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Overview

  • One of the hardest-hit countries by Ebola, Liberia was recovering from a health crisis that took thousands of lives and devastated the economy when the COVID-19 pandemic started. Despite its abundant natural wealth and favorable geographic location, Liberia is among the world’s poorest countries.

    While poor households are heavily concentrated in rural areas, urban poverty also poses a significant challenge. In 2016, more than 2.2 million Liberians were unable to meet their basic food needs, of which almost 1.5 million (68%) resided in rural areas, 1.6 million were below the food-poverty line, and 670,000 lived in extreme poverty. Regional and urban-rural disparities in poverty rates widened in the wake of the Ebola crisis and the collapse of global commodity prices. T

    The country is rich in natural resources which include iron ore, diamonds, gold, fertile soil, fishery and forestry. However, the economic potential of these assets remains largely untapped.

    Political Update

    The peaceful handover of power in January 2018 from one democratically elected administration to another is a turning point in Liberia’s history and presents an opportunity to reinvigorate its development process. The administration of President George M. Weah has reached the half-way mark of its six-year tenure. Next Presidential and Legislative elections will take place in 2023.

    All political actors are now bracing themselves for the Senatorial Mid-Term Elections to take place on December 8, 2020. The tenure of 15 out of 30 senators will be expiring and those seeking re-election will have to face the electorates. The political field is expected to be crowded for these elections because it could serve as a litmus test on the 2023 polls. During the December elections, a national referendum to reduce the tenure of the President and members of the House of Representatives from 6 to 5 years and senators from 9 to 7 years will take place. Dual citizenship for diaspora-based Liberians is also included. 

     

     

    Economic Overview

     

    Liberia’s economy, already enduring a challenging domestic and external environment, is now facing the COVID-19 pandemic. The economy contracted by 2.3% in 2019 on the back of weak consumption and output. High inflation, at 27%, eroded purchasing power and consequently welfare. The burgeoning COVID-19 pandemic poses a major threat to the economy. Under the baseline scenario, real GDP is projected to contract by 2.6% in 2020 due to the effects of COVID-19 on output across multiple sectors, especially services and manufacturing, reflecting a combination of precautionary behavioral changes and public policies designed to halt the spread of the disease.

    The government’s fiscal position deteriorated significantly in FY2019. The fiscal deficit widened from 4.8% of GDP in FY2018 to 6.1% in FY2019, while the primary deficit rose from 4.2% of GDP to 5.4 %. Revenues failed to meet expectations across all major categories, but shortfall in external grants and nontax revenues were especially acute. Public expenditures rose by about 8% in nominal terms, or about 4 %age points of GDP. Liberia’s total public debt stock reached 52.4% of GDP. In FY2020, fiscal deficit is expected to remain at FY2019 level (6.1 % of GDP) thanks to the large increase in donor financing.

    Liberia’s current account deficit narrowed to 22.1% of GDP in 2019 from 23.5% in 2018. The country’s external position is projected to improve over the medium term despite lower prices for all its major export commodities except gold. Meanwhile, the current account deficit is expected to widen from 22.1% of GDP in 2019 to 22.7 % in 2020 before narrowing to 19.7% of GDP by 2022 despite some improvements in the trade balance. The current account deficit will be financed by the net use of IMF credit and capital inflows to the agriculture, mining, and infrastructure sectors as the COVID-19 pandemic subsides.

    Over the medium term, a sharp rebound is expected in 2021, supported by efforts to contain the outbreak and structural reforms designed to alleviate constrains on productivity growth and enhance recovery in various sectors.  Growth is projected to recover to 4.1% on average during 2021-22. However, a protracted pandemic, characterized by deteriorating global conditions (including global supply, demand, and terms-of-trade shocks), coupled with financial sector vulnerabilities and insufficient progress on structural reforms could disrupt economic activity further and lead to sharper contraction in 2020, followed by slower recovery in 2021.

    Last Updated: Oct 16, 2020

  • World Bank Group (WBG) Engagement

    The World Bank Group Country Partnership Framework (CPF) for Liberia, guides 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 supports 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

     

    Currently, the World Bank active portfolio in Liberia is composed of 23 projects, financed from multiple sources including IDA (National & Regional) and sector specific/thematic trust funds. The value of the portfolio, including all sources of finance is close to $1.25 billion ($1,185.6 million), 80% ($943.5 million) of which consist of IDA resources (National & Regional). Contributions from development partners to active projects through single and multi-donor trust funds account for close to $242.1 million. Cumulatively, close to 60% of the portfolio has been disbursed mainly towards the support of key infrastructure sectors (roads & energy), health systems strengthening & disease surveillance (Ebola), agriculture, youth development, waste management, and water supply. In March 2020, in response to the COVID-19 pandemic, the health team prepared a package of support worth $17 million to support the government in all areas of preparedness and response including provision of critical medical supplies, laboratory readiness, case management, and community engagement.

     

    International Finance Corporation (IFC) in Liberia

     

    IFC Liberia is focused on achieving private sector development through key investment and advisory initiatives. As of 2019, 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).  In December 2018, IFC signed a 4-year $6m donor agreement with SIDA (Swedish International Development Corporation Agency) for IFC to implement 10 key advisory programs across key sectors. With this advisory engagement, IFC will work with the World Bank, Government of Liberia, and the private sector to improve the business climate and unlock key investment opportunities in the country.

    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. The IFC Liberia advisory program (supported by SIDA) focuses on 4 key areas to be implemented from 2019 - 2022: i) agriculture value chain development, ii) trade facilitation, iii) improving access to finance, and iv) business climate reform. IFC’s investment portfolio is diversified across sectors, however, has focus on agriculture and financial services sectors, which present viable and sustainable investment and employment opportunities.

    Last Updated: Oct 16, 2020

  • Under the Energy sector, in the northern part of Monrovia and along two key economic corridors, the Bank is extending electricity to about 48 communities and towns (including 3 county capitals outside Monrovia) and would connect 46,500 households and 450 commercial customers. To date, 24,200 customers have been connected. The Bank has also prioritized the expansion and rehabilitation of transmission and distribution network. Beyond Monrovia, 51,100 people in remote rural areas have benefited from stand-alone solar systems including lanterns and solar home systems. The Bank supported the optimization study for power development in Liberia that identified the Priority Investment Project for power generation in Liberia including priority hydropower projects on the St. Paul and Via rivers, as well as production, storage, and transmission. In addition, the Cote d'Ivoire, Liberia, Sierra Leone, and Guinea (CLSG) regional interconnecting line would: (i) increase the supply of cost-effective electricity to augment local generation particularly during the dry season; (ii) expand electrification to remote areas along the line; and (iv) open access to larger markets nationally and regionally.

    In support of the Health sector, the Bank has financed various components of health system strengthening in the country. This include construction of critical infrastructure and capacity building of health workers. In infrastructure, a new hospital, the Redemption Hospital is under construction and will be the largest referral center for maternal and child health care in the country. In addition, the Bank has also financed the construction of 3 integrated severe infection treatment units constructed in 3 major hospitals (Redemption, Phebe and Tellewoyan) worst hit by EVD; 82 staff housing units in 7 counties; 24 triages in 15 counties; and 2 student dormitory buildings for 96 students, including 2 classroom buildings and a mini-laboratory for undergraduate medical students. Training has been provided for health providers, including 45 post-graduates in medicine, pediatrics, obstetrics and surgery, and 996 mental health care providers (first time in country). A performance-based financing model has been adopted at secondary and primary levels of care and implemented in 8 hospitals and in 3 counties. During and after Ebola, the disease surveillance has been a key priority under the World Bank program.

    For Youth Employment, as of 2017 the Youth Opportunities Project has enrolled an overall 12,920 youth, 50 % of whom are females. 10,120 of these beneficiaries live in hard to reach communities in rural Liberia and have received support through the Community Livelihoods and Agriculture Support component of the project. With the support provided, beneficiaries of this component have cultivated over 8,000 acres of farmland with a variety of food crops, thereby contributing to increased food security in many parts of Liberia. The project has also provided support to 2,286 youths living in urban areas in Montserrdo County (Greater Monrovia), with training and business startup grants which has helped them establish and operate 361 small businesses. Another 515 youths (aged 15—17) also living in Montserrado County have received job readiness training to prepare them for the labor market.

    Last Updated: Oct 16, 2020

  • Donor Coordination

    The World Bank actively participates in the Consultative Partners Group (CPG), an in-country donor coordinating body formed by heads of agencies. The CPG is a forum formed around key development challenges in the country whereby financing is coordinated with an aim to enhance development impact. In addition, the Liberia country program has received significant contributions from development partners. The Liberia Reconstruction Trust Fund has been financed by Germany (KfW), the United Kingdom (DFID), the European Union, Sweden (Sida), Irish Aid and Norway in support of: transport, energy, and waste management. In governance and human development, our key partners are the United States Agency for International Development (USAID), the African Development Bank (AfDB), the European Union, and Sida. In health and education, major multi-donor trust funds like the Global Financing Facility (GFF), the Global Environment Facility (GEF), and the Global Partnership for Education (GPE) have provided seed funding for core work in these sectors. Also in health, the GFF leads the dialogue (and convening joint missions) with development partners committed to the country’s investment case for maternal, child and adolescent health (USAID, Global Fund, United Nations Children’s Fund (UNICEF), World Health Organization (WHO), the United Nations Population Fund (UNFPA), the Government of Japan, The Vaccine Alliance (GAVI), the German Federal Ministry of Economic Cooperation and Development (BMZ), International Planned Parenthood Federation and Last Mile Health). In productive sectors, Norway has been the only financier of the World Bank program, and in agriculture, a close partnership with the International Fund for Agricultural Development (IFAD) could double the recently approved STAR-P IDA program.

    Last Updated: Oct 16, 2020

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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
External Affairs Officer
+231-88-6-606-967
msahr@worldbank.org
For project-related issues and complaints
liberiaalert@worldbank.org