Political Overview
The new Liberian Government was inaugured into office on January 22, 2024. His Excellency
President Joseph N. Boakai’s full cabinet was confirmed within weeks of the inauguration.
President Boakai presided over his third Cabinet meeting in early April and he is putting
measures into place to prioritize critical deliverables during his first 100 days in office.
The new administration has outlined its vision for Liberia’s development through the ARREST
agenda – an acronym representing Agriculture, Roads, Rule of Law, Education, Sanitation, and
Tourism. The Government wants to leverage these key sectors to reverse economic stagnation,
emphasizing the need for comprehensive and interconnected development strategies.
The Government has also established an Assets Recovery and Property Retrieval Taskforce to
pursue allegations of illegal acquisition of wealth and property while placing emphasis on
transparency and accountability.
Economic Overview
Liberia’s economy expanded by 4.7% in 2023. The expansion in 2023 was driven mainly by
mining, specifically gold production. Growth in the primary sector was sluggish – 1.4% as
output of key agricultural products such as rubber and crude palm oil declined during the year.
Output in the secondary sector expanded by 13.9% led by mining largely driven by increased
gold production. Growth in services picked up slightly from 2.8% in 2022 to 3.8% in 2023.
Headline inflation increased in 2023 driven by increases in transport and food prices.
Annual average inflation rose to 10.1% in 2023 from 7.6% in 2022. Food inflation reached
12.3% in 2023, from a disinflation of 1.6% in 2022, while nonfood inflation averaged 10.3%,
down slightly from 10.6% during the same period.
The government’s fiscal deficit remained high in 2023. The fiscal deficit is estimated at 5.5%
of GDP in 2023, 0.1 percentage points lower than in 2022 due to declines in revenue and grants
and increased consumption spending. With a debt-to-GDP ratio of 54.5, Liberia is assessed to be
at moderate risk of external debt distress and high risk of overall debt distress.
Liberia's current account deficit remained high in 2023, despite increased gold exports. The
country’s current account deficit increased to 24.4% of GDP, up from 17.7% in 2022. The
increase in the current account deficit was driven by trade dynamics. The trade deficit worsened
to 18.4% of GDP, from 11.8% in 2022, as growth in imports driven by minerals, machinery, and
petroleum outpaced the growth in exports. The current account deficit was financed by net IMF
credit, loans, and drawdowns of gross official reserves.
The monetary policy stance has remained appropriately tight in 2023 and responsive to
overall conditions. In 2023, the Central Bank of Liberia (CBL) raised the policy rate twice in
May and July by 500 basis points cumulatively to 20.0% to rein in inflation. The CBL also
removed the ceiling on the offered amount of CBL bills to help accommodate the growing
oversubscription, absorb the excess liquidity in the banking system, and strengthen its monetary
policy operations. The financial sector remained adequately capitalized with minimum capital
adequacy ratio at 21.2%, well above the floor of 10%. Non-performing loans as share of total
loans also declined to from 16.4% to 11.2%, slightly above the tolerable levels of 10%.
Liberia’s medium-term growth prospects are positive on balance. The economy is expected
to expand by 5.3% in 2024 and average of 5.9% in 2024–26. Medium-term growth prospects
require maintaining macroeconomic stability, prudent fiscal consolidation, and implementation
of ongoing structural reforms in key enabling sectors. Tightening monetary policy will ease
inflationary pressures and bring inflation down to single digits in the medium term. The fiscal
deficit is projected to moderate to an average of 3.3% of GDP in the medium term as the
government strengthens domestic resource mobilization and expenditure controls. The current-
account deficit is expected to remain elevated in the medium term due to a surge in aggregate
demand driven by foreign direct investment (FDI) related imports.
Last Updated: Apr 11, 2024
