Liberia Economy in Dire Straits as UP Alliance Struggles to Shift from Campaign to Governing Mode
Dr. Clarence R. Pearson, Sr.
Chief Executive Officer at Shalom Christian International Foundation, SCIF
If anything, Liberia seems to be in consistent campaign mode whether ruling party or opposition. The country is polarized along political and ethic lines by political leaders who pitch themselves as political saints, and who political campaigns drive a wedge between citizens along rhetorics of “them vs us” and “good vs evil”. Politics for most politicians are more about hate speeches than policy issues. Most times demonizing their political opponents while at the same time making unrealistic promises to the nation.
Meanwhile, the substantive national issues are left unattended, as majority of their time on and off the job is aimed at fending off political retaliatory pressure, or deliberately targeting opponents to keep ahead of the political chicanery. What is interesting though, is that, the ordinary citizens continue to languish in abject poverty as they are used as political pawns and victims. The top 1% recycled political players become millionaires overnight, and at best, use their wealth to perpetuate themselves in power, while giving the impoverished majority barely enough [handouts] to keep them enslaved. Sometimes it seems a futile exercise to try to open the eyes of the impoverished majority, but giving up is not in the DNA of the neo-progressive movement.
The past six years under the CDC administration typified the above scenario, and no less the same now with the last seven months of the UP Alliance. The ARREST Agenda of the UP Alliance is like an unproductive graduate certificate that hangs on the wall without any intentions to yield meaningful outcomes. It appears to be a framework document developed outside the “dreamer’s imagination”. The document lacks visionary and innovation leadership. Understandably, however, it is difficult to own a vision that one didn’t craft, especially when the actual crafters and socioeconomic indemnifiers are ostracized on arrival to the platform of performance for actualization. Former Auditor General and integrity icon John Morlu and veteran revolutionary young political strategist Martin K. N. Kollie are classic examples of the UP Alliance ostracism in action.
In view of the course the UP Recue Alliance is headed, one aspect of the country that is soon to crash is the economy, unless urgent attention is provided. This urgency is propelled by the sharp drop in the price of iron ore, a major source of revenue. Additionally, the growing hardship of the ordinary people who are less likely to have job opportunities anytime soon, will not be able to contribute to an already sluggish economy. Increased poverty will increase the crime rate. Even worse, the rate of college graduations in comparison to available job opportunities is alarming. Also, the youths, one of the prominent pillars of national growth and development are educational deprived simply by the quality of their education, due mostly in part to corrupt politicians with misplaced priorities, who rather legalize their corruption through the national budget, or give blind eye to lucrative autonomous entities who steal state resources under disguise of corporate social responsibility (CSR). All this is in addition to mismanagement of our natural resources. Sadly, in all this, there is a lost generation from the late 1970s to present slowly wasting away. The few who managed or are managing to succeed and mean well for the country are chased away for their honesty. Crooks stand a better chance over honest people. Crooks shine in the political class and are called smarts and heroes, while smarts and true heroes get the least attention.
While we are at it, carrying out political campaigns when we should be governing, the Boakai administration needs to take a good look at the GREAT Project assessment report from the World Bank and pay attention to the challenges, opportunities and recommendations that need their attention, instead of running around playing politics. The report provides a detailed analysis of Liberia's economic landscape for the reporting period of 2022-2023, which comes right on the heels of the administration, highlighting key challenges, opportunities, and recommendations to foster sustainable development and economic growth.
Challenges
1. Economic Vulnerability: Liberia's economy remains highly susceptible to external shocks due to its dependence on a narrow range of exports. In 2022, the primary commodities—rubber, iron ore, and gold—accounted for approximately 80% of export earnings. This heavy reliance makes the economy vulnerable to global price fluctuations and market demand shifts.
2. Infrastructure Deficits: The country continues to suffer from significant infrastructure gaps, particularly in transportation, energy, and telecommunications. As of 2023, only 5% of rural roads were paved, and the electricity access rate was just 26%, one of the lowest in the region. These deficits hamper economic activities and discourage both local and foreign investments.
3. Political Instability and Governance Issues: Persistent political instability and governance challenges, including widespread corruption and a lack of a transparent legal framework, continue to undermine investor confidence. In 2023, Liberia ranked 137th out of 180 countries on the Corruption Perceptions Index, reflecting ongoing issues with governance and rule of law.
4. Human Capital Development: Liberia faces significant challenges in human capital development, with a literacy rate of 48% and a large portion of the workforce lacking vocational skills. These factors constrain economic diversification and productivity, limiting the country's ability to develop new sectors beyond primary commodities.
Opportunities
1. Natural Resources: Liberia possesses vast natural resources, including minerals such as iron ore and gold, as well as fertile agricultural land. If managed effectively, these resources could significantly boost economic growth. For instance, the agricultural sector, which contributed about 34% to the GDP in 2022, has the potential to be a major driver of economic diversification and rural development.
2. Agricultural Potential: With about 40% of Liberia's land suitable for agriculture, there is significant potential for expanding cash crop production and agro-processing industries. Investments in these areas could increase export revenues and reduce the country's reliance on a few primary commodities.
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3. Strategic Location: Liberia's strategic position in West Africa provides opportunities to enhance trade and attract investment. The country's access to the Atlantic Ocean and proximity to key regional markets can be leveraged to foster regional integration and trade partnerships.
4. Renewable Energy: There is considerable potential for developing renewable energy sources, particularly hydroelectric power. Currently, only 4% of the population has access to grid electricity from renewable sources, indicating a significant opportunity to expand this sector and attract investments in energy-intensive industries.
Recommendations
1. Improving Governance: Strengthening governance and institutional frameworks is essential to create a stable environment for investment. Efforts should focus on combating corruption, enhancing the rule of law, and increasing transparency to rebuild investor confidence and promote economic stability.
2. Infrastructure Development: Prioritizing investments in critical infrastructure, such as transportation and energy, is necessary to improve connectivity and reduce operational costs. Developing reliable road networks and expanding electricity access could significantly boost economic activities and attract more investments.
3. Economic Diversification: Reducing economic dependence on a few primary commodities is crucial. This can be achieved by developing other sectors, such as agriculture, manufacturing, and services, which would provide more employment opportunities and contribute to a more resilient economy.
4. Human Capital Investment: Increasing investment in education and vocational training is vital for building a skilled workforce that can support economic diversification. Expanding educational programs and improving access to vocational training will help address skill shortages and enhance productivity.
5. Enhancing Trade and Investment Climate: Reforms to improve the business environment, such as simplifying regulatory procedures, protecting property rights, and ensuring contract enforcement, are necessary to attract both domestic and international investments.
Overall, while Liberia faces significant economic challenges, the country also has numerous opportunities that, if effectively leveraged, could lead to sustained economic growth and improved living standards for its population.
[Image of little boy: Action Against Hunger - used to remind us that we owe it to the next generation to do right by them]
To read the full report, follow link below