Overview

  • Political and Security Update

    The newly-elected administration of President George M. Weah registered its first year in office in January 2019 without major security challenges posed to the new government. The UN Mission in Liberia (UNMIL) completed its withdrawal from Liberia in April 2018, underscoring the need for strengthening the national security architecture to combat any threat to Liberia’s nascent peace and stability. The resource constraints continue to remain a challenge in building Liberia’s national security system.

    Following completion of his first year into office, Liberians have been assessing President Weah’s electoral campaign promises of fighting corruption and reducing poverty. Delivering his State of the Nation Address, coinciding with the first anniversary of the ruling Congress for Democratic Change (CDC) Government, the President expressed optimism on the growth of the economy despite adverse circumstances. In the face of these optimistic recovery forecasts, the President said projected growth rates are still below the pre-Ebola period, when the economy grew on average by 7.5% annually.

    During the latter part of its first year in office, the new administration finalized and launched an ambitious Pro-Poor Agenda for Prosperity and Development (PAPD). This development agenda is guided by four pillars: (i) to empower Liberians with the tools to gain control of their lives thru more equitable provision of opportunities in education, health, youth development, and social protection; (ii) a stable macroeconomic environment enabling private sector-led economic growth, greater competitiveness, and diversification of the economy; (iii) a more peaceful, unified society that enables economic transformation and sustainable development and; (iv) an inclusive and accountable public sector for shared prosperity and sustainable development.

    The President has reiterated his government’s commitment to developing the country with emphasis on the construction of paved roads and other critical infrastructures in Liberia. He emphasized that his paved roads agenda is intended not only to connect the capital, Monrovia, but also the rest of the country so that road connectivity reinforces the country’s enormous socioeconomic development. 

    Economic Overview

    Liberia’s economy expanded by an estimated 1.2% in 2018, a significant slowdown from a growth rate of 2.5% in 2017. The modest growth was supported by expansion in the mining sector (24.2% year-over-year), in particular iron ore and gold production, bolstered by the opening of a new mining site by Arcelor Mittal and increased investment in the gold sector. However, the non-mining sector, which accounts for about 90% of gross domestic product (GDP), contracted by 1.3%. Rubber production, a key cash crop, grew by zero%.

    Headline inflation reached an all-time high of 28.5% by end December 2018, fueled by significant depreciation of the Liberian dollar against the US dollar (20.3% y-o-y) and monetary expansion. The rise in the cost of living due to inflationary pressures and limited employment opportunities continue to undermine the welfare of Liberians.

    The current account deficit remained high (23.3% of GDP in 2018) as improvements in the trade balance were offset by the decline in donor transfer. The trade deficit narrowed to 17.7% of GDP in 2018 from 20.2% of GDP in 2017. This is largely due to a steady decline in imports following the complete UN Mission in Liberia draw down, while exports stabilized. Donor transfers however, declined by five percentage points to 15% of GDP in 2018, increasing the pressure on foreign reserves.

    The fiscal deficit widened from 4.8% of GDP in FY2017 to 5.5% of GDP in FY2018 due to a significant shortfall in revenues and higher-than-anticipated non-discretionary expenditures. The shortfall in revenues (20% of the approved budget) reflected slower-than-anticipated economic activities, tax waiver policies in the run up to the presidential elections, unresolved court disputes with respect to the collection of petroleum levy, and lower-than-projected donor grants.

    GDP’s growth is projected to slow to 0.4% in 2019 and remain at about 1.5% over the medium term (2020-2021), well below the rate of population growth of 2.6%. The mining sector is projected to expand at a slower pace, due to lack of new investments and a moderate improvement in the terms of trade. Agriculture performance is projected to improve modestly as the returns on earlier investments in agricultural commercial crops (especially, in new rubber and palm oil trees) begin to bear fruit –although the difficult agribusiness environment is expected to constrain productivity.

    A successful fiscal adjustment will require: (i) increased revenue collection, including revenues from natural resources and agricultural concessions; (ii) systemic improvements in expenditure efficiency, including the efficient management of the wage bill and external aid; (iii) a prudent debt policy and management. Finally, absence of progress on key structural reforms- including improvements in the domestic revenue mobilization, business climate reforms, and efficiency in public sector investment – could undermine medium term growth and economic diversification.

    Last Updated: Apr 09, 2019

  • World Bank Group (WBG) Engagement

    The World Bank Group has approved a new Country Partnership Framework (CPF) for Liberia, which will guide the partnership between the Bank and Liberia over the period FY19-FY24. The CPF focuses on human development and intangible capital, while keeping the balance with investments in infrastructure to consolidate successes of the previous Country Partnership Strategy (CPS) and reinforce the impact of the WBG program aimed at building human capital and boosting private sector development.

    Specifically, the CPF places emphasis on strengthening institutions and creating an enabling environment for inclusive and sustainable growth through transparency and accountability in the public sector, support for commercial agriculture, and the development of micro, small and medium enterprises. The CPF will support infrastructure investments to foster more equitable nationwide development to improve access to basic services and will remain closely aligned with Liberia’s PAPD.

    The WBG Portfolio in Liberia

    As of March 2019, the World Bank portfolio in Liberia is worth close to a $1 billion across 19 active projects. The main financing sources are national and regional IDA with a commitment of $777.5 million across 14 projects. Sector trust funds play a key financing role with $224.5 million in financing directly to the IDA projects as co-financing, and 5 stand-alone trust funded projects.

    The 19 active projects finance the areas of: infrastructure (roads & electricity), human capital (youth development, education, health systems & social protection), governance (public sector & land administration), urban growth (waste management & water supply), and natural resource management (agriculture, forestry & fisheries). Future projects are envisioned in the following areas: education, public financial management, urban growth, maternal health & child health, and the digital economy.

    The Liberia Reconstruction Trust Fund (LRTF) is the primary trust fund that co-finances the IDA program. Since its inception, the LRTF has raised $218.3 million in cumulative contributions from the World Bank (seed funding) and Germany (KfW), Great Britain (DFID), the European Union (EU), Swedish International Development Cooperation Agency (Sida), Ireland (Irish Aid), and Norway. The LRTF has contributed towards improving Liberia's devastated infrastructure thereby promoting economic growth and facilitating the government's efforts to ensure service delivery to the population at large. The fund also promotes capacity development, both within Government and the private sector.

    International Finance Corporation (IFC) in Liberia

    IFC investments and advisory services in Liberia will be targeted to achieve private sector development. As of June 2018, IFC investment in Liberia comprises of: (i) $18 million financing in four Liberia banks credit lines and Global Trade facility; (ii) $7 million in agriculture financing in the rubber and cocoa sectors; (iii) $9 million (out of $18.5 million) seed investment in West Africa Venture Fund (WAVF) for private equity investment to small and medium enterprises (SMEs). 

    Agriculture and financial services are two priority sectors for IFC Liberia. These sectors present viable and sustainable investment and employment opportunities. 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. IFC recently signed a funding agreement of US$6m with Sida to carry out advisory service in investment climate improvement, support development of agri-value chain, financial innovation and gender program. The programs will be implemented from 2019 to 2022. 

    Last Updated: Apr 09, 2019

  • Results achieved during the implementation of Liberia’s Country Partnership Strategy (CPS) spanning FY13-FY17 were validated by the WBG Independent Evaluation Group (IEG) Completion and Learning Review for the Period FY13-17.

    Total new International Development Association (IDA) commitments reached $508 million comprised of 13 Investment Project Financing (IPF) including one regional operation, three additional financing, four Development Policy Financing (DPF) and two Supplemental Financing. Infrastructure accounted for 43% of the new commitments in line with the CPS focus, followed by Ebola Virus Response (EVD) crisis response (36%).

    During the CPS period, new trust fund (TF) commitments reached $178 million, or the equivalent of 33 operations, of which 24 were under $5 million. Most of the new TF commitments complemented infrastructure operations, and supported post EVD crisis initiatives. The International Finance Corporation made a total net commitment of $50 million for its core operation of long-term loans and equity investments, mainly in the financial and oil, gas and mining sectors.

    In the energy sector, 42,000 connections were done in urban areas, while 79,000 persons in rural areas were connected to the national grid and benefitted from solar lanterns. Electricity tariff reduced from 0.54 to 0.39 USD/kwh. For roads, 11% of rural population received access to all-season roads and 33.7% of roads in good and fair condition. The 247 km Monrovia-Ganta-Guinea Border road completion reduced travel time on this corridor from five hours to the hours. Thirty-five percent of Monrovia city streets were rehabilitated to good and fair condition. Access to internet services grew from 1.5 to 30.8 subscribers per 100 people. In agriculture, 4,189 hectares of smallholder tree crops farms rehabilitated, 1,109 hectares replanted, and 530 hectares planted. A total of 119 cocoa farmers organizations trained.

    In education, 8,596 children attended primary schools in 30 improved facilities, and 483,565 students, 47% of whom were girls from grades 1-9, benefitted from Global Partnership for Education (GPE) school grant, learning materials and supplementary readers. After capacity development, 2,579 schools became single signatories to their own bank accounts. Under the Bank’s Ebola response, 93% of health workers were trained with knowledge of Ebola and Infection, Prevention and Control (IPC). A total of 28 medical students completed the Medical Residency Program. The Ebola Recovery Livelihood Support trained 2,000 adolescent girls in life and business skills, while 100% of beneficiary households for the Ebola Emergency Response Project received cash transfers. 

    For a complete summary of results and achievements under the FY13-17 CPS, please see the Completion and Learning Review.

    Last Updated: Apr 09, 2019

  • Donor Coordination

    The WBG develops and implements its projects and programs 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). Other donor partners are the Millennium Challenge Corporation (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 Consultative Partnership Group (CPG), Liberia Reconstruction Trust Fund (LRTF), as well as the donor groups in public financial management, public sector reform, agriculture, social protection, energy, education and health. The WBG became a co-chair of the CPG that plays an important role in coordinating activities of all the development partners in Liberia for greater impact. 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), Ireland (Irish Aid), 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: Apr 09, 2019

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LENDING

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

*Amounts include IBRD and IDA commitments


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Additional Resources

Country Office Contacts

Main Office Contact
German Embassy Compound
Tubman Boulevard, Oldest Congo Town
Monrovia, Liberia
+231-88-6-531-407
For general information and inquiries
Michael Nyumah Sahr
Communications Associate
+231-88-6-606-967
msahr@worldbank.org
For project-related issues and complaints
liberiaalert@worldbank.org