Liberia

Politics:

• Analysis

  Liberia politics: Quick View - The president reshuffles her cabinet

  Event

  The president, Ellen Johnson Sirleaf, announced a number of changes to her cabinet on March 11th.

  Analysis

  The changes were not far-reaching enough to satisfy those who have criticised the president for her perceived inaction in tackling corruption and ineffectiveness among government officials. The only minister to be removed altogether was the minister of commerce, Miatta Beyslow, who has long been viewed as ineffective. She was replaced by her former deputy, Axel Addy, with three new deputies also being appointed as part of efforts to strengthen the capacity of this ministry.

  However, the education minister, Etmonia Tarpeh, kept her job despite a weak reputation, although three of her deputies have been replaced. A replacement was announced for the country's solicitor-general, Michael Wilkins Wrights, who resigned in January after failing to secure convictions in a number of landmark corruption cases. Betty Lamin Blamo, a former deputy minister in the Ministry of Lands, Mines and Energy, has been appointed deputy minister of justice.

  In her live radio broadcast, the president claimed that the reshuffle, expected since October 2012, was intended to re-energise the government, with the appointment and promotion of young people being a particular priority. She added that achieving a good ethnic and gender balance was another important consideration, and that more changes will be made.

  The reaction to the reshuffle suggests that she failed to go far enough in removing individuals deemed either corrupt or ineffective in their jobs. Critics complained that the recycling of some individuals with dubious records suggests that the president is prioritising loyalty at the expense of effectiveness. The retention of the agriculture minister, Florence Chenoweth, despite the abuse of Private Use Permits in the timber sector, is of particular concern to some activists. Although further changes have yet to be announced, they are unlikely to amount to a radical shake-up.

  March 15, 2013

• Background

  Liberia: Key figures

  Ellen Johnson-Sirleaf

  The president, Mrs Johnson-Sirleaf, is a former UN official and distinguished politician, who came second to Charles Taylor in the 1997 presidential election. She is a strongly reform-minded leader, who enjoys growing domestic popularity and is able to command considerable support both regionally and internationally.

  Charles Taylor

  Liberia's controversial former president and creator of the former ruling party, the National Patriotic Party (NPP). His heavy involvement in political skulduggery and murky business deals throughout the subregion made him an influential figure far beyond Liberia's borders and resulted in his eventual arrest and extradition to Sierra Leone to stand trial for war crimes.

  George Weah

  A popular and heroic figure, given his status as one of the most successful African footballers in Europe and his bankrolling of the national football team. His celebrity made him a frontrunner in the 2005 presidential election, but after losing he declined an offer to join Mrs Johnson-Sirleaf's cabinet. He remains leader of the Congress for Democratic Change (CDC), the largest party in parliament.

  Charles Brumskine

  A former senior NPP politician, he is now the leader of the second-largest party in parliament, the Liberty Party. However, he and his party still have a relatively small support base and are attempting to raise their profile by becoming more critical of the Johnson-Sirleaf regime, particularly on issues such as tackling corruption.

  Gyudeh Bryant

  A former chairman of the National Transitional Government of Liberia (NTGL) and a successful Monrovian businessman, Mr Bryant became notorious for overseeing a transitional regime that was highly corrupt, disappointing many Liberians who wished to see an end to the corruption and cronyism that had characterised the Taylor years.

  The judiciary

  Judicial power is nominally vested in the Supreme Court and its subordinate courts (statutory and customary), in accordance with standards enacted by the legislature. However, Liberia's judicial system has been in a poor state since the end of the 14-year civil war in 2003, as it lacks basic resources and skilled personnel. This has led to delayed or abandoned court cases, overcrowded jails, many incidences of mob justice and rising levels of crime. Nevertheless, in recent years the rebuilding and restructuring of the system has started.

  The legislature

  The new government that took power in January 2006 re-established the executive and legislative branches of government as outlined in the 1986 constitution, so that the country now has a 30-seat upper house, a 64-seat lower house and a president and vice-president. Parliamentary seats are allocated to political parties on a proportional representation basis, although members of parliament are elected on a constituency basis; the president is directly elected.

  Media services

  Liberia's public broadcasting service was destroyed during the war. ELTV, a state television broadcaster, has resumed broadcasting as a largely commercial station, and there are two private television stations broadcasting for short periods of the day. There are several FM radio stations based in Monrovia, with limited reach; Star Radio, supported by foreign non-governmental organisations, broadcasts nationwide; and international radio stations, such as the UK's BBC World Service and the US's Voice of America, are widely listened to. There are numerous independent newspapers, and press freedom has greatly improved since the end of the Taylor regime, but journalists are still subject to harassment.

  Democracy index (for methodology, see Appendix)

  The Economist Intelligence Unit's 2008 democracy index ranks Liberia 98th out of 167 countries, in the category of hybrid regimes, indicating that the quality of democracy is compromised by a number of factors. Of greatest concern is the poor functioning of government, which reflects weak administrative capacity and endemic corruption, although the reform process under Ellen Johnson-Sirleaf is expected to see this improve. The weak judiciary and poor security situation impact negatively on the score for civil liberties, which otherwise benefits from citizens being fairly free from repression. A political culture which is supportive of democracy and encourages political participation is emerging, but needs more time to consolidate. Liberia scores well on the electoral process, given the free and fair nature of the 2005 election, notwithstanding the significant help received from the international community in providing voter education and organising and monitoring the election.

  Democracy index
  	Overall score	Overall rank	Electoral process	Government functioning	Political participation	Political culture	Civil liberties	Regime type
  Liberia	5.25	98	7.83	0.79	6.11	5.63	5.88	Hybrid regime
  Overall and component scores are on a scale of 0 to 10; overall rank is out of 167 countries.

  Download text file (csv format)

  July 30, 2008

• Structure

  Liberia: Political structure

  Official name

  Republic of Liberia

  Form of state

  Unitary republic

  Legal system

  Based on 1986 constitution

  National legislature

  National Legislative Assembly (NLA), consisting of the House of Representatives (lower house, 73 seats) and the Senate (upper house, 30 seats)

  National elections

  October 11th 2011 (presidential and legislative elections), followed by a second-round run-off on November 8th 2011 to decide the winner of the presidential election; next national elections due in October 2016

  Head of state

  President; currently Ellen Johnson Sirleaf

  National government

  The head of state and cabinet of ministers

  Main political parties

  Unity Party (UP); Congress for Democratic Change (CDC); Liberty Party (LP); National Union for Democracy and Progress (NUDP); National Democratic Coalition (NDC); National Patriotic Party (NPP); Alliance for Peace and Democracy (APD)

  Key ministers

  President: Ellen Johnson Sirleaf

  Vice-president: Joseph Boakai

  Agriculture: Florence Chenoweth

  Commerce: Miatta Beysolow

  Defence: Brownie Samukai

  Education: Othello Gongar

  Finance: Amara Konneh

  Foreign affairs: Augustine Ngafua

  Health & social welfare: Walter Gweningale

  Information, culture & tourism: Lewis Brown

  Internal affairs: Blamo Nelson

  Justice & attorney-general: Christiana Tah

  Labour: Joseph Sulunteh

  Land, mines & energy: Patrick Sendolo

  National security: Victor Helb

  Public works: Samuel Kofi Woods

  Transport: Lenn Eugene Nagbe

  Central Bank governor

  John Mills Jones

  March 07, 2013

Economy:

• Background

  Liberia: Economic background

  Gross domestic product by sector
  (US$ m unless otherwise indicated; constant 1992 prices)
  	2003	2004	2005	2006	2007(a)
  Agriculture & fisheries	157.8	176.0	184.8	192.3	210.4
  % change	-38.2	15.6	5.0	4.1	9.4
  Forestry	105.5	69.2	71.3	74.1	81.1
  % change	-36.8	-38.2	3.0	3.9	9.4
  Mining & panning	0.6	0.8	0.7	0.7	0.8
  % change	56.7	49.5	-12.5	0.0	14.3
  Manufacturing	24.2	47.8	51.7	55.5	60.7
  % change	-11.8	54.0	8.2	7.4	9.4
  Services	84.0	87.7	93.3	110.5	120.9
  % change	-8.3	13.5	6.4	18.4	9.4
  Total	372.0	381.5	401.8	433.2	473.9
  % change	-31.3	2.6	5.3	7.8	9.4
  (a) Official estimates.
  Sources: IMF, Liberia: Statistical Appendix 2006; Central Bank of Liberia, Annual Report 2007.

  Download text file (csv format)

  Even by the standards of Sub-Saharan Africa, where many of the available economic data are questionable, those on Liberia's economy tend to be particularly uncertain, while data series often contain large gaps. The problem has been exacerbated by the fact that much of the institutional infrastructure and many data on the economy were physically destroyed during the civil war. In addition, with the economy collapsing, more activity has taken place in the unrecorded informal sector. Under the presidency of Charles Taylor (1997-2003) smuggling was also rife, and this continued under the transitional government that followed his departure. However, efforts since the ending of the country's civil war in 2003 to restore Liberia's statistical database have seen an improvement in the data available. The IMF has published current data in its recent Article IV consultation reports, and the Central Bank of Liberia (CBL) is publishing regular updates on macroeconomic developments.

  Liberia's economy has traditionally been based on subsistence agriculture, rubber, mining (mainly of iron ore, but also of gold and diamonds) and timber. Apart from rubber, timber and palm-oil plantations, agriculture is almost entirely limited to subsistence farming (a mixture of food and cash crops, including rice, coffee and cocoa). Mining was a major economic sector before the war and is expected to regain its importance, once work to rehabilitate old mining infrastructure is completed. The services sector remains small, reflecting the devastation of much of the country's infrastructure, which has severely affected all subsectors, including transport, telecommunications, tourism, government services, finance, and electricity and water distribution. However, a rapid recovery is also taking place in this sector, which should see services assuming a far more dominant role.

  July 30, 2008

• Structure

  Liberia: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011a	2012b
  GDP at market prices (L$ bn)	53.8	78.9	92.3	111.6	129.7
  GDP (US$ bn)	0.9	1.2	1.3	1.5	1.8
  Real GDP growth (%)	10.5	13.8	10.9	9.5	8.7
  Consumer price inflation (av; %)	17.5	7.4	7.3	8.5	6.9a
  Population (m)	3.7	3.8	4.0	4.1	4.2a
  Exports of goods fob (US$ m)	249.0	180.0	241.2	422.1b	506.5
  Imports of goods fob (US$ m)	-728.8	-559.0	-719.1	-970.8b	-1067.9
  Current-account balance (US$ m)	-618.2	-541.1	-736.9	-930.1b	-808.6
  Foreign-exchange reserves excl gold (US$ m)	160.9	372.5	466.0	513.3	573.4
  Total external debt (US$ bn)	3.2	1.9	0.4	0.4	0.3
  Debt-service ratio, paid (%)	111.6	13.0	115.3	0.4b	14.5
  Exchange rate (av) L$:US$	63.2	68.3	71.4	72.2	73.4a
  a Actual. b The Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2011	% of total	Components of gross domestic product 2011	% of total
  Agriculture	53.1	Total consumption	140.8
  Industry	10.2	Gross domestic investment	25.0
  Services	36.7	Exports of goods & services	27.5
  		Imports of goods & services	93.3
  Principal exports 2012	US$ m	Principal imports 2012	US$ m
  Rubber	154.6	Machinery & transport equipment	265.4
  Iron ore	117.1	Petroleum products	235.7
  Round logs	48.3	Food & live animals	195.3
  Gold	26.3	Manufactured goods	115.4
  Main destinations of exports 2011a	% of total	Main origins of imports 2011a	% of total
  South Africa	29.9	South Korea	42.4
  US	15.7	China	28.6
  Spain	7.6	Japan	18.9
  Côte d'Ivoire	4.9	Germany	2.5
  a Derived from partners' trade returns.

  Download the numbers in Excel

  Download text file (csv format)

  March 07, 2013

• Outlook

  Liberia: Country outlook

  Liberia: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: Liberia's ruling Unity Party (UP) of the president, Ellen Johnson Sirleaf, fell just short of a majority in the 2011 elections. However, the speakers of the House of Representatives and the Senate are UP members, strengthening its ability to pass legislation. The government will focus on delivering on its pledges through job creation and better service provision. Slow progress will add to the perception of a gap between the rhetoric of the administration and its limited achievements. The mainly young supporters of the opposition Congress for Democratic Change (CDC) will be a potential source of insecurity. There is a large groundswell of young, unemployed men, particularly in Monrovia (the capital). The Economist Intelligence Unit forecasts an average annual real GDP growth of 7.4% in the 2013-14 outlook period, driven by higher agricultural output and investment in the extractive industries. Liberia will run a large current-account deficit because of the heavy UN presence, which accounts for the majority of imports. Trade will increase as higher domestic demand and output offsets weak external demand.

  DOMESTIC POLITICS: Mrs Johnson Sirleaf was re-elected to the presidency in November 2011, but her legitimacy will be undermined by the process by which she came to power. Winston Tubman, the CDC candidate, claimed that there had been irregularities and boycotted the second round of the presidential poll, which will weigh on her mandate. Despite this, election monitors declared the vote to have been free and fair. Mrs Johnson Sirleaf has retained many of the ministers from the previous administration, reflecting the confidence that the election victory has given her. The president and the UP will continue to suffer from corruption allegations. Mrs Johnson Sirleaf has introduced measures to reduce opportunities for the embezzlement of public funds, ostensibly taking a firmer line since her re-election. However, as with her selective record on corruption more broadly, any action taken may serve to reprimand those who are out of favour, while others remain free of censure. The government will come under pressure to promote reconciliation by improving people's daily lives through job creation and service provision. However, the limited progress that Liberia has made in transitional justice will represent an underlying threat to the country's fragile peace. Leymah Gbowee, a joint winner of the 2011 Nobel Peace Prize (along with Mrs Johnson Sirleaf), resigned as head of Liberia's Peace and Reconciliation Commission in October 2012, pointedly criticising the president over allegations of nepotism and a growing divide between rich and poor. These problems have regularly been highlighted by domestic civil society and opposition activists, but Ms Gbowee's comments may have a greater impact in the international arena. In any case, the slow progress in improving living standards will add to the growing perception of a gap between the rhetoric of Mrs Johnson Sirleaf's government and its limited achievements. Our 2012 democracy index ranks Liberia 101st out of 167 countries, a deterioration of three places since the previous rankings, placing it in the "hybrid regime" category. The presence of a peacekeeping force, the UN Mission in Liberia (UNMIL), will remain crucial for the maintenance of stability. The UN plans to reduce the number of troops in Liberia by more than half by 2015, to 3,750. The reduction will bring UNMIL to around 20% of its original size, and will take place in three phases; in the first phase, 1,990 personnel will leave by September 2013. There is no indication at present that this timetable will not be met, but UNMIL forces are unlikely to be withdrawn if Liberia is deemed to be facing any major immediate security threat. The UN is concerned about the capacity of local forces to take over from UNMIL. Although more than 100,000 former combatants have been disarmed, many without an alternative livelihood will be tempted to form or join regional militias, or to take up looting and banditry. An attempted coup by former army personnel remains a risk, although the UN troops would be able to counter such a move.

  INTERNATIONAL RELATIONS: Liberia's relations with the outside world are expected to remain strong, as Mrs Johnson Sirleaf has earned considerable goodwill among donors, creditors and investors. In return, her government is under pressure to improve accountability and transparency significantly. Donors have deemed progress so far to be good, and external funding is rising. Significant technical, financial and military support underlines the close relationship with the US, but Liberia also receives strong support from many other governments, including China, as well as from multilateral institutions. The security situation in the subregion-which is vital to stability, given that porous borders allow insecurity to be exported quickly-is expected to remain precarious. Although the instability in Côte d'Ivoire has subsided, a large number of Ivorian refugees remain in Liberia. There is continued concern over the prolific crossborder movement of arms and mercenaries, particularly given the influence of international drug cartels in the subregion. Forces loyal to the disgraced former Ivorian president, Laurent Gbagbo, have set up training camps in eastern Liberia and mercenaries have been hired to carry out attacks. Nevertheless, we maintain our current forecast that the two countries will remain on good terms.

  POLICY TRENDS: Economic policy will be guided by a US$79m, three-year Extended Credit Facility (ECF) that was approved by the IMF in November 2012. The overall aim of the ECF is to support and safeguard the gains made in Liberia's macroeconomic stability under the current administration, while making deeper inroads into poverty reduction. The country's macroeconomic performance has been strong in recent years; economic growth has been quick, price pressures have been kept under control, a buffer of foreign-exchange reserves has been built up and external debt has been reduced significantly through debt relief. The financing and technical support offered under the ECF will be of use as it scales up infrastructure and social investments. On the spending side, the priorities will be to rebuild key infrastructure (notably to restore the electricity and water supply to Monrovia), to repair roads and bridges, and to upgrade the main ports. Affordable electricity for business and domestic use will be a key target. The problem is low generation; current capacity is only 23 mw, in comparison with pre-war provision of 412 mw and despite estimated hydropower potential of 2,350 mw. Policy will focus on the rehabilitation of the Mount Coffee hydroelectric plant. There will be less of a focus on signing large-scale deals in the extractive industries, as many of the mining concessions have already been signed. The overall legislative agenda appears relatively ambitious, and the government is unlikely to be able to pass all the bills it plans to present. Among them is a bill to create an autonomous Liberia Revenue Authority (taking responsibility for revenue collection away from the Ministry of Finance in an effort to increase the effectiveness of this function) and a proposal to repeal and replace existing local government legislation. Legislation governing the oil sector will also need to be updated given the recent discovery of oil by an Australian company, Africa Petroleum. New oil legislation would improve investor confidence and probably lead to greater international interest in Liberia's oil industry, but we expect long delays to the passage of any new laws. A comprehensive review of the regulatory framework for the timber sector has also been ordered, and the Land Commission will review the land-title deeds on which the widely criticised private use permits-which provided a loophole for logging companies to circumvent sustainability laws-have been based. Such investigations may contribute to further strengthening of the regulatory frameworks that govern the sector. The government's spending power will improve as higher exports boost customs duties and the government returns to borrowing on financial markets-albeit in low amounts. From the end of the civil war in 2003 until 2012 the government had operated a cash-based balanced budget, in line with a policy of strict fiscal discipline, thereby preventing any increase in the public debt. The government has since started to borrow again and donors have begun to offer more concessional financing. Revenue will be helped by investment in the mining sector that will result in higher income from export tariffs, although tax holidays and lag times before profitability will limit revenue in the early years of these projects. On the expenditure front, the president has said that she will focus on the improvement of public services, including the expansion of piped water provision and increased access to health and education, building on improvements made during her first term. Energy policy has been designated a national emergency in order to increase the provision of electricity to business and domestic users, with large-scale investment planned in this area. Public-sector employment will rise rapidly as the government employs more teachers and health workers to implement its programmes in these priority sectors. Roads and other physical infrastructure will also be prioritised, with projects also planned to provide new housing. Reconstruction and development programmes will still be funded and managed largely by donors, whose multimillion-dollar budgets dwarf those of the government. We forecast an average fiscal deficit of 2.8% of GDP in the forecast period, financed mostly by concessional external borrowing.

  ECONOMIC GROWTH: Economic growth over the forecast period will be driven by higher agricultural output, which accounts for more than 60% of GDP, as well as higher production in the mining sector. Earnings from Liberia's main export, rubber, will remain high, helped by strong international prices. Activity in the extractive industries will increase, boosted by substantial investments since the signing of large concessions, notably the US$2.6bn Bong Mines operation. A global steel company, ArcelorMittal, is aiming to increase annual iron ore exports from 4m tonnes in 2012 to 10m-15m tonnes by 2014-15. Gold production will expand, encouraged by high prices owing to the continued global economic uncertainty. Manufacturing growth will be limited by competition from cheaper imports and by unreliable electricity and water supply. Investments in palm oil and timber will start production, albeit at modest initial levels, and forestry activity will gain momentum. Overall, annual real GDP growth is forecast to average 7.4% in 2013-14, slightly slower than the estimated 8.7% growth rate in 2012, which was inflated by a one-off boost from the start-up of iron ore production and a large increase in gold exports. The risk to this forecast is on the downside, as the subdued global outlook could curb demand for exports and limit foreign direct investment. Another offshore oil discovery was announced in February, but the find is insufficient to confirm the commercial viability of Liberia's oil reserves. Even if commercially viable levels are discovered, it will take several years to bring it to market, and our forecast for 2013-14 will thus be unaffected.

  EXTERNAL ACCOUNT: Liberia runs a structural current-account imbalance owing to the large UNMIL presence, which, according to the Fund, accounts for around 50% of imports; this will remain the case during the forecast period. Trade will continue to expand as higher domestic demand and output offset lacklustre external demand and commodity prices. Rubber constitutes the largest share of exports, and commodities will continue to dominate export earnings, which will rise as large mining projects expand production. Imports will increase owing to capital imports for large investment projects. Inflows of transfers will remain high, owing to strong donor funding for infrastructure reconstruction and humanitarian assistance. We forecast a narrowing of the current-account deficit as the rise in export growth outpaces demand for inputs for reconstruction.

  March 06, 2013

View detailed map

Country Briefing

Land area

111,370 sq km

Population

4.2m (IMF, 2012 estimate)

Main town

Monrovia (capital); population 1.1m (2012 estimate)

Climate

Tropical

Weather in Monrovia (altitude 23 metres)

Hottest month, March, 24-32°C; coldest month, July, 22-27°C; driest month, January, 30 mm average rainfall; wettest month, July, 996 mm average rainfall

Language

English (official) and 16 other languages, including the lingua franca "Liberian English" (Creole)

Measures

UK imperial and US systems

Currencies

Liberian dollar (L$) = 100 cents, and US dollar (notes); Liberian coins and notes trade at a large discount against the US dollar, fluctuating according to the security situation and cash shortages

Time

GMT

Public holidays

January 1st; February 11th (Armed Forces Day); March 12th (Decoration Day); March 15th (birthday of J J Roberts, the first Liberian president); Good Friday-Easter Sunday; May 14th (National Unification Day); July 26th (Independence Day); August 24th (Flag Day); November 8th (Thanksgiving Day); November 12th (National Memorial Day); November 29th (birthday of late president William Tubman); December 25th-26th (Christmas)

March 01, 2012