Overview

Political and Security Update

Liberia’s National Elections Commission (NEC) has validated 22 political parties to participate in the October 2017 Presidential and Legislative elections, and more than 20 others have applied and awaiting qualification by the NEC. Calls have been made for political mergers to reduce the number of parties.

Contestants would be vying to replace President Ellen Johnson Sirleaf who will be completing her second and final term of office, and 73 seats in the House of Representatives. The ruling Unity Party (UP) endorsed Vice President Joseph Boakai.

The long-running political crisis in the House of Representatives has been resolved with the election of a new speaker, Emmanuel Nuquay. Mr. Nuquay was elected on Wednesday, October 5, 2016 after the Supreme Court of Liberia denied the issuance of a writ of prohibition on members of the House of Representatives to prevent them from electing a new speaker. Former Speaker Alex Tyler petitioned the Supreme Court, challenging his removal by a resolution signed by two-thirds majority members.  

On June 30, 2016, the United Nations Mission in Liberia (UNMIL) on June 30, 2016 handed over security responsibilities to the Government of Liberia. Currently there are 1,240 military personnel and 606 police personnel of UNMIL remaining in the country. The UN Security Council has extended the mandate of UNMIL through the end of 2016. Many Liberians are concerned about the prospect of the Mission’s withdrawal and potential lack of UN support during the 2017 elections. A two-week UN Strategic Assessment Mission found that there is no credible imminent external threat to Liberia’s security.

Economic Overview

The continued low global commodity prices and post-Ebola decline in official inflows have created significant challenges for Liberian economy. Gross domestic product (GDP) growth in 2015 was flat, compared to 0.7% in 2014, arising mainly from the continued decline in activity in the iron ore and rubber sectors, which have been the main drivers of economic growth in recent years. There was a reduction in inflationary pressures in 2015, due to declining domestic food and petroleum prices during the second half of the year; the average inflation rate decreased from 9.9%in 2014 to 7.7% in 2015. The current account deficit widened from 32.5 to 33.6% of GDP over the same period, reflecting weaker exports receipts and the Ebola-related surge in imports.

In 2016, economic growth is expected to rise to 2.5%, mainly due to a rebound in services and the start of gold production, while inflation is expected remain in the single digit range. Liberia is currently struggling to implement its post-Ebola economic recovery plans, given the multiple challenges the country has to grapple with simultaneously, in FY2016/2017, including the need to continue with infrastructural development, taking responsibility for national security following the UNMIL drawdown and the financing of the upcoming general elections.

Over the medium term, economic growth is expected to increase to 5.0% on average, due to a recovery in mining, improvements in infrastructure, particularly energy and roads, and higher agricultural productivity. The fiscal position should also improve thanks to the authorities’ commitment to improving domestic revenue mobilization and contain spending. Resolution of the backlog of non-performing loans and improving bank profitability could support economic growth through increased credit, especially for small- and medium-size enterprises (SMEs).

Last Updated: Oct 25, 2016

World Bank Group (WBG) Engagement

The Liberia Country Partnership Strategy (CPS) FY13-FY17 has been supporting the government’s Agenda for Transformation (AfT) to contribute to sustained growth, poverty reduction and shared prosperity, while exiting fragility and building resilience. Key pillars are: (i) Economic Transformation; (ii) Human Development; and (iii) Governances and Public Sector Institutions. In December 2014, the CPS program was refocused to support Government’s post-Ebola Economic Stabilization and Recovery Plan. As the CPS comes to an end, the Bank has launched the preparation of the new Systematic Country Diagnostic/Country Partnership Framework to replace the existing CPS. 

The WBG Portfolio in Liberia

The World Bank portfolio in Liberia comprises of 16 active projects with a net commitment of $474.82 million. The main focus of the portfolio is on investing in infrastructure, especially roads, bridges and energy, along with development of the human and institutional capacity necessary to deliver results in these sectors. In addition, the WBG continues working with the government to diversify agriculture, improve service delivery in education, health and social protection and strengthen public financial management and governance mechanisms.

Enormous post-Ebola challenges remain in the health sector for Liberia to ensure recovery, and strengthen both essential health services and pandemic preparedness. To accelerate the recovery and rebuilding of the health sector, the Ministry of Health developed its “Investment Plan for Building a Resilient Health System in Liberia,” and Reproductive, Maternal, Neonatal, Child, and Adolescent Health (RMNCAH) Investment Case. These plans prioritize health workforce program; upgrading of health infrastructure; epidemic preparedness and response, and quality health services delivery. The World Bank is supporting the country as a largest donor on these priority components in close coordination and collaboration with other development partners.

To ensure strategic interventions in stabilizing the economy and spurring rapid economic and social recovery, the government developed the Economic Stabilization and Recovery Plan (ESRP). In support of the government’s ESRP, the WBG committed to refocus the existing investment program outlined in the CPS and additional health, water and sanitation, and social cash transfer projects were added to support the ESRP program.

Last Updated: Oct 25, 2016

International Finance Corporation (IFC) in Liberia

IFC investments and advisory services in Liberia will be targeted to achieve private sector development. As at July 2015, IFC investment comprises of: (i) $37.3 million financing in four Liberia banks under Ebola Emergency Liquidity Facility (EELF) and Global Trade facility; (ii) $8.6 million in agriculture financing in the rubber and cocoa sectors; (iii) $24 million in the mining sector; (iv) and $13 million (out of $18.5 million) seed investment in West Africa Venture Fund (WAVF) for private equity investment to small and medium enterprises (SMEs). In January 2015, the WBG Board approved a $25 million Rubber Renovation Program (RRP) to support small and medium Liberian rubber growers with long term financing to replant and improve existing operations.  

The priority sectors for new IFC investments during the CPS period will be agribusiness, energy & infrastructure, financial services and mining. The priority sectors present viable and sustainable investment opportunities that are consistent with Pillar II of the Liberian government’s AfT and development partners’ focus on sustainable employment creation. Extensive reform activities of the past six years have made the priority sectors more investment ready. IFC’s on-the-ground presence since June 2007 has enabled it to scale up activities with discussions ongoing on a number of potential investments in agribusiness, power and financial services.

Last Updated: Oct 25, 2016

Donor Coordination

The CPS was developed and is being implemented in close coordination with development partners such as the African Development Bank (ADB), the European Union (EU), and the United States Agency for International Development (USAID) and the Swedish International Development Cooperation Agency (Sida). Other donor partners are USAID/MCC, China, Germany, Japan, Sweden, Norway, the United Kingdom, Ireland and the United Nations.

The WBG has been a major proponent of aid coordination through the LRTF, as well as the donor groups in public financial management, public sector reform, agriculture, social protection, energy and health. The LRTF is a multi-donor trust fund for infrastructure, which is supported by contributions from the European Union, and the governments of Great Britain (DfID), Sweden (Sida), Ireland (Irish Aid), Norway and Germany (KfW) and the World Bank. The LRTF is administered by the World Bank and supervised by an Oversight Committee comprising Government of Liberia, contributing donors, and the World Bank.

Last Updated: Oct 25, 2016


LENDING

Liberia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments