TITLE:
Strengthening Public Financial and Debt Management Systems in Liberia: Challenges, Reforms, and the Way Forward
AUTHORS:
Vafolay Mbandoe Tulay
KEYWORDS:
Public Financial Management, Domestic Revenue Mobilization, Debt Management, Budget Credibility, Public Investment Management, Fiscal Governance, Extended Credit Facility, Fragile and Post-Conflict States, Liberia
JOURNAL NAME:
Open Journal of Business and Management,
Vol.14 No.4,
July
3,
2026
ABSTRACT: Public financial management (PFM) and debt management systems are central to the development trajectory of any state. In the case of Liberia, these systems carry an even greater weight because the country is rebuilding institutions in the aftermath of nearly two decades of intermittent civil conflict (1989-2003). Following the Heavily Indebted Poor Countries (HIPC) debt relief of 2010, Liberia rebuilt its fiscal architecture but encountered renewed vulnerabilities, including fiscal slippages during 2022-2023, the accumulation of external arrears, and a sharp decline in international reserves. The purpose of this article was to examine the structural and institutional drivers of these vulnerabilities and to assess the reform agenda pursued under the 40-month Extended Credit Facility (ECF) arrangement approved by the International Monetary Fund (IMF) in September 2024. The analysis draws on IMF Article IV consultations, IMF Country Reports 24/309, 25/044, 25/290, and 25/291, Public Investment Management Assessment (PIMA) findings, World Bank Public Expenditure and Financial Accountability (PEFA) assessments, Ministry of Finance and Development Planning (MFDP) budget documents, and the analyses produced by the Center for Transparency and Accountability in Liberia (CENTAL). Six interlocking weaknesses were identified: limited domestic revenue mobilization, weak budget credibility, fragmented public investment management, inadequate debt management capacity, opaque expenditure controls, and fragile institutional accountability. Findings suggest that Liberia has made measurable early progress under the ECF, including a substantial improvement in the primary fiscal balance and an early decline in the debt-to-GDP ratio. However, the findings also suggest that durable reform will require more than technical fixes. The recommendations presented are organized around the Government of Liberia, the National Legislature, development partners, and civil society. The article concludes that PFM reform in Liberia is fundamentally a governance question and, by extension, a question of how state institutions serve the interests of citizens as their primary stakeholders.