-Of Over $35 Million as 2024 Ends
By Jerromie S. Walters
As of December 27, 2024, Liberia is grappling with a budget shortfall exceeding $35 million. This comes despite earlier reports that the Liberia Revenue Authority (LRA) had surpassed its revenue target for the year.
In a confidential presentation, sources from the LRA revealed a significant decline in revenue collection. The LRA had initially reported collecting $572.6 million by the end of October, exceeding its target of $568.2 million. However, the situation has since changed.
The presentation indicates that the Department of Customs performed well, collecting $213.7 million, which is 104% of its year-to-date budget projection of $204.9 million. In contrast, the Domestic Tax Department fell short, collecting only $449.6 million against a projection of $485.9 million.
This has resulted in a positive variance of $8.7 million for the Customs Department. Conversely, the Domestic Tax Department faces a negative variance of $36.3 million.
With total collections reaching $703.2 million as of December 27, questions arise about whether the LRA can meet its revised revenue target of $738.9 million for 2024.
Many Liberians are left wondering if the LRA can achieve the ambitious goal of collecting a billion dollars in revenue, as suggested by the LRA leadership. As the year comes to a close, the outlook remains uncertain.
The Liberian Economy
According to the World Bank, about 50% of Liberia’s population lives below the poverty line. Economic growth has not been inclusive, and many citizens continue to struggle with basic needs. As of December 27, 2024, Liberia is grappling with a budget shortfall exceeding $35 million.
However, corruption remains a significant issue, impacting business operations and investor confidence. Transparency International’s Corruption Perceptions Index rated Liberia poorly, indicating widespread corruption.
Liberia’s GDP growth rate was projected to be around 3.6% by 2023, according to the World Bank. This growth is primarily driven by the agriculture, mining, and services sectors. The inflation rate in Liberia has been a considerable concern. As of mid-2023, it was reported at approximately 9.5%, driven by rising food prices and supply chain disruptions.
The unemployment rate in Liberia also remains high, particularly among youth. Estimates suggest that youth unemployment could be as high as 40%, which poses a notable challenge to economic stability and growth.
