Liberia Economy

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Situated on the west coast of Africa, Liberia is home to approximately 3.9 million people (2009 estimates). It ranks 103rd in terms of total land area available. The country shares borders with Sierra Leone, Guinea and Côte d'Ivoire. Liberia has a significant coastline along the Atlantic Ocean and experiences an equatorial climate. Liberia’s economy is dependent on the coastal region, which is home to a majority of the population. Inland areas are highly forested and scarcely populated. Monrovia is the capital city and the Liberian dollar is the official currency. Liberia’s economy relies on the export of oil, diamonds and cocoa.

Liberia Economy: Introduction

Traditionally, the Liberian economy was one of the most prosperous economies in the African continent. This was particularly due to its close trade and cultural relations with the US. However, the military coup of 1980 changed the entire scenario. It was followed by years of unrest, civil war and government mismanagement. Internal instability forced businesses to shut down in Liberia.

 

With the re-establishment of peace and democracy in 2006, the nation’s economy is on the road to progress. Owing to huge mineral reserves and a favourable climate, the country attracts significant foreign direct investment. According to the 2009 estimates, the country has an annual GDP purchasing power parity of US$1.627 billion. 

 

Liberia Economy: Major Statistics

Here are some major statistics related to the Liberian economy:

 

Labour force

1.372 million

Unemployment rate

85% (2003 est.)

Inflation rate

11.2%

Labour engaged in agriculture

70%

Current account balance

-$224 million (2007)

Exports

$1.197 billion (2006)

Imports

$7.143 billion (2006)

Foreign exchange reserve

$885 million (2009 est.)

External debt

$3.2 billion (2005 est.)

 

After peace restoration, the Liberian government has pushed economic and fiscal policy reforms targeted at attracting investment in infrastructure and the petrochemical sectors. Trade restrictions on the timer and diamond industry have also been lifted. The government is also trying to curb corruption to create a favourable environment for business.