-World Bank Report Reveals
By Jerromie S. Walters
Monrovia, Liberia – A new World Bank report reveals that while Liberia’s macroeconomic health showed notable improvement in 2024, these gains have failed to address a deepening employment crisis, leaving the majority of the workforce trapped in informal and vulnerable work. The sixth edition of the Liberia Economic Update acknowledges a strengthened fiscal position, with the deficit narrowing sharply from 7.1% to 2.0% of GDP, and inflation falling to 8.3%.
However, this stabilization has not translated into better livelihoods for most Liberians, with poverty remaining persistently high and formal job creation stagnant. Beneath the surface of fiscal consolidation lies a troubling reality: the growth is not creating quality jobs. The report highlights that a staggering 78% of the workforce is in vulnerable employment, marked by informality and a lack of social security benefits, underscoring a critical disconnect between macroeconomic policy and everyday economic reality.
This jobs challenge stems from a private sector structurally incapable of large-scale, formal employment. A recent National Establishment Census found that 86% of Liberian firms are micro-sized, and a striking 89% are single-person operations, offering little potential for scalable job creation. The problem is compounded by widespread informality, with 60% of firms not registered with the tax authority.
This limits the government’s revenue base and leaves workers without protections, creating a cycle of low productivity and persistent poverty. While services like trade and finance drove growth, the industrial sector contracted sharply in 2024, with mining and manufacturing growth falling significantly. This decline signals weak investment and underscores the economy’s over-reliance on a few primary exports, such as gold and rubber.
Furthermore, a shift in inflation patterns points to deep-seated inefficiencies. Although overall inflation eased, non-food inflation—driven by costs for housing, healthcare, and education—rose in the latter part of the year, indicating that price pressures are now domestically sourced and rooted in structural weaknesses within the services sector.
The financial sector also shows warning signs. While banks remain liquid, the ratio of non-performing loans (NPLs) surged to 21.5%, reflecting growing stress on borrowers and a concentration of credit in personal and service-sector loans rather than productive sectors like agriculture or manufacturing. The World Bank identifies Liberia’s core challenge as the stark contrast between a growing labor force and an economy that has not undergone the necessary structural transformation to absorb it.
Job creation is concentrated in low-productivity, informal services, with formal firm creation “extremely low” by global standards. To unlock the country’s employment potential, the report proposes a four-pronged strategy. This includes stimulating labor demand through investment in agro-processing and light manufacturing, and enabling the expansion of productive firms through regulatory and financial support.
The strategy also calls for comprehensive business environment reforms, including legal modernization and stronger public-private partnerships. Simultaneously, it emphasizes the need to expand labor market participation for youth and women through skills development and entrepreneurship programs.
The medium-term outlook remains cautiously optimistic, with GDP growth projected to average 5.2% from 2025-2027, supported by agriculture and mining. However, this growth is vulnerable to fiscal slippage, commodity price shocks, and weak reform implementation. Ultimately, the report concludes that translating macroeconomic stability into inclusive growth requires confronting the employment crisis head-on. The prevalence of informal, micro-sized firms is a fundamental constraint on Liberia’s development potential.
Sustaining the recent fiscal and inflation gains depends on creating a stronger domestic tax base, which is impossible without a vibrant formal private sector. Greater formal employment would also build resilience to external shocks and enhance social cohesion.
The World Bank stresses that aligning industrial and labor policies with spatial development priorities is essential to drive inclusive job creation and reduce the regional disparities that currently limit opportunities for many Liberians. The path forward requires a direct and sustained focus on transforming the structure of the economy itself.
Heightening the proposals:
In her opening address, World Bank Liberia Country Manager Georgia Wallen confirmed a period of significant economic improvement for Liberia, noting marked progress in both fiscal management and the external sector. To deliver the ‘more and better jobs’ that Liberia needs, the World Bank proposes a comprehensive four-strategy approach. The first strategy involves stimulating labor demand by strategically focusing on high-employment sectors such as agro-processing and light manufacturing.
The second calls for enabling firm growth through essential financial and regulatory reforms designed to help businesses, particularly SMEs, access capital and expand. The third strategy focuses on modernizing the overall business environment and strengthening coordination between the public and private sectors to attract investment. Finally, the fourth pillar aims to expand labor force participation through targeted skills development and specific interventions focused on empowering youth and women.
Ms. Wallen stressed that a multi-stakeholder approach is absolutely crucial for achieving these objectives, noting that no single entity can solve the challenge alone. She further revealed that the World Bank Group’s partnership with Liberia over the next five years will intensively focus on building the foundations for this job-rich growth, a commitment that will be formally anchored in a new Country Partnership Framework scheduled for launch next month.
