Liberia, one of the world's poorest nations, faces significant challenges including high poverty rates, low human development, and inadequate sanitation. Economic growth in Liberia has been repeatedly disrupted by various shocks such as civil unrest and health crises like the Ebola epidemic and COVID-19. Since 2003, real GDP per capita has shown little progress.
To move towards sustainable and inclusive growth, Liberia needs to undergo five major transformations. These include increasing domestic savings, reducing reliance on the mining sector, aligning economic activities with urban labor demands, recognizing the private sector's role in economic expansion, and implementing comprehensive policy reforms to modernize the public sector.
The government elected in October 2023 is tasked with implementing structural reforms over the next five years that will shape Liberia's long-term economic future. Without changes, Liberia is unlikely to reach middle-income status by 2030. However, credible reforms could improve productivity and public investment efficiency significantly.
Under an ambitious reform scenario, Liberia might achieve lower middle-income status before 2040. The effectiveness of government policies will be crucial in determining whether long-term growth reduces poverty and increases prosperity for all citizens. Establishing macro-economic stability and fiscal sustainability is vital for laying a foundation for long-term growth.
Improving the business climate to attract private capital beyond mining is essential. Leveraging Liberia's advantages in agro-processing and pursuing open trade can support sustained growth. Key recommendations include enhancing macroeconomic stability, implementing deeper policy reforms, and improving the business environment.
"Establishing a solid foundation for long-term growth requires ensuring macro-economic stability and fiscal sustainability."
"The newly elected government in October 2023 has a crucial role in implementing structural reforms."