Monrovia — The Liberian economy has demonstrated resilience in 2024, with a projected growth rate of 4.8%, up from 4.6% in 2023. This expansion is underpinned by strong activity in the primary sector, particularly agriculture and fisheries, fueled by increased production of rice, rubber, and cassava, according to the Central Bank of Liberia's (CBL) latest quarterly bulletins.
Despite mixed performances across primary, secondary, and tertiary sectors, the overall economic trajectory remains positive, with a strong foundation for achieving a projected 5.6% growth in 2025. This is expected to be driven by continued investments in electricity coverage, rural road development, and social programs under the government's ARREST Agenda.
Inflation and Monetary Stability
The CBL's interventions have successfully contained inflation within single digits, with rates of 7.4% in the second quarter and 6.8% in the third quarter. Projections for the fourth quarter remain steady at 7.6%. Declining costs in clothing, health, transportation, and education contributed to this moderation.
In a bid to sustain economic stability, the CBL Monetary Policy Committee adjusted the policy rate, reducing it from 20% in early 2024 to 17% by the fourth quarter. These measures have stabilized the Liberian dollar and boosted public trust in the domestic currency, reflected in increased usage in business transactions.
Financial Sector Growth and Stability
Liberia's banking system has shown resilience, with total deposits exceeding L$200 billion and profits after tax reaching L$7 billion by October 2024. Nine commercial banks, alongside various microfinance and fintech institutions, remain operational, highlighting sectoral growth. The CBL also reported a rise in remittance inflows by 14.7% and a narrowing trade deficit, signaling an improving external sector.
Through the Liberia Investment Finance and Trade (LIFT) project, the CBL secured a $6 million credit line from the World Bank to support Micro, Small, and Medium Enterprises (MSMEs). This initiative aims to enhance job creation and private-sector growth, with disbursements beginning in October 2024.
Operational Reforms and Currency Stability
To streamline operations, the CBL reduced personnel costs in September 2024, implementing transparent measures to mitigate the emotional impact of workforce restructuring. As part of ongoing reforms, the Bank has also infused L$32.56 billion of newly printed banknotes into circulation, ensuring liquidity and reducing reliance on outdated currency.
The CBL's commitment to transparency is evident in its response to the General Auditing Commission (GAC) compliance audit, resolving 55% of audit recommendations and drafting policies to address key issues, such as over-the-counter check encashment thresholds.
Challenges and Prospects
Global geopolitical tensions, including the Russia-Ukraine war and the Israel-Hamas crisis, as well as unfavorable commodity price trends, pose risks to Liberia's economic outlook. Additionally, international reserves remain below the benchmark of three months' import coverage, requiring continued focus on rebuilding reserves.
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However, the Bank's proactive policies, including digitization initiatives and reforms to the CBL Act, promise to strengthen financial governance and improve service delivery.
The CBL's efforts in 2024 have significantly contributed to maintaining economic stability and fostering growth in Liberia. By addressing operational inefficiencies, enhancing monetary policies, and supporting private-sector development, the Central Bank remains a cornerstone of Liberia's economic progress. With a strategic plan for 2025-2029 aligned with the national development agenda, the CBL is well-positioned to navigate challenges and capitalize on opportunities in the medium term.
