Building capacity to help Africa trade better

Liberia

Resources

Liberia

Registration to the tralac website is required to download resources documents.

Liberia

Key Facts

  • Capital: Monrovia
  • Region: West Africa
  • Official language: English
  • Independence Day: July 26, 1847
  • Area: 111,000 sq km
  • Population (2018): 4.8 million
  • REC membership: CEN-SAD, ECOWAS
  • WTO membership: July 14, 2016
  • GDP (2018): US$ 3.264 billion
  • GNI per capita (2018): US$ 610
  • Currency: Liberian Dollar

Economic overview

The Liberian economy has faced uncertainty in the past two years due to declining mining exports and rising inflation and currency depreciation. Real GDP growth, after declining to 0.4% in 2019, is expected to recover to 1.6% in 2020, underpinned by mining, forestry, and agriculture.

Commercial gold exports, commercial palm oil production, and cocoa and fisheries investment have expanded. Macroeconomic stability is expected to improve in 2020 with the implementation of an IMF-supported program improving fiscal and monetary policies and tackling structural rigidities to create a favorable environment for private investment.

Liberia is recovering from the Ebola crisis between 2014 and 2016, which plunged the economy into a recession, with real GDP contracting by 1.6% in 2016 due to capital flight and a fall in private investment. Real GDP growth recovered to 2.5% in 2017, largely driven by mining (gold and iron ore), forestry, and agriculture as economic activity resumed. But foreign exchange inflows shrank in 2018, triggering a depreciation of the Liberia dollar by about 26% and a sharp rise in inflation to 23.5% in 2018. Inflation remained high at 21.7% in 2019.

Liberia, traditionally, has relied on forestry (rubber and timber) and mining (gold, diamonds, and iron ore) as major sources of income. The mining sector alone employs more than 100,000 people and has the potential to generate income and help reduce unemployment, estimated at 25%. Agriculture employs an estimated 70% of the population, mainly youth and women.

With considerable arable land, Liberia has the potential for crop diversification, improved market linkages, and private sector-led agriculture value chains. This could underpin job creation, create new income opportunities, and reduce food imports. The government is addressing infrastructure deficits in transport and energy and trying to create a favorable business environment. A new development plan, the Pro-Poor Agenda for Prosperity and Development 2018-23, has prioritized infrastructure development and job creation.

Liberia’s medium-term agenda focuses on regional integration, private investment and trade in the Mano River Union countries (Côte D’Ivoire, Guinea, Liberia, and Sierra Leone). Liberia is modernizing agriculture to increase productivity and reduce imports of staple foods – mainly rice. A new act regulates the establishment, development, and operations of special economic zones. The government has taken measures to restrict external borrowing to concessional loans from its traditional partners and has committed to stop domestic borrowing to avoid crowding out private investment.

Liberia’s population is estimated at 4.8 million, 71.0% under age 35 and nearly half under age 15. But low education and technical skills keep Liberia from realizing a demographic dividend and increasing savings. The human and institutional capacity is inadequate to transform natural resources into wealth. Transport and energy deficits undermine private investment in mining, manufacturing, services, and agroprocessing. The over-reliance on imports, including staple foods, is unsustainable, and diversifying into high-value exports is essential. The economy’s low private sector investment and narrow tax base limit fiscal revenues, increasing reliance on high-cost external loans – amid reduced aid and an accommodative monetary policy. Liberia’s public debt is moderate at about 37.9% of GDP, with external debt at an estimated 33.5% of GDP.

Last updated: April 2020

Contact

Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010