Liberia's Economic Growth Fails to Reduce Poverty

The World Bank's seventh Liberia Economic Update has revealed a concerning trend in the country's economic development. Despite a growth rate of 5.1% in 2025, up from 4% the previous year, extreme poverty has increased from 34.6% in 2024 to 36.1% in 2025. This means that more Liberians are being left behind as the economy grows. The report, titled "Beyond Growth: Addressing Structural Constraints to Job-Rich Growth in Liberia," was launched in Monrovia this week.

The World Bank Country Manager for Liberia, Georgia Wallen, acknowledged the progress made by the government, but emphasized that the real test is translating growth into opportunities and improvements in people's lives. The report highlights that the fiscal deficit narrowed to 2.1% of gross domestic product (GDP), public debt eased from 56.4% to 55.1% of GDP, and inflation was held in check. These achievements are significant, especially considering the country's history of high inflation and unstable economy.

However, the report also reveals that the growth is not being felt by the majority of Liberians. Mining grew by 17%, but this sector employs few people. Agriculture, which is the main source of livelihood for most Liberians, grew by only 2.6%, while manufacturing contracted. The informal sector accounts for 78% of workers, and nearly 9 out of 10 businesses are one-person operations. This means that many Liberians are not benefiting from the economic growth.

The government's own choices have also contributed to the problem. Capital spending fell from 8.5% to 5.7% of GDP, which translates to a drop from $406 million to $297 million. This reduction in investment in infrastructure, such as roads, power lines, and farm-to-market links, will hinder job creation in the future. At the same time, interest payments on debt rose from $49 million to $87 million, taking away from funds that could be used for development.

The report also highlights the lack of transparency and accountability in state-owned enterprises (SOEs). Over six years, financial information was submitted for only 83 of 276 possible entity-years, and 25 of the 46 entities operating through 2025 had never filed a financial return. The Liberia Electricity Corporation (LEC) was owed $34 million, mostly by government institutions themselves. This lack of accountability and transparency is a major concern.

The World Bank has set out four priorities for the government: protect macroeconomic stability, remove constraints on private investment and diversification, strengthen oversight of SOEs, and steer investment toward livelihoods. To achieve these goals, the government needs to restore capital spending, invest in agriculture, and make the new State-Owned Enterprises Authority effective. The people of Liberia will judge the government by whether their lives improve, not just by the growth rate.

The poverty figures in the report are model-based estimates, as Liberia's last official household survey dates back to 2016. The government needs to fund a new national household survey to get accurate data and make informed policy decisions. The administration's Agenda for Inclusive Development promised Liberians a rescue, but at midterm, people are asking where the rescue is. The answer must be tangible and show up in people's lives, not just in growth figures.

Key points

• The World Bank report highlights the need for the government to translate economic growth into opportunities and improvements in people's lives.
• The report also emphasizes the importance of protecting macroeconomic stability, removing constraints on private investment and diversification, and strengthening oversight of state-owned enterprises.
• The government needs to restore capital spending, invest in agriculture, and make the new State-Owned Enterprises Authority effective to achieve these goals.