Liberia Economic Structure

 Liberia’s economic structure consists of a large agricultural sector and an underdeveloped industrial sector. The country has also witnessed the emergence of the services sector since the restoration of democracy in 1997. The low GDP growth rate of the country can largely be attributed to excessive dependenc on agricultural production and low industrial output.[br]

 Liberia’s economic structure consists of a large agricultural sector and an underdeveloped industrial sector. The country has also witnessed the emergence of the services sector since the restoration of democracy in 1997. The low GDP growth rate of the country can largely be attributed to excessive dependenc on agricultural production and low industrial output.[br]

Liberia Economic Structure: GDP Composition

Liberia’s economic structure is highly dependent on agricultural productivity. Agriculture contributes approximately 77% of the country’s GDP and employs almost 70% of the total working population. The major crops include rubber, coffee, cocoa, sugarcane, rice and timber. The underdeveloped industrial sector employs 8% of the labor force and accounts for 5.4% of the GDP. Major industries include rubber processing, timber and diamond. Service sector employs 22% of the working population and contributes 17.7% to the national production.

Liberia Economic Structure: Business Climate

Liberia’s economic structure is still suffering from the aftereffects of the military regime in the 1980s and the subsequent civil war. Before the outbreak of the civil war, the country had considerable foreign investment in the rubber industry and oil sector. However, most of the investors fled following the political instability during the late 1980s and 1990s. After the restoration of democracy in the country, the government has taken strategic measures to encourage foreign investors. The UN ban on the export of diamond and timber was removed in the year 2007. The country has also signed a strategic deal with steel giant Mittal for exclusive rights on the export of iron ore.

 

However, by 2009, the country was still dependent on foreign support. Lack of infrastructure and widespread corruption remain the major impediments to economic growth.[br]

 

Being a member the Economic Community for West African States (ECOWAS), Liberia has implemented a common external tariff. The country has also laid out a plan to gradually eliminate trade barriers on products originating from the partnering countries. Liberia’s exports to EU countries are eligible for duty-free access under the ‘Everything But Arms’ initiative.

 

According to the international ‘Doing Business’ index, Liberia ranks 170 out of 178 countries. The country ranks low due to cumbersome regulations, government inefficiency and lack of infrastructure.