By Catherine K Conteh
MONROVIA, March 11 (LINA) – A new World Bank report has emphasized the need for institutional and policy reforms to drive sustainable economic growth and development in Liberia.
The Liberia Country Economic Memorandum, titled, “Escaping the Trap: Pathways to Sustainable Growth and Economic Diversification in Liberia,” presents a comprehensive analysis of Liberia’s economic outlook and the challenges hindering its long-term prosperity.
The report highlights Liberia’s vulnerability to external shocks, largely due to its dependence on a commodity-based economic model.
This “natural resource trap”, according to the report, has led to cycles of stagnation and recovery, preventing sustained growth.
Without major reforms, the report warns, Liberia’s real per capita GDP will grow only modestly, delaying its transition to middle-income status until around 2050.
“Institutional and policy reforms are essential to modernize the public sector and provide Liberia with the institutions needed to lead the transformation,” said Georgia Wallen, World Bank Liberia Country Manager.
She emphasized that aligning with the ARREST Agenda for Inclusive Development (AAID) requires systemic changes to improve the business climate, attract private investment, and enhance job creation.
Additionally, the report states that public services in education and health must be strengthened, while infrastructure investments in power, roads, and digitalization should be scaled up.
The report identifies five major economic shifts necessary to achieve long-term development.
First, Liberia must reduce its reliance on the mining sector by diversifying its economy to better align with labor market demands and urbanization trends.
Second, the country needs to transition from a state-centric economic model to one where the private sector drives investment and job creation.
Third, public sector modernization is crucial, requiring deep-seated policy and institutional reforms to improve governance and service delivery.
Fourth, investing in human capital is essential, which includes extending the expected years of schooling from four to ten, improving education quality, reducing stunting, and increasing adult survival rates. Lastly, Liberia must increase both private and public investments, raising them to 18 percent and 12 percent of GDP, respectively, to enhance productivity and economic expansion.
With an ambitious reform program, the report indicated that Liberia could double annual productivity growth in the non-mining sector, achieve lower middle-income status before 2040, and potentially reach a per capita GDP of US$2,000 by 2050.
The report underscores that the time for action is now urging policymakers to implement credible reforms to unlock the country’s full economic potential.
