-As unemployment staggers, public-sector investment remains low
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By Jerromie S. Walters
Monrovia, Liberia — Obediah Kormon, an enthusiastic youth in the world’s 8th poorest country (Liberia) lies beneath a vehicle, demanding employment in a way he believes is the only option. Many say this occurrence points to the unimaginable unemployment rate in a nation that the world sees to be among the poorest, especially when it continues to grapple with economic challenges, including high poverty rates, limited infrastructure, and a struggling public sector.
Amid all that has fueled many concerns about the 8th poorest country not being that poor, the fiscal envelope for 2025 of this 177-year-old state stands at US$880.66 million, with a staggering 87.9% (US$773.95 million) allocated to recurrent expenditures. These include salaries, benefits, fuel, foreign travels, luxurious cars, entertainment, food, and allowances. In contrast, only 12.1% (US$106.72 million) is earmarked for public sector investment projects (PSIP), which are critical for driving long-term economic growth and development.
However, this lopsided budget comes at a precarious time, as Liberia is among hundreds of states that are facing the suspension of U.S. aid, effective January 20, 2025. The freeze has disrupted critical development projects and forced staff furloughs at the U.S. Agency for International Development (USAID), further straining an already fragile economy like ours.
A Growing Concern
Recurrent expenditures, which cover the day-to-day operational costs of the government, have surged by 15.3% from the previous fiscal year, rising from US$671.42 million in 2024 to US$773.95 million in 2025. This increase has flared criticism, with many questioning the government’s commitment to addressing poverty and fostering economic growth.
Notably, the budgets of top officials have seen significant hikes: – Vice President Jeremiah Koung’s budget increased from US$3.7 million to US$3.9 million. – Senate Pro-Tempore Nyonblee Karnga’s budget rose from US$1 million to US$1.2 million. – Deputy Speaker Thomas Fallah’s budget jumped to US$1.2 million from US$645,000. – President Joseph Boakai’s budget doubled from US$1.7 million in 2024 to US$3.4 million in 2025.
Breaking Down the Budget
The core recurrent expenditure for 2025 is outlined as follows: Compensation of Employees (US$315.59 million): Accounting for 41.8% of recurrent spending, this category covers salaries for civil servants, military personnel, and elected officials. While fair compensation is essential, critics argue that the disproportionate allocation leaves little room for critical investments in infrastructure, healthcare, and education.
Goods and Services (US$138.71 million): This 18.3% slice of recurrent spending includes training for law enforcement, medical supplies, educational materials, and agricultural inputs. While necessary, questions linger about the efficiency and long-term impact of these expenditures.
Subsidies (US$2.95 million): A paltry 0.4% of recurrent spending is allocated to subsidies, intended to support private-sector institutions in education, health, and commerce. Critics contend that this amount is insufficient to address pressing needs.
Grants (US$117.01 million): Representing 15.6% of recurrent spending, this category includes transfers to public hospitals, contributions to international organizations, and funding for tuition-free policies. While commendable, their effectiveness hinges on proper implementation.
A Neglected Priority
Public sector investment, which accounts for only 12.1% of the total budget, is critical for addressing Liberia’s infrastructure deficit, improving healthcare and education systems, and creating jobs. However, the limited allocation to PSIP has raised concerns about the government’s commitment to long-term development.
In a country where access to basic services remains a challenge for many, pundits say the heavy focus on recurrent spending risks perpetuating the cycle of poverty and underdevelopment. Critics argue that without significant investments in infrastructure, agriculture, and human capital, Liberia’s economic prospects will remain bleak.
U.S. Aid Suspension
The suspension of U.S. aid has further exacerbated Liberia’s economic woes. Recently, former U.S. President Donald Trump criticized American foreign aid to Liberia, questioning a $1.5 million allocation aimed at bolstering voter confidence in the 2023 elections. His remarks came amid mounting concern over the suspension’s impact on critical development projects.
Finance and Development Planning Minister Augustine Kpehe Ngafuan recently highlighted the financial strain caused by the aid freeze, stating that it has derailed key reforms, including a $70 million USAID-backed initiative to modernize Liberia’s tax system.
A Nation in Need of Transformation
Liberia’s economy is heavily reliant on foreign aid and remittances, with limited domestic revenue generation capacity. The country ranks among the poorest in the world, with a significant portion of the population living below the poverty line. Against this backdrop, the 2025 budget represents a missed opportunity to prioritize investments that could drive sustainable development and improve the lives of ordinary Liberians.
While recurrent expenditures are necessary for the functioning of the government, the disproportionate allocation to salaries and operational costs raises questions about fiscal discipline and prioritization. Analysts have called for a more balanced approach that allocates greater resources to public investments while ensuring transparency and accountability in the use of funds.
Calls for Reform
As Liberia helms its economic challenges, there is a growing consensus that the government must take bold steps to reorient its spending priorities. This includes reducing wasteful expenditures, such as excessive foreign travels and luxury purchases, and redirecting resources toward projects that can deliver tangible benefits to the population.
Moreover, analysts say efforts to improve revenue collection and combat corruption are essential to ensure that limited resources are used effectively. Without these reforms, they (pundits) argue that Liberia’s development goals will remain out of reach, and the country will continue to lag behind its peers in the region.
