MONROVIA – Liberia’s economic growth continues to face challenges, despite the ongoing efforts by the government and international organizations to foster development. A recent report by the World Bank reveals some troubling insights, noting that Liberia has yet to meet its economic targets, with only 64,572 direct beneficiaries of its development programs, half of them women, against a projected 96,000. The report, written by a team led by Mamadou Ndione and supported by various experts, underlines a series of strategic reforms aimed at transforming Liberia’s future, but also exposes the deep-rooted issues hindering the country’s progress.
The report paints a picture of a country in a transitional phase, where ambitious policy reforms have been outlined to increase economic efficiency, improve public investment, and break free from a history of resource dependency. The team behind the report emphasized key reforms necessary to improve Liberia’s education, public health, and infrastructure, all of which are critical to improving the quality of life for Liberians.
One of the report’s major points is the goal to increase the average duration of schooling in Liberia from four to 10 years, as well as efforts to raise the country’s education quality score from 0.53 to 0.65. Additionally, the report highlights the importance of improving public health, particularly by raising stunting and adult survival rates to match those of similarly situated nations.
However, the road to these ambitious goals is not clear-cut. The World Bank projects that with higher investment, both public and private, Liberia could see one percentage point added to its annual GDP growth rate, under a high-ambition reform scenario. This path is compared to Vietnam’s successful reform process in the 1980s and 1990s, which transformed the country’s economy. In this optimistic scenario, Liberia could even reach lower middle-income status by 2040 and achieve a per capita GDP of US$2,000 by 2050. However, these targets hinge on successful policy implementation and sustained political will.
The report also warns that the structure of growth must be more inclusive to benefit Liberia’s poorest. It stresses that while economic growth is important, it will not significantly reduce poverty unless the benefits are equitably distributed. Key measures outlined include improving access to basic services like education and healthcare, and enhancing agricultural productivity to lift many out of poverty.
The country’s vulnerability to external shocks, including the effects of global climate change, remains a major concern. The World Bank team highlighted the need for robust policies to improve resilience, particularly in the agricultural sector, which is central to Liberia’s economy. The country’s historical reliance on natural resources, particularly rubber, timber, and iron ore, has made its economy highly susceptible to fluctuations in global commodity prices. Moving forward, Liberia needs to diversify its economy to reduce dependency on these volatile sectors.
Fiscal sustainability also remains a crucial challenge for the country. The World Bank suggests that Liberia must raise public investment from the current 10 percent of GDP to 12 percent by improving revenue mobilization, especially from the mining industry. These efforts must be complemented by improved expenditure management and a comprehensive overhaul of public spending. The report also underlines the importance of institutional reforms to modernize Liberia’s public sector, combat corruption, and create a more attractive environment for private investment.
Liberia’s economic future also depends on substantial changes in the business climate. A modernized and more efficient regulatory framework could encourage private capital to flow into new sectors, reducing the country’s over-reliance on resource extraction. The World Bank’s report suggests that by creating an attractive business climate and implementing stronger policies for foreign direct investment (FDI), Liberia can stimulate economic activity beyond its mining sector. These reforms could increase private investment from the current 12 percent of GDP to 18 percent, comparable to Vietnam’s trajectory.
The report further emphasizes Liberia’s need to prioritize value addition within agricultural value chains, particularly in palm oil, cocoa, rubber, cassava, and rice. By focusing on these sectors, Liberia can move up the technological ladder and achieve more sustainable long-term growth. The country’s relatively isolated geographical position within West Africa, coupled with its poor infrastructure, means that improving connectivity and trade facilitation is critical to fostering economic growth and expanding market access.
In line with these objectives, the World Bank outlines a comprehensive reform agenda, focusing on increasing the efficiency and scale of public investments, especially in infrastructure such as roads, energy, and telecommunications. Liberia’s infrastructure gap remains one of the largest barriers to economic development, and addressing it is essential to ensure that growth is both inclusive and sustainable.
Despite these substantial challenges, the World Bank team remains optimistic about Liberia’s potential for growth if the right reforms are implemented. Key policy recommendations include enhancing macroeconomic stability, modernizing the public sector, improving the business climate, and fostering economic diversification. Although the path to recovery and sustained growth is fraught with obstacles, the World Bank’s report presents a roadmap for Liberia to achieve significant economic progress.
Liberia’s post-civil war recovery has been a story of resilience, with growth rates showing promise in recent years. Between 2021 and 2023, the country saw modest but steady growth, despite external shocks like the Ukraine conflict and the COVID-19 pandemic. However, as the World Bank’s report highlights, long-term progress hinges on the successful implementation of structural reforms and the development of a diversified economy.
Looking ahead, Liberia faces a critical crossroads. The country’s economic trajectory will largely depend on the government’s ability to modernize its institutions, combat corruption, and foster an environment conducive to investment. The World Bank’s report calls for a coordinated approach to reform, suggesting that Liberia’s success will depend on the concerted efforts of the government, the private sector, and international partners.
For Liberia, the next decade will be pivotal. While the country has made important strides since the end of its civil war, challenges remain in building a sustainable, diversified economy that can provide opportunities for all of its citizens.
The World Bank’s recommendations, if implemented effectively, could provide the foundation for a new era of growth and prosperity in Liberia. However, the success of these efforts will ultimately depend on Liberia’s political leadership, institutional capacity, and the resilience of its people.
