Liberia’s economy is caught in a dangerous cycle of dependency on a limited number of natural resources, with the World Bank warning that the nation remains highly vulnerable due to its reliance on a few key commodities. Rubber, iron ore, timber, and gold are the primary contributors to the country’s economic output and export revenues. However, this heavy focus on natural resources has exposed Liberia to the whims of global price fluctuations, deepening economic instability and hampering the growth of other sectors.
The report, released in March 2025, highlights the damaging effects of this concentration, noting that the nation’s over-reliance on commodities has stifled the development of more stable and diversified industries. While the extraction sector continues to drive the economy, non-extractive sectors such as manufacturing and services have remained stagnant, unable to compete or expand due to a lack of investment and policy focus.
Liberia’s dual currency system, compounded by high levels of dollarization, has further complicated the nation’s economic landscape. This dual system has made it even more difficult for the country to develop a stable currency and achieve sustained economic growth. The World Bank has called for a shift in economic strategy, urging the country to pursue reforms aimed at boosting productivity outside the mining sector. Sustainable growth, the report stresses, can only be achieved through enhanced investment and exports in non-mining industries.
Moreover, the report underscores serious challenges in trade facilitation, which exacerbate Liberia’s economic vulnerabilities. The World Bank points to significant deficiencies in automation, border agency collaboration, governance, impartiality, and procedural formalities. The country received poor scores in both domestic and external trade facilitation components, including the delegation of control to customs authorities and cooperation among national border agencies. Furthermore, Liberia’s customs system is marred by a lack of transparency and weak governance structures, making trade procedures more cumbersome and inefficient.
Liberia also faces challenges in the area of automation, with the country failing to fully implement electronic systems for data exchange, risk management, border procedures, and payments. These inefficiencies contribute to delays and higher costs for businesses, further deterring investment in sectors outside of natural resources.
However, Liberia was noted for outperforming some regional peers when it comes to the fees and charges imposed on imports and exports, offering some positive outlook in the area of trade costs.
The World Bank’s report concludes with a call for Liberia to enact strategic policy reforms to diversify its economy, improve trade facilitation, and build resilience against the volatile global commodity markets. Only through these comprehensive changes can Liberia hope to break free from its reliance on a narrow set of natural resources and chart a path toward more sustainable and inclusive economic growth.
