Monrovia: Liberia’s economy grew by an impressive 4.8% in 2024, fueled by significant expansions in the mining, services, and agricultural sectors, according to a report from the World Bank. The positive growth marks a recovery from the challenges faced in recent years, signaling a promising economic trajectory for the country.
Industrial and Agricultural Growth
The report highlighted that the industrial sector led the charge with a 6.0% expansion, driven largely by the performance of iron ore and gold mining, alongside a boom in construction activities. While the services sector also showed strong growth, increasing by 4.2%, reflecting notable gains in finance, hospitality, trade, and transportation. The agricultural sector recorded a notable recovery, rising by 3.5%, up from a mere 1.4% in 2023, largely due to higher rubber production and improved conditions for agricultural activities.
Inflation Eases but New Pressures Loom
According to the report, inflation in Liberia saw a significant easing in 2024, dropping to 8.4% from 10.1% in 2023. This decline was attributed to the government’s tight monetary policies, stable exchange rates, and a reduction in food and fuel prices, highlighting that throughout the year, the central bank maintained a policy rate above inflation, starting at 20% before dropping to 17%. Food inflation showed marked improvement, falling from 26.9% in 2023 to 9.7% by December 2024.
However, the latest data paints a concerning picture for 2025. Inflation surged to 13.1% in February, driven by rising costs in food, healthcare, and the restaurant sector. The spike in inflation suggests that while 2024 showed signs of recovery, pressures remain in managing the cost of living.
Poverty and Fiscal Deficit Trends
The report amongst other things revealed that Liberia’s extreme poverty rate, which had reached a high of 40.9% in 2022, saw a reduction in 2024, dropping to 29.0%. This improvement is attributed to favorable economic conditions, including lower inflation rates, which have helped reverse the upward poverty trend. However, the poverty level remains a significant challenge, with Liberia’s extreme poverty line set at $2.15 per person per day (2017 PPP).In terms of fiscal health, Liberia showed strong fiscal discipline in 2024. The fiscal deficit narrowed significantly, falling to 2.7% of GDP, down from 7.1% in 2023. This reduction was driven by a 4% reduction in public spending and a modest increase of 0.8% in domestic revenue. Public debt stood at 57% of GDP, a slight decrease from 58.8% in 2023, indicating some progress in managing the country’s fiscal responsibilities.
Current Account Deficit and Trade Dynamics
Liberia’s current account deficit remained high at 22.1% of GDP in 2024, although it showed some improvement from the 26.4% recorded in 2023. The trade deficit also narrowed to 13.7%, driven by strong exports of gold and iron ore. This narrowing of the trade deficit provided some relief, as the current account deficit was financed by capital and financial inflows amounting to 21.6% of GDP. These inflows were driven by foreign direct investment (FDI), multilateral and private financing, and capital inflows.
Outlook and Challenges Ahead
While Liberia’s economy has shown robust growth, challenges remain. Inflation, poverty, and the high current account deficit continue to pose risks to the country’s long-term stability. The government will need to maintain fiscal discipline while fostering sustainable growth across key sectors such as mining, agriculture, and services.
Political Overview
The report highlighted the Government commitment to establish the “Office of a War and Economic Crimes Court for Liberia” through an Executive Order on May 2, 2024. The Court is establish to investigate atrocities committed during Liberia’s 14 years of civil war and will aim to hold responsible parties accountable for their crimes. The report further highlighted that on May 3, 2024, the Liberian Senate and House of Representatives endorsed a joint resolution in support of the mechanisms for the court’s establishment.The World Bank latest report also revealed that in line with a strong focus on accountability and good governance, the Government of Liberia, under the administration of President Joseph Boakai has also established an Assets Recovery and Property Retrieval Taskforce (AREPT) to pursue allegations of illegal acquisition of wealth and property while placing emphasis on transparency and accountability.
According to the Liberia Anti-Corruption Commission (LACC), only 26.5% of officials across the three branches of government have fully met asset declaration compliance requirements. As a result, President Joseph N. Boakai suspended over 300 public officials with salaries cut pending declaration of their assets.The report further highlighted the unwavering commitment of the General Auditing Commission active engagement in conducting financial audits, some of which have led to arrests and issuance of indictments. “The Government has outlined its vision for Liberia’s development through the ARREST agenda – an acronym representing Agriculture, Roads, Rule of Law, Education, Sanitation, and Tourism,” the report highlighted. The Government wants to leverage these key sectors to reverse economic stagnation, emphasizing the need for comprehensive and interconnected development strategies.The World Bank’s report underscores the importance of addressing these challenges to ensure Liberia’s continued economic recovery.
