Liberia

Extractive sector drives investment

In 2025, growth is expected to pick up, driven by a sharp increase in mining activity and a recovery in the agricultural sector. Gold continues to drive export growth, thanks to higher market prices and a revival in artisanal mining. Mining is also benefiting from large-scale investment in iron ore. As part of the second phase of ArcelorMittal's expansion project, the completion of an iron ore concentration plant should increase production from 4 to 20 million tonnes a year by the end of 2025. The project also includes the expansion of the existing rail and port infrastructure, including the modernisation of the railway line connecting the Yekepa mine to the port of Buchanan, which will help improve export capacity. The construction sector will benefit from this initiative, as well as from the work on the Liberty Corridor, a project aimed at connecting Guinea's mining regions to Liberia's Didia port through a rail link, and introducing improvements to road and electrical networks. Furthermore, geological studies funded by China confirmed in January 2025 the existence of deposits of uranium, lithium, cobalt, manganese, and neodymium. According to the country's president, these findings are expected to attract nearly USD 3 billion in investment, with the government already in negotiations with multinational companies and local investors.

The recovery of agricultural activities (28.5% of GDP in 2024) is expected to remain on track, assuming favourable weather conditions. The 2024-2029 National Sector Development Plan, with a total cost of USD 718 million, should stimulate production of the main commodities, rice and cassava, thereby reducing dependence on imports, and encourage the development of cash crops such as cocoa, coffee, coconut, and rubber. In addition, the government is expected to maintain investments in rural development, with support from the African Development Bank and the World Bank. That said, the country has been experiencing unstable electricity supply since early 2025. Its main provider, the Compagnie Ivoirienne d'Électricité, has reduced distribution due to maintenance and production problems. Flash power outages and higher food import prices led to inflationary pressures in the first half of 2025. However, these are expected to ease in the second half of the year, thanks to restrictive monetary policy (the key rate was raised to 17.25% in the second quarter of 2025), a relatively stable exchange rate and moderation in energy import prices, which will benefit private consumption.

Budget consolidation supported by the IMF

In 2025, fiscal policy will continue the consolidation trajectory initiated in 2024, following IMF recommendations, and at the same time roll out an ambitious budget of USD 880 million (+19% compared to the revised 2024 budget). Expenditures are being reduced by eliminating ineffective tax incentives for the agricultural and mining sectors and by intensifying audits in the public sector. However, spending is being weighed down by significant recurring expenses related to civil servant salaries, goods and services, as well as debt servicing (USD 153 million, up 43%). At the same time, the government will seek to optimise domestic revenue collection, notably through the gradual transition of the goods and services tax, which increased from 10% to 12% in April 2025, towards a 15% VAT in 2026. These revenues will be bolstered by higher royalties from mining activities, the reintroduction of an excise tax on gasoline, and improved road fund collection. Fiscal efforts will support the advancement of the government's ARREST agenda (Agriculture, Roads, Rule of Law, Education, Sanitation, Tourism), as the additional revenues generated will primarily be allocated to capital investments, mainly for road construction.

Despite these efforts, the public deficit will increase, mainly on back of a return to trend following the delay in approving the 2024 supplementary budget and the withdrawal of US aid, which accounted for nearly EUR 107 million out of a total budget of approximately EUR 825 million. It will be financed by loans from the Central Bank (20%) and development partners (80%), notably under a programme including an agreement financed by an Extended Credit Facility signed with the IMF in September 2024 for USD 209 million, which is to be disbursed gradually out to 2027. Following the failure of the 2023 agreement, this will help restore the confidence of international financial institutions and bilateral donors. The current account deficit will continue to decline in 2025, thanks to exports boosted by mining activity (gold, iron ore, and diamonds) and a modest recovery in rubber and palm oil production. Furthermore, this positive impact will be partially offset by spending on equipment and services related to the construction phase of the mining projects. The secondary income surplus will benefit from significant expatriate remittances, although the effect will be mitigated by the withdrawal of US aid. The deficit will be financed by FDI, mainly in the extractive sector, and by multilateral concessional loans. This will provide some relief to foreign exchange reserves, which declined to 1.9 months of imports in September 2024.

End to legislative stalemate

Joseph Boakai (81), the current President, was sworn in on 22 January 2024, after securing a narrow victory in the second round of the November 2023 presidential election (50.9% of the vote). The parliamentary elections that followed failed to award a majority to the presidential party, the Unity Party (UP). Until the end of 2024, however, the government had the support of the Movement for Democracy and Reconstruction (MDR) and other small parties to legislate on political matters (creation of a special court for war crimes and economic crimes) and mining matters. However, the House of Representatives came to a standstill between November 2024 and May 2025. A self-proclaimed majority faction, including the UP, challenged the authority of the Speaker of the Assembly, Jonathan F. Koffa, from the Congress for Democratic Change (CDC) party, which is close to former President Weah, accusing him of poor governance, corruption and conflict of interest. Without securing the 49 votes out of 73 required (47 votes) for impeachment, the bloc nevertheless elected Richard Koon (UP) to replace him. The Constitutional Court, to which Koffa referred the matter, confirmed the legality of his office and ruled that any attempt to replace him was illegal. Despite the decision, President Boakai said he was prepared to work with the majority faction, thereby effectively isolating Koffa, who eventually resigned on 12 May after denouncing the executive's refusal to respect the court's ruling. The following day, the House of Representatives confirmed Richard Koon's election by 43 votes to 73. While this appointment marks a return to constitutional order, the new Speaker of the Assembly faces criticism over his lack of independence from the Executive, given his close ties to the President.

The country's ties with foreign partners should strengthen. In March 2025, Côte d'Ivoire and Liberia expressed their intention to develop a joint border protection policy and reactivate the Mano River Union, which includes Liberia, Sierra Leone, Guinea, and Côte d'Ivoire. In addition, relations with the US, a long-standing partner, will be uncertain, and the country may be encouraged to strengthen ties with other players, such as China, to fill the void left by the withdrawal of US aid. At the end of March 2025, China and Liberia signed an economic and technical cooperation agreement.

Last updated:May 2025