World Bank Calls for Comprehensive Reforms to Foster Liberia’s Economic Growth
The World Bank’s recent report urges Liberia to implement significant reforms to escape its reliance on natural resources and promote sustainable economic growth. The report outlines key transformations required to diversify the economy, improve public services, and foster private investment. These reforms could enhance productivity and lead Liberia toward lower middle-income status by 2040 while increasing GDP per capita by 2050.
The World Bank has launched the Liberia Country Economic Memorandum, titled “Escaping the Natural Resource Trap: Pathways to Sustainable Growth and Economic Diversification in Liberia,” on March 11, 2025. This comprehensive report addresses Liberia’s economic challenges and emphasizes the need for substantial reforms to enhance resilience against external shocks, thereby aligning with the ARREST Agenda for Inclusive Development (AAID).
Liberia is entrenched in a “natural resource trap,” where reliance on a narrow, commodity-based development strategy has perpetuated cycles of stagnation. Weak human capital, limited wealth accumulation, and low productivity hinder the nation’s growth prospects. The report suggests that under current conditions, Liberia’s path to middle-income status by 2030 is bleak, predicting modest real per capita GDP growth that would delay reaching the US$1,000 threshold until 2050.
“Institutional and policy reforms are essential to modernize the public sector and provide Liberia with the institutions needed to lead the transformation,” declared Georgia Wallen, World Bank Liberia Country Manager. Reforms must focus on overhauling the business climate to increase private investment; improving public services in education and health; and enhancing infrastructure in power, telecoms, and roads to elevate human capital.
The report advocates for five key transformations aimed at laying the groundwork for long-term development. These include diversifying the economy away from mining toward sectors that meet urban labor demands, recognizing the private sector’s role in job creation, and implementing essential policy reforms to modernize public governance.
Moreover, the report notes that with ambitious reforms, Liberia could substantially enhance its economic outcomes and governance structures. An effective reform program could potentially double productivity growth in the non-mining sector and significantly improve public health and education metrics. Increasing investment ratios could further elevate real GDP growth and help Liberia achieve lower middle-income status by 2040, with per capita GDP projected to reach US$2,000 by 2050.
In conclusion, the World Bank emphasizes the urgent need for significant institutional and policy reforms in Liberia to escape the natural resource trap. By implementing these changes, particularly in diversifying the economy, improving public services, and promoting private sector growth, Liberia can enhance its economic prospects. The suggested transformations could lead to robust growth, employment creation, and ultimately a reduction in poverty, facilitating Liberia’s progression toward lower middle-income status by 2040.
Original Source: www.miragenews.com
