). the new leadership of the commission has initiated discussions with relevant government ministries to reactivate and grant refugees their rights, as outlined in the 1951 Convention Relating to the Status of Refugees and its 1967 Protocol. In December 2024, we organized a series of meetings with key stakeholders, including the Ministry of Foreign Affairs (MoFA), Following these discussions, the commission has formally requested a new Executive Order from the office of the President, Amb. His Excellency Joseph Nyuma Boakai. The commission has also begun processing draft Memoranda of Understandings (MOUs) to facilitate the inclusion of refugees in the National Identification Registry and to develop the UN Conventional Travel Document for refugees, which services are payable in the absence of the Executive order. However, the commission is optimistic that these efforts will yield positive results before the end of the first quarter of 2025. Additionally, the commission has developed several programs aimed at enhancing the livelihoods of refugees in Ban, PTP, Nimba, Grand Gedeh, and Maryland Counties, as well as returnees, and asylum seekers within Liberia. However, to effectively implement these livelihood projects and ensure that both Person of Concern (PoC) and host communities benefit, we urgently require adequate financial support in the process. Therefore, we solicit your assistance in securing funding through the World Bank Programmatic Series of Credits and Grants office to support these initiatives. Said contribution will play a vital role in improving the lives of refugees, returnees, and asylum seekers, and fostering their integration into society, Unquote. We also wish to acknowledge the Liberian Government receiving technical and financial support in the tune of 135 million United States Dollars from the world Bank towards reforms for the period under review (FY 2020, FY 2021, & FY 2022). As stated, please consider the above as the official feedback/comments towards the World Bank Implementation Complement and Results Report, taking into consideration implemented programs prior actions and status of result indicators, technical and financial support from the Bank, clarity and concerns raised by the LRRRC. Page 34 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ANNEX 4. SECTORS AND THEMES @#&OPS~Doctype~OPS^dynamics@icrdpfsectortheme#doctemplate SECTORS AND THEMES Operation ID : P175570 Sectors Adaptation Mitigation Major Sector Sector % Co-benefits Co-benefits (%) (%) FY17 - Energy and FY17 - Other Energy and Extractives 17 0 0 Extractives FY17 - Industry, Trade FY17 - Agricultural markets, 17 100 0 and Services commercialization and agri-business FY17 - Public FY17 - Central Government (Central 50 0 0 Administration Agencies) FY17 - Social Protection FY17 - Social Protection 16 25 0 Themes Major Theme Theme (Level 2) Theme (Level 3) % FY17 - Economic Policy FY17 - Fiscal Policy FY17 - Tax policy 17 FY17 - Climate change FY17 - Adaptation 21 FY17 - Environment and FY17 - Access to Energy 17 Natural Resource FY17 - Energy FY17 - Energy Efficiency 17 Management FY17 - Energy Policies & 17 Reform FY17 - Financial Infrastructure and FY17 - Payment & FY17 - Finance 17 Access markets infrastructure FY17 - Pandemic FY17 - Disease Control 67 FY17 - Human Response Development and FY17 - Gender 33 Gender FY17 - Nutrition and Food Security FY17 - Food Security 33 FY17 - Private Sector FY17 - Jobs FY17 - Job Creation 17 Development Page 35 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT FY17 - Data Development and FY17 - Data production, 17 Capacity Building accessibility and use FY17 - State-owned FY17 - Public Administration Enterprise Reform and 17 Privatization FY17 - Public Sector FY17 - Debt 17 Management Management FY17 - Domestic 17 FY17 - Public Finance Management Revenue Administration FY17 - Public Expenditure 17 Management FY17 - Social FY17 - Social protection 17 Development and FY17 - Social Protection delivery systems Protection FY17 - Social Safety Nets 17 FY17 - Urban and Rural FY17 - Rural Development FY17 - Rural Markets 17 Development Operation ID : P176993 Sectors Adaptation Mitigation Major Sector Sector % Co-benefits Co-benefits (%) (%) FY17 - Energy and FY17 - Other Energy and Extractives 14 0 0 Extractives FY17 - Renewable Energy Solar 15 0 100 FY17 - Financial Sector FY17 - Banking Institutions 14 0 0 FY17 - Industry, Trade FY17 - Agricultural markets, 14 50 0 and Services commercialization and agri-business FY17 - Public FY17 - Central Government (Central 29 5 5 Administration Agencies) FY17 - Social Protection FY17 - Social Protection 14 0 0 Themes Major Theme Theme (Level 2) Theme (Level 3) % FY17 - Economic Policy FY17 - Fiscal Policy FY17 - Tax policy 14 FY17 - Environment and FY17 - Adaptation 9 Natural Resource FY17 - Climate change Management FY17 - Mitigation 16 Page 36 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT FY17 - Energy Policies & FY17 - Energy 29 Reform FY17 - Financial Infrastructure and FY17 - Financial FY17 - Finance 14 Access inclusion FY17 - Human FY17 - Pandemic FY17 - Disease Control 29 Development and Response Gender FY17 - Gender 14 FY17 - Private Sector FY17 - Public Private Partnerships 14 Development FY17 - State-owned FY17 - Public Administration Enterprise Reform and 14 FY17 - Public Sector Privatization Management FY17 - Debt FY17 - Public Finance Management 14 Management FY17 - Social Development and FY17 - Social Protection FY17 - Social Safety Nets 14 Protection FY17 - Rural FY17 - Urban and Rural Infrastructure and 14 FY17 - Rural Development service delivery Development FY17 - Rural Markets 14 Operation ID : P168218 Sectors Adaptation Mitigation Major Sector Sector % Co-benefits Co-benefits (%) (%) FY17 - Energy and FY17 - Other Energy and Extractives 14 10 50 Extractives FY17 - Financial Sector FY17 - Banking Institutions 14 0 0 FY17 - Industry, Trade FY17 - Agricultural markets, 29 50 0 and Services commercialization and agri-business FY17 - Public FY17 - Other Public Administration 29 0 0 Administration FY17 - Social Protection FY17 - Social Protection 14 25 0 Themes Major Theme Theme (Level 2) Theme (Level 3) % FY17 - Economic Policy FY17 - Fiscal Policy FY17 - Tax policy 14 Page 37 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT FY17 - Adaptation 19 FY17 - Environment and FY17 - Climate change Natural Resource FY17 - Mitigation 7 Management FY17 - Energy Policies & FY17 - Energy 14 Reform FY17 - Financial Infrastructure and FY17 - Financial FY17 - Finance 14 Access inclusion FY17 - Private Sector FY17 - Jobs 14 Development FY17 - State-owned FY17 - Public Sector FY17 - Public Administration Enterprise Reform and 14 Management Privatization FY17 - Social Development and FY17 - Social Protection FY17 - Social Safety Nets 14 Protection FY17 - Flood and FY17 - Urban and Rural FY17 - Disaster Risk Management Drought Risk 29 Development Management Page 38 The World Bank Liberia Third Inclusive Growth Development Policy Operation (P176993) ICR DOCUMENT ANNEX 4. SUPPORTING DOCUMENTS Government of Liberia, Ministry of Finance and Development Planning, Public Debt Management Report, April-June 2024. https://www.mfdp.gov.lr/index.php/main-menu-reports/mm-em/mm-em-db/quarterly-debt-and-management- report Government of Liberia, Liberia Revenue Authority, Liberia Tax Expenditure Report, April 2024. https://revenue.lra.gov.lr/wp-content/uploads/2024/05/Tax-Expenditure-Report-April-2024.pdf World Bank, Global Findex Database 2021. https://www.worldbank.org/en/publication/globalfindex/Data World Bank, Liberia Economic Update, June 2024. World Bank, Liberia: Improving Governance of State-Owned Enterprises and Reducing the Fiscal Risks, 2023. Page 39