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
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
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
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-
The current account deficit remained high (23.3% of GDP in 2018) as improvements in the trade balance
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
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,
Last Updated: Apr 09, 2019