Overview

  • Political and Security Update

    After nearly eight months into office, President George M. Weah has for the first time addressed the 73rd Session of the UN General Assembly in New York after the UN Mission in Liberia (UNMIL) closed its peacekeeping operations in Liberia after 15 years of operations. Since Liberia assumed security responsibilities in 2017, there has been no major security problems. The country’s security forces successfully provided security for the 2017 Presidential and Legislative Elections. President Weah commended the UN for its support for Liberia.

    He told the world body of his ambitious economic manifesto, the Pro-Poor Agenda for Prosperity and Development, which he said gives priority to the alleviation of poverty with focus on reducing the marginalization of the most vulnerable, creating a conducive atmosphere for middle and upper income Liberians to grow and prosper, and contribute to the country’s development.

    The president promised to build a harmonious society, based on the goal of economic empowerment, especially for the underprivileged. The Pro-Poor Agenda is designed to give power to the people, promote economic diversification, protect sustainable peace and encourage good governance. The President appealed to Liberia’s friends, bilateral partners, and private investors to support this agenda.

    The Liberian government says it is investing in Technical Vocational Education and Training programs to build entrepreneurial and marketable skill-sets of the country’s youthful population. Considering the importance and impact of infrastructure on social and economic development, the Liberian Government has identified investment in roads, energy and ports, as priority, and is therefore soliciting funding and other technical expertise to undertake projects in these sectors in pursuit of its goal to connect Liberia’s cities and towns, and power the economy. Investments in agriculture and value-addition activities are expected to provide jobs and income opportunities across the country.

    Economic Overview

    Liberia’s economy is still struggling to recover fully from the effects of multiple shocks in recent years; namely, Ebola Virus Disease (EVD) outbreak, collapse of commodity prices, UNMIL withdrawal and the perception of risk associated with the political transition in January 2018. Real gross domestic product (GDP) growth in 2017, is estimated to have recovered to 2.5% and is projected to rise to 3.0%  in 2018. The incipient recovery is driven largely by increased production of gold and iron ore, following the uptick in the prices of gold and iron ore on the international market. Non-mining sector GDP growth remains very low. Agricultural sector growth remains subdued due to weak recovery in global prices of rubber and palm oil. Headline inflation continued to rise during the year, reaching an all-time high of 24%  in June 2018 from 10.8% the same period last year. This is largely due to a sharp drop in foreign exchange supply (30%- following the drop in the exports and donor inflows), in the face of relatively rigid demand for U.S. dollars and rising global oil prices. The inflationary impact of Liberian Dollars (LD) depreciation is magnified in the context of highly dollarized Liberian economy.

    The resultant rise in the cost of living and limited employment opportunities continue to undermine the welfare of Liberians. According to the 2016 Household Income and Expenditure Survey (HIES), more than half of the population (50.9%) is living in poverty. Poverty is more than two times higher in rural areas (71.6%) than in urban areas (31.5%) and is overall lower in Monrovia than in the rest of the country. Transfers and remittances have a low impact on poverty in Liberia: for the poorest and most vulnerable households, transfers are neither widely prevalent nor high enough value to address the needs of the poor.

    The fiscal deficit widened to 5.2% of GDP in FY2018 compared to 4.8% of GDP in FY17, due to a significant short-fall in revenues and higher than anticipated non-discretionary expenditures. The shortfall in revenues (20% of the approved budget) is due to the slower than anticipated economic activities due to prolonged period of political uncertainty, tax waiver policies in the run up to the presidential elections, unresolved court dispute with respect to the collection of petroleum levy and lower than projected donor grants. Public sector wage bill as a percent of GDP overshot its target by one percentage point to 9.9% of GDP. Overall, the core non-discretionary expenditures such as the wage bill and interest payments constituted about 75% of domestic revenues.

    The medium term economic outlook is optimistic despite substantial downside risks. These include a further slump in commodity prices, incomplete structural and institutional reforms, and risky borrowing. The new Administration is expected to mitigate these risks by embarking on policy reforms that will promote economic diversification, improve the investment climate, promote domestic revenue mobilization and to ensure prudent borrowing strategy.

    Last Updated: Oct 12, 2018

  • World Bank Group (WBG) Engagement

    The World Bank Group in Liberia has commenced and advanced the process leading to the formulation of its new Country Partnership Framework (CPF), which will guide the partnership between the Bank and Liberia over the period FY19-FY24. The CPF will replace the Liberia Country Partnership Strategy (CPS) FY13-FY17 that has been supporting the government’s Agenda for Transformation (AfT). The government’s medium-term development strategy, Pro-Poor Agenda for Prosperity and Development (PAPD) will come coming into force by the end of 2018.

    The CPF is designed around three pillars and eight objectives to reinforce the impact of WBG interventions in support of the government’s strategic priorities and in line with the Systematic Country Diagnostic recommendations. The CPF pillars are: (i) strengthening institutions and creating an enabling environment for inclusive and sustainable growth; (ii) building human capital to seize new economic opportunities; and (iii) narrowing the infrastructure gap to foster more equitable nationwide development.

    The WBG Portfolio in Liberia

    The World Bank portfolio in Liberia comprises of 14 active International Development Association (IDA) projects with a net commitment of $710.51 million, including three regional IDA projects. The 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 the economy by building foundations for development of agriculture, improved service delivery in education, health and social protection, and strengthened public financial management and governance mechanisms.

    The WBG has projects in the pipeline ranging from education, public financial management, agricultural transformation, to transport and urban development to improve the lives of both urban and rural inhabitants. They include the Liberia Education Quality Improvement Project (LEQIP), Liberia Integrated Public Financial Management Reform Project II, Monrovia Urban Sanitation Infrastructure Project, Smallholder Agriculture Transformation and Agribusiness Revitalization Project (STAR-P) to improve access and quality of education, improve access to services, and enhance agricultural productivity of smallholder farmers and facilitate inclusive private sector investment in selected value chains.

    The Bank is also supporting Liberia through regional projects covering the health, fisheries and energy sectors.  

    Last Updated: Oct 12, 2018

  • 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 is comprised 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). 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. This fund will be invested through Liberian Banks and negotiation is progressing with these.  

    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.

    Last Updated: Oct 12, 2018

  • 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), 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 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 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: Oct 12, 2018

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LENDING

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

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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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