Sources_Sought_TA_for_EG_07_13_18.pdf

USAID/Liberia

Sources Sought No. 2018-01

Note: This is sources sought notice. This is not a request for proposals, proposal abstracts, or quotations. It is a survey to identify potential sources.

A. Introduction and Background

Liberia is experiencing rapid depreciation of its currency and significant uptake in inflation, which have raised concerns about rising cost of living and macroeconomic instability. Since the beginning of 2018, the Liberian dollar has rapidly depreciated against the U.S. Dollar; a situation which has fueled inflationary pressures in the economy. From January 2018-June 2018, the

Liberian dollar has depreciated against the U.S. dollar by about 20% and the rate of inflation has accelerated from single digits late last year to now, June 2018, about 21% (year-to-year). The depreciation of the local currency is attributed to a combination of factors prominent amongst which are: fall in the global prices of the country’s key export commodities; the UNMIL drawdown; donor fatigue coupled with the uncertainty that surrounded the 2017 elections and the ensuing political transition. The Government of Liberia (GoL) has responded to this rapid macroeconomic deterioration by using various, albeit limited, fiscal and monetary instruments, including U.S. dollar auctions, paying less than 100% of U.S. dollar remittance transfers in U.S.

dollars and enforcing rules to minimize participation of unauthorized agents in foreign exchange markets. These GoL measures, however, have yielded no significant improvement in Liberia’s macroeconomic situation. While the roots of the crisis are largely imbedded in the structure of the economy and macroeconomic fundamentals, there is growing pressure from civil society and the political class for a response to reduce the high social costs and rising uncertainty in the market. Since Liberia does not have an International Monetary Fund (IMF) program, the GoL is seeking immediate support from USAID to provide technical assistance to examine the challenges and offer options on how to stabilize the exchange rate and contain inflation.

Specifically, the Ministry of Finance and Development Planning (MFDP) has requested support from USAID to conduct an Assessment of the Liberian Economy - issues and challenges impacting the exchange rate in the Liberian Market/Economy with possible recommended solutions (short-term, medium term and long term).

B. Services Sought

To respond to the GoL’s request, USAID is trying to determine the availability of regional, technical experts who may be available to undertake the following tasks:

1. Provide a rapid assessment of the current state of the Liberian macro economy;

2. Examine the factors driving exchange rate depreciation over the last 6-12 months;

3. Consult with the private sector and policy makers about policy options for addressing the challenges;

4. Provide key recommendations to the GoL about possible options for intervening based on the analysis of the problem, consultations and a review of experience from other similar situations;

5. Policy options on stabilizing the exchange rate should be identified in terms of immediate, short term, medium term;

6. Produce a report and present their findings and recommendations of the analysis and other related activities

While the consultant is expected to draw on his/her significant experience in the area of foreign exchange interventions and macroeconomic data analysis, USAID expects that the following questions will be among those considered in carrying out the analysis and engagement with GoL institutions and the private sector:

Currently there is a perception within the GoL that merchants are withholding foreign exchange from the banking system, which is contributing to the depreciation. The consultant should examine the extent to which this perception is supported by evidence and, if so, why.

Over the last several months, the Central Bank of Liberia (CBL) has been conducting

U.S. dollar auctions to increase the supply of U.S. dollars in the economy. Examine how this auction works, its limitations and avenues for strengthening it.

The GoL is using a number of tools to respond to the depreciation and is exploring others, such as foreign exchange surrender and repatriation of export earnings. The consultant should examine the pros and cons of these interventions and provide information on their performance in other similar contexts.

Liberia has significant budget deficits and rising external debt servicing requirements. To the extent that the exchange rate affects these, the consultant is expected to draw some implications for several exchange rate scenarios for the fiscal deficit and debt servicing requirements over the near term.

C. Illustrative Deliverables and Due Dates

Expected Dates

Desk Review and Analysis of Liberia’s recent macroeconomic data conducted

July 31, 2018

Desk review and Analysis of options for responding to foreign exchange crisis over the near and medium term conducted

July 31, 2018

Consultations conducted with the private sector (i.e., banks, merchants and importers) and institutions of the GOL (i.e., MFDP, CBL and Liberian Revenue Authority (LRA))

August 1-15, 2018

Draft Report on Findings and Recommendations August 16-20, 2018

Draft Report Presentation August 21-31, 2018

Final Report and Presentation September 10, 2018

USAID estimates that the total level of effort should be no more than a total of 32 days.

D. Expected Period of Performance and Place of Performance

USAID anticipates that the deliverables will be completed not later than September 10, 2018.

The technical expert(s) should expect to be physically present in Liberia for purposes of consulting with the GOL, the private sector and other stakeholders.

E. Requirements

USAID expects this effort to be undertaken by a senior consultant or team of consultants with significant experience in providing technical assistance (TA) to governments in developing countries to address macroeconomic crises, especially those involving foreign exchange. Each consultant is required to possess a minimum of 10 years of experience in providing such TA and at least a Master’s degree in economics, finance or related fields (PhD in economics is preferred). Consultants resident in Sub-Saharan Africa and familiar with macroeconomic conditions and challenges in import-dependent West African countries with limited foreign exchange reserves are particularly preferred. In the event that the consultant or team of consultants is recruited from outside of Liberia, we require said consultant or team to work with a Liberian who is knowledgeable of the Liberian economy. The Liberian should be recruited at the expense of the consultant.

F: Submission Guidelines

Interested organizations or consultants should submit to USAID the following information:

a brief description (not more than 5 pages) of their organization or technical history including their capability and experience as they relate to the described above and provide the following:

Curriculum vita(CV) of proposed consultant(s) and a brief description of their relevant experience providing similar services; CVs should not exceed 3 pages.

A brief summary of the consultant’s estimated level of effort and deliverables for providing the services described above.

All information requested above must be submitted electronically by 5:00 PM GMT on July 19, 2018 via email to:

Ms. Mary Chao Mwadine, A&A Email: mmwadine@usaid.gov

Questions must be submitted in writing to the same address provided above. USAID will not entertain phone calls regarding this sources sought.

mailto:mmwadine@usaid.gov