Summary
- Liberia's economy is improving, but the African Development Bank says the country now needs US$2.83 billion a year to finance its development goals through 2030.
- Economists are split on whether that target is realistic, with both agreeing stronger governance is critical to attracting investment.
- The report urges tax reform and more private investment, warning that corruption, weak infrastructure and policy uncertainty continue to deter investors.
Liberia's economy has shown real signs of improvement. Inflation has come down. The government has narrowed its budget deficit. Growth has picked up.
But according to a new report from the African Development Bank, stability by itself won't be enough to carry Liberia forward. The report is the bank's own assessment, not an independent or government-verified analysis, and it argues that Liberia's next challenge is raising money, not just managing what it already has.
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The report estimates Liberia needs about US$2.83 billion a year in development financing through 2030, equal to two-thirds of the country's total 2024 economic output. Without that money, the report contends, Liberia's progress could stall before it takes hold.
Discover moreCampaigns & ElectionsNewspapersOpinion & Commentary Not all economists agree that Liberia can realistically mobilize the amount of financing the African Development Bank says it needs.
Adolphus D. Dopoh, an economist and lecturer at the Adventist University of West Africa and the African Methodist Episcopal Zion University, said the Bank's estimate is not a realistic annual financing target under current conditions.
"Given Liberia's relatively small economy, limited domestic revenue, high debt burden, and continued reliance on donor funding and a handful of major investors, mobilizing US$2.83 billion every year would be extremely challenging without significant improvements in governance, the investment climate, and institutional capacity," Dopoh said.
Dopoh agreed that financing has become one of Liberia's biggest development challenges but argued that it cannot be separated from governance. He said the country has recorded steady economic growth in recent years, yet that growth has failed to produce broad improvements in living standards because weak governance, poor domestic revenue collection, and institutional constraints continue to limit both investment and the effective use of public resources.
"Financing and governance are equally important," he said.
Rufus S. Berry II, an economic policy analyst, took a different view. He said the AfDB's estimate is realistic, even if it is highly ambitious given Liberia's current financing capacity.
"The estimate reflects the scale of investment Liberia needs to achieve its development goals," Berry said. "But attracting more financing alone will not transform the economy. The bigger challenge is building the institutions and governance systems needed to turn that financing into sustainable economic transformation."
Fragile Economic Growth, Better Economic Management but Lack of Jobs
According to the Bank's economic data, real growth of the economy (represented by Gross Domestic Product or GDP) rose from 4.0 percent in 2024 to 4.6 percent in 2025. Inflation (price rises) dropped from 8.2 percent in 2024 to around 6 percent in 2025. The budget deficit (the difference between what the government spends and what it earns) narrowed from roughly 7 percent of GDP in 2023 to 2.2 percent in 2024 to 1.8 percent in 2025. Public debt (how much the government owes) sits at 56.8 percent of GDP, down slightly from 57.2 percent the year before.
The report argues growth remains fragile because it rests on mining and farming, with manufacturing and tourism still underdeveloped. It also argues that widespread informal employment, which it estimates at nearly 80 percent of Liberian workers, limits the government's ability to collect taxes and limits workers' access to credit.
The Report's Central Claim: Liberia Needs More Taxes and Private Investment
The report's core argument is that Liberia's biggest obstacle is no longer growth but money. Roads, electricity, schools, hospitals and digital infrastructure, it contends, cost far more than the government currently raises.
To close that gap, the report recommends Liberia overhaul its tax system, which it describes as narrow, weakly enforced and full of exemptions. It also recommends new digital tools for tax collection and more efficient management of public spending. The government has struggled to implement a digital identity system that would make this possible.
On debt, the report argues Liberia is not currently at high risk of default but warns that rising costs to service its public debt could crowd out spending on health, education and infrastructure - primarily roads, electricity and internet. Development experts say spending on these three areas is essential to boosting growth in the economy and creating the jobs and entrepreneurial opportunities that the economy needs, especially as the youth population explodes.
It recommends that future borrowing go toward projects that generate measurable economic returns, rather than covering budget gaps.
The Ministry of Finance and Development Planning said it would respond to questions about the report but had not provided comments by press time.
The Report Argues for More Private Money but Investors Are Still Nervous
The report argues that government money alone cannot close Liberia's financing gap, and that private investment needs to fill most of it. It points to public-private partnerships, foreign direct investment, pension funds and money sent home by Liberians abroad as potential sources.
For investors, the report identifies possible opportunities in mining, farming, renewable energy, transportation, digital services and infrastructure. It also names risks it says could deter investment: weak governance, infrastructure gaps, unpredictable regulation and Liberia's continued dependence on commodity exports.
During the Weah administration potential investors cited the unpredictability of government interference, the placement of high-ranking government officials on US corruption sanctions lists, and the lack of rule of law as major impediments to investment. In 2023 a would-be American investor told FrontPage Africa/New Narratives the executive's interference with the Legislature-approved concession of Liberia Traffic Management and the encroachment of illegal miners onto concession sights were reasons he would withhold investment. Investors said that the Boakai government will need to forcefully address these if more investors - especially those from the United States and Europe - are to feel confident investing in the country.
The report describes Liberia's banking sector as healthier and better capitalized than in past years, with digital financial services expanding. At the same time, it says small and medium-sized businesses still face high interest rates and limited access to loans, limiting their ability to borrow to grow. The Bank recommends closing that gap through better payment systems, stronger credit records and updated financial regulation.
Dopoh said the risks identified in the AfDB report largely reflect what investors have been saying for years.
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"The Bank is right to highlight governance weaknesses, political uncertainty, and weak contract enforcement because those are issues investors consistently raise," he said. "But when you speak directly with investors, they also point to corruption, unreliable electricity, poor infrastructure, policy inconsistency, and slow government decision-making as the biggest obstacles to doing business in Liberia. Until those structural problems are addressed, attracting the scale of private investment the country needs will remain difficult."
Report Urges Tax Reform, Budget Discipline and Investment in New Industries
The report closes with recommendations aimed at two audiences: the Liberian government and the international institutions that fund it.
For President Joseph Boakai's government, the report recommends collecting more tax revenue, strengthening governance, diversifying beyond mining and farming into new areas included tourism, and maintaining disciplined budgets, alongside continued investment in education, health care and infrastructure.
For the African Development Bank, the World Bank, the International Monetary Fund and other donors, the report argues that traditional lending is no longer sufficient and recommends shifting toward tools that draw private investors in alongside public money, including blended finance, loan guarantees and technical assistance.
The report concludes that Liberia has reached a steadier period of economic recovery, but that whether this lasts depends on how the country finances what comes next. Growth alone, the report says, will not carry Liberia forward. Finding the money to sustain it will.
This story was produced in collaboration with New Narratives as part of the Investigating Liberia Project. Funding was provided by the Swedish International Development Cooperation Agency. The funders had no say in the story's content.
