Liberia is marking 13 years of peace and stability since the war ended in 2003. The country continues to enjoy a stable and democratic government following two presidential and legislative elections, including a Special Senatorial Election in 2014. President Ellen Johnson Sirleaf is expected to remain in power until the next presidential election in October 2017, and her successor to be inaugurated into office in January 2018.

Political attention is now being focused on the 2017 presidential election, which will be held in a complex political, social and economic situation marked by the twin shocks of the Ebola crisis and the sharp decline in commodity prices, public concern over the peacekeeping mission’s drawdown, and challenges posed by the security transition.

On June 30, 2016, the multinational peacekeeping force will officially handover the security responsibilities to the Government of Liberia with a reduced presence on the ground. The UN Mission in Liberia (UNMIL) stated that the Mission will remain engaged with the authorities in strengthening the legal framework and institutional structures of the justice and security sectors, as well as in establishing proper accountability mechanisms. In accordance with Security Council resolution 223, the Mission had implemented its drawdown plan and the authorized reductions of its military and police components, which will be further reduced from the authorized strength of 3,590 to 1,240 military personnel and from 1,515 to 606 police personnel by June 30, 2016.

Economic Overview

Liberia’s economy deteriorated further in 2015, with GDP growth of 0.3%, further down from 0.7% in 2014. The country is struggling to recover from the twin shocks of the Ebola crisis and the sharp decline in commodity prices, which led to business closures, including of mines and consequent job losses and reduced fiscal revenues. Substantial downside risks remain, which challenge the government’s recovery efforts and plans to diversify the economy to mitigate the impact of such future shocks. 

The continued terms-of-trade shocks and the reversal in private investment inflows due to the outbreak of the Ebola Virus Disease (EVD), have prolonged Liberia’s post-Ebola economic recovery. The mining sector, which was one of the key drivers of economic growth declined by 17%, followed by 1.1% decline in the agriculture sector. The economy was however salvaged by a relatively resilient services sector, which grew by 5%; attributable mainly to the recovery in construction, hotels and trading services. Furthermore, fiscal revenues are projected to decline by 12%, based on the original forecast of US$474million. This will necessitate expenditure cuts by Government in order to maintain the already high fiscal deficit target of 8.5% of GDP in FY2016.

GDP growth is projected to recover to about 3.9% in 2016. The recovery is expected to be driven by the coming on stream of a new gold mining concession, and improvements in services as rural and urban markets re-open. However, the slowing of China’s economic growth and its potential adverse impact on the global economy are likely to keep already low commodity prices depressed. This remains a major downside risk for Liberia, given its dependence on the exports of rubber, iron ore and oil palm for growth, employment and fiscal revenues. Prudent fiscal and monetary policies are critical to help mitigate the shocks but a restart of both public and private investment will be important to help spur economic diversification and growth over the medium term.

Last Updated: Apr 09, 2016

World Bank Group (WBG) Engagement

The Liberia Country Partnership Strategy (CPS) FY13-FY17 supports 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.

The WBG Portfolio in Liberia

The Liberian portfolio remains at 15 projects with an increase in net commitment of US$598.3 million as of June 30, 2015. 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.

In response to the Ebola epidemic, the WBG mobilized significant grant resources from the IDA Crisis Response Window amounting to US$167 million for the Ebola Emergency Response Project (EERP). The EERP has been supporting the delivery of essential health services since the height of the Ebola outbreak, providing essential drugs, infection prevention and control materials, and hazard pay (risk premium for Ebola) to the health sector workers. Going forward, the project will also support critical activities of the country’s Investment Plan for Building a Resilient Health System in Liberia.

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.

In support of the transport portfolio, a major priority for Liberia under the Liberia Road Asset Management Project, IDA committed additional financing credit of $67.7 million. The Liberia Reconstruction Trust Fund (LRTF) also committed $108.9 million grant to support the transport sector. For the energy portfolio, the Liberia Accelerated Electricity Expansion Project was approved by the Board and IDA committed a total of $95 million. A new Liberia Renewable Energy Access Project to increase access to affordable and reliable electricity and to foster the use of renewable energy sources in Liberia was approved in January 2016. The Bank committed $25 million grant and $2 million IDA credit for this project. Also a $10 million IDA credit was approved by the Board for the Liberia Urban Water Supply Project. Investing in youth remains a priority for the Liberian Government. The Bank’s Board therefore approved the Liberia Youth Opportunities Project, committing $10 million IDA credit.

Last Updated: Apr 09, 2016

The International Finance Corporation (IFC) in Liberia

IFC’s investments and advisory services are targeted to achieve private sector development in delivering the agreed Country Partnership Strategy FY13-FY17 (CPS). As at July 2015, IFC investment comprises: 

  • $37.3 million financing in four Liberian banks under Ebola Emergency Liquidity Facility (EELF) and Global Trade Facility
  • $8.6 million in agriculture financing  in the rubber and cocoa sectors
  • $24 million in the mining sector
  • $13 mission (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 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.

IFC, through its investment and advisory services plans to focus on:

  • Supporting private sector led investments that deliver transformational impact in power generation through partnership with an IPP under a joint WBG framework to power sector development in Liberia and IFC’s “Power in Fragile and Conflict-affected States” initiative.
  • Strengthening Financial Markets: IFC has provided EELF and trade lines to four local banks and will continue to strengthen the Liberian financial sector and explore opportunities, working with new banks under the RRF financing and injection of equity/tier two capital into the banking sector.
  • Supporting the West Africa Venture Fund: In recognition of capital constraints of SMEs, IFC set up West Africa Venture Fund (WAVF) for Liberia and Sierra Leone, to provide risk capital and advisory services to SMEs. WAVF with an initial investment of $13.5 million and a technical assistance grants fund of $2 million split evenly between both countries is managed by a Fund Manager, Unique Capital Ventures. The average investment size is $100,000 - $500,000. To date, the fund has committed more than $5 million in equity investments in 13 companies. This includes in heavy equipment rental, logistics, bakery and small processing operations. In October 2014, Cordaid, a Dutch based NGO, invested additional US$4.5 million in WAVF increasing total fund under management $18 million. This would enable the fund reach more SMEs in Liberia and Sierra Leone.
  • Continued support for SMEs: IFC will work with local banks to provide needed financing for SMEs. In June 2014 IFC worked with the Central Bank of Liberia (CBL) to launch a Collateral Registry, which will enhance access to affordable capital for SMEs by encouraging use of movable assets as collateral. IFC advisory services continues to focus its efforts in Liberia on supporting the growth of smaller businesses and on helping the country improve its investment climate.

Last Updated: Apr 09, 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), 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.

There was strong collaboration and coordination among many donors during the Ebola epidemic. This greatly contributed to containing the epidemic and subsequently providing the foundation for strengthening the health system of Liberia.

Last Updated: Apr 09, 2016


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

*Amounts include IBRD and IDA commitments