Summary of Pillar II: Revitalizing the Economy

The economy of Liberia today is a shell of its past – relic of an economy shattered by years of devastation and civil unrest. Gross Domestic Product (GDP) is currently one-eighth of the pre-war levels, as productive sectors such as agriculture and forestry, mining, manufacturing and construction collapsed, along with social and economic infrastructure in the war years. Liberia’s debt-to-export ratio now exceeds 3,000 per cent with an overhanging burden of external and domestic debts. The dominance of the economy by an informal sector characterized by low productivity and lack of innovation is a consequence of a weakened economic management system.

According to one estimate, unemployment in the formal sector stands at a staggering 80 per cent. High unemployment, primarily amongst youths, undermines poverty reduction and significantly contributes to security concerns. The challenge ahead is how to resuscitate the economy, create significant job prospects that could make an impact quickly, rebuild infrastructure and the various economic sectors (agriculture, fisheries, mining, forestry, wood processing and manufacturing) and accelerate the pace of economic growth as the foundation for poverty reduction and sustained development.

Achieving these objectives will require a robust economic policy with a strong emphasis on a stable microeconomic environment, a monetary and exchange rate policy to ensure price stability, and a prudent fiscal policy. Other policy goals include improving the management of state enterprises, revitalizing agriculture, reviving mining and forestry and improving the management and use of natural resources. Furthermore, governmental strategy will focus on enabling the recovery and development of the private sector through several policy measures including: facilitating support in the informal sector; improving energy supply and stability; providing access to finance; reforming land ownership and tenure systems; lowering/rationalizing the corporate tax rate; reforming the investment code; modernizing laws and regulations for the telecommunication sector; and reforming and reducing administrative and regulatory practices that hinder economic activities and investments.

A key measure will be to support the informal sector, now a dominant part of the economy and where a majority of women and the poor earn their livelihoods. Support in the form of productivity-enhancing training, skills upgrading and programs to facilitate increased access to credit for the sector will be undertaken. The objective is to enhance the productivity of the poor and raise their incomes. These efforts will be implemented in an environment that favors the market and provides a leading role for the private sector in the economy. In the short to medium term, the focus is on significant job creation and employment. These are few of the things outlined under the strategic interventions under pillar two (Revitalizing the Economy) of the Lift Liberia agenda.