-To Boost Liberia’s Economic Growth
By Vaye Lepolu and Jessica Cox
Monrovia- The World Bank has emphasized the urgent need for institutional and policy reforms to drive sustainable economic growth and development in Liberia. This call to action came during the launch of the World Bank’s flagship report, Liberia Economic Memorandum*, titled “Escaping the Natural Resource Trap: Pathways to Sustainable Growth and Economic Diversification in Liberia.”
The report provides a comprehensive analysis of Liberia’s economic outlook, highlighting how the country’s vulnerability to external shocks has hindered its sustainable growth and development. It also offers actionable insights to support the implementation of Liberia’s ARREST Agenda for Inclusive Development (AAID), a national development plan aimed at transforming the economy and improving the livelihoods of Liberians.
Institutional Reforms
Georgia Wallan, World Bank Liberia Country Manager, emphasized the critical role of institutional and policy reforms in modernizing Liberia’s public sector. “These reforms are essential to provide Liberia with the institutions needed to lead its economic transformation,” she stated. “In line with the ambitions of the AAID, this would involve a systematic overhaul of the business climate to promote investment, innovation, and job creation; delivering higher-quality, more efficient public services to enhance human capital, particularly in education and health; and increasing the efficiency and scale of public investments in power, roads, and telecommunications.”
The report outlines five key transformations necessary for Liberia to achieve long-term development, foster economic expansion, create employment, and alleviate poverty. These include:
1. Reshaping Liberia’s Macroeconomy: Reducing over-reliance on the mining sector and diversifying into sectors that align with the labor demands of an expanding urban population.
2. Empowering the Private Sector: Transitioning from a state-centric mindset to recognizing the private sector as the primary driver of economic growth and job creation.
3. Modernizing the Public Sector: Implementing deep-seated policy and institutional reforms to improve governance and service delivery.
4. Enhancing Human Capital: Improving education and health outcomes by extending the expected years of schooling from 4 to 10 years and enhancing the quality of education.
5. Boosting Investments: Increasing private and public investments to 18% and 12% of GDP, respectively, which could drive GDP growth by approximately one percentage point annually.
Ambitious Reforms
The report highlights Liberia’s potential for significant economic improvement over the medium to long term, provided that ambitious and credible reforms are implemented promptly. A high-ambition reform program could double annual productivity growth in the non-mining sector and position Liberia to achieve lower-middle-income status before 2040.
Wallan stressed the importance of the AAID in resetting Liberia’s development model. “The AAID aims to shift Liberia’s economy from resource export dependency to sustainable value addition, processing, and innovation. This is a bold but necessary pathway to a more prosperous future for all Liberians,” she said.
World Bank’s Commitment to Liberia
The World Bank Group has reaffirmed its commitment to supporting Liberia’s development goals. Wallan announced that the forthcoming *Country Partnership Framework* will align closely with the AAID, providing strategic support for Liberia’s economic transformation.
The Liberia Economic Memorandum*, produced twice a decade, is the World Bank’s most comprehensive analytical report on Liberia. It examines the country’s development trajectory and identifies actionable steps to shape its future. Drawing on lessons from peer countries, the report aims to accelerate results and shorten Liberia’s learning curve in achieving sustainable growth.
The AAID, Liberia’s national development plan for 2025–2029, sets an ambitious target of increasing the income of Liberians by 25% within five years. While this goal is challenging, the World Bank believes it is achievable with the right reforms and sustained commitment.
“The AAID represents a strategic reorientation of Liberia’s development model,” Wallan concluded. “The World Bank stands ready to support this reset and the bold aspirations it embodies. Together, we can build a more prosperous future for all Liberians.”
