Liberia: Selected Issues

This Selected Issues paper focuses on Liberia’s public infrastructure scaling up challenges and opportunities. A multipronged approach can accelerate growth and mitigate the potential negative impact of investment scaling-up on debt sustainability. Liberia's persistent public infrastructure gaps significantly impede private sector development and economic growth. Scaling up public investment is critical for raising growth potential and accelerating income convergence with the Sub-Saharan African average. Model simulations, such as the Debt, Investment, Growth and Natural Resources framework, suggest that a well-calibrated increase in public investment over the five-year Agriculture, Roads, Rule of Law, Education, Sanitation and Tourism Agenda for Inclusive Development period, coupled with balanced financing and key structural reforms, can enhance growth while maintaining debt sustainability. Achieving these outcomes requires a multipronged approach focused on domestic revenue mobilization, attracting external financing, and improving investment efficiency. Strengthening tax collection and moderately adjusting tax rates will provide sustainable resources. Crucially, structural reforms, guided by the 2025 Public Investment Management Assessments recommendations, are necessary to improve public investment management, including project appraisal, selection, and oversight. Modernizing public procurement through the rollout of e-procurement will also enhance transparency, reduce corruption risks, and ensure the cost-effective allocation of scarce resources to productive projects.