Liberia issues austerity measures after $360m US aid cut

The Liberian government has issued a series of austerity measures following the Trump administration's cancellation of over $360 million in foreign aid.

The measures focus on rationalizing expenditures, including cuts to domestic and international travel, gasoline coupons and mobile phone credits for government officials. It will focus only on critical expenditure, says Finance Minister Augustine K. Ngafuan.

According to him, the measures are aimed at addressing the impact of the United States' decision to cancel foreign direct support through the United States Agency for International Development or USAID.

"In nominal terms, we have been told that projects that have been canceled upward through this USAID aid cut is $360 million," the Liberian finance minister told China Daily in an interview.

The impact of the aid cut, he said, will affect critical programs such as those in health, agriculture, governance, media support, civil society organizations and efforts to digitize the country's revenue collection system. Aid from the US has traditionally made up a considerable portion of Liberia's national budget.

Minister Ngafuan also highlighted the government's plan to mitigate the impact by improving domestic resource mobilization, particularly through the implementation of a rigorous real property tax initiative. The aim is to reduce Liberia's dependence on foreign aid over time.

"We are gradually weaning ourselves off aid, but this will not happen overnight," he added.