A new World Bank report paints a troubling picture of Liberia’s economic future, warning that the country remains trapped in a cycle of poverty and stagnation unless major structural reforms are implemented. According to the report, Liberia ranks among the poorest countries globally, with 59 percent of its population living in poverty and little progress toward long-term development.
The report, authored by a World Bank team led by Mamadou Ndione, emphasizes that Liberia’s economic trajectory since its civil wars has been marked by repeated shocks, including the Ebola epidemic, the withdrawal of UN peacekeepers, and the COVID-19 pandemic. These crises have stalled economic growth, leaving real GDP per capita nearly unchanged since 2003. The World Bank’s findings suggest that without urgent policy shifts, Liberia is unlikely to reach its goal of attaining middle-income status by 2030.
At the heart of Liberia’s economic challenges is its dependence on natural resource extraction, particularly in the mining sector. The report argues that this reliance makes the country vulnerable to external shocks, contributing to recurring cycles of economic collapse and fragile recovery. Diversification into other industries such as agro-processing and services is identified as a critical step toward building a more resilient and inclusive economy.
The World Bank outlines five key transformations necessary for Liberia to escape its current economic trap. These include increasing domestic savings, reducing the current account deficit, and boosting public and private investment in essential infrastructure such as roads and electricity. Another critical recommendation is reducing the country’s reliance on the mining sector by encouraging the growth of manufacturing and services, particularly in urban areas where employment needs are rising.
The report also calls for a shift from a state-centered economic model to one driven by the private sector. This would require removing barriers to business growth, promoting entrepreneurship, and fostering an investment-friendly climate. Additionally, the World Bank emphasizes the need for institutional reforms to modernize the public sector, strengthen property rights, and combat corruption.
While recognizing the enormity of the challenge, the World Bank report argues that progress over the next five years under the administration elected in October 2023 will be crucial. Failure to enact structural reforms would mean that Liberia’s economy is likely to grow at a modest 5.5 percent annually until 2029 before slowing to about 4 percent through 2050. Under this “business as usual” scenario, real GDP per capita would not reach the middle-income threshold of US$1,000 until around 2050—20 years behind the country’s stated goal.
The report also highlights the human cost of economic stagnation. Liberia scores just 0.32 on the World Bank’s Human Capital Index, suggesting that a newborn today will only achieve 32 percent of their potential productivity as an adult under current conditions. Issues such as child stunting, poor education quality, and inadequate sanitation continue to undermine human development, especially in rural areas where poverty is most severe.
Despite these challenges, the World Bank remains cautiously optimistic that with decisive action, Liberia can reverse its economic fortunes. The report underscores that if the government prioritizes reform and investment in human capital, the country could break free from its historical pattern of boom-and-bust cycles and pave the way for sustained growth and poverty reduction.
