Liberia continues to enjoy a stable and democratic government since the conflict ended in 2003. Since then, it has organized two presidential and legislative elections, including a Special Senatorial Election held in December 2014. President Ellen Johnson Sirleaf is now completing the second and final six-year term which ends in 2017. Presidential and Legislative elections are to take place in October 2017 and the newly elected government will be inaugurated in January 2018.
While multinational peacekeeping force is still deployed in Liberia, the United Nations has lifted the suspension placed on the drawdown of peacekeepers from Liberia. The Security Council, in resolutions 2190 (2014) and 2215 (2015) set June 30, 2016 as the deadline for the Liberian Government to fully assume its complete security responsibilities from the UN Mission in Liberia (UNMIL).
Until mid-2014, Liberia was on stable path in implementing its ambitious medium-term development strategy, the Agenda for Transformation. However, the deadly Ebola Virus Disease, which was first reported in March 2014, lasted close to 16 months and resulted in a death toll of about 4000 persons. The outbreak also began destroying the fabric of Liberia’s economic and service delivery system.
The Ebola crisis has eroded some of the important gains that Liberia has made in reducing poverty and vulnerability. The Liberian economy has been hit hard by the Ebola epidemic and the related health crisis. Real gross domestic product (GDP) growth which was estimated at 8.7% in 2013 and projected at 6% for 2014 before the crisis was estimated to be less than 1%. Rubber production and exports, which had already slowed reflecting lower international prices, were also affected by the quarantines and curfews implemented because of the Ebola crisis. Growth in manufacturing continued to be constrained by inadequate electricity and the generally weak business environment. The epidemic resulted in disruption of production processes across several sectors. Household incomes have suffered from the substantial loss of wage jobs and self-employment. In addition, the fear associated with the outbreak has considerably slowed down economic activities; large concession companies have suspended their investment plans and relocated a number of their expatriate staff to other countries.
Liberia’s GDP growth forecast of 2-3% for 2015, is attributable mainly to resumption of activities in the agriculture, construction and general services sectors. The traditional drivers of economic growth in the economy, namely iron ore and rubber are projected to decline in terms of contribution to GDP, because of falling commodity prices and low output. Agriculture sector registered negative contribution to GDP, despite modest increase rice production during the year 2015. Services sector is the key driver of economic recovery in 2015, particularly construction (both road and residential), retail and distribution services.
The Ebola outbreak is however expected to have a substantial impact on Liberia’s economy over the medium term. Expenditures directly related to the crisis and additional social protection expenditure policy will result in pushing up the fiscal deficit to 10% of GDP in FY15 and subsequently projected to ease down to 5.4 % in FY16. On the other hand, the slow-down in production as well as delays in investments in key concessions in mining and agriculture caused by the Ebola outbreak will lead to lower exports and increased trade deficit in the medium term. An effective implementation of Liberia’s Post-Ebola Economic Recovery Plan is critical to mitigating the twin effects of the EVD and the declining global commodity prices, on the economy in the medium term.
Last Updated: Sep 30, 2015