Liberia is one of the poorest countries in the world. The unemployment rate is estimated to be approximately 85%. Two years ago the country’s nominal GDP per capital was $226, one of the lowest in the world. Since World War I the Liberian economy has depended on foreign investment, foreign aid, maritime registry and export of its endowed natural resources such as diamond, rubber, timber, iron ore and gold.
Direct foreign investment in Liberia accelerated following the ascension of Ellen Johnson-Sirleaf to the presidency. Liberian has signed several multi-billion dollar concession agreements with iron ore and palm oil companies including BHP Billiton, ArcelorMittal and Sime Darby. The government has begun work on its off-shore oil exploration. It divided up its off-shores into blocks and auctioned exploration licenses. About 13 blocks offshore water blocks were demarcated in 2011 and plans are in the works to auction off licenses. Anadarko, Woodside Petroleum, Chevron and Respsol are among license recipients so far.
Despite the promising outlook for economic development in Liberia in light of international goodwill towards Liberian following the war which has resulted to pumping of billions of dollars into Liberia for development, the high rate of corruption, poor infrastructures, high cost of transportation, lack of adequate transportation system, high illiteracy rate, lower rate of Liberian participation in the economy, law forbidding dual citizenship, inconsistent application of the law and high crime rate remain the key road blocks for economic growth in Liberia.
The agriculture sector is an important contributor to the economy. More than seventy percent of the population depends on it for their livelihood. The rubber industry is an area where in the past enormous progress was made. Currently, rubber accounts for about 90% of Liberia’s export. Rubber grows well in this wet region and there is a potential to substantially increase Liberia’s quota in the world. The same can be said of palm, cocoa, coffee, rice, cassava and vegetable production.
Rice and cassava are the main staples of Liberians and yet, no advancement has been made in cultivating those important resources. Rice producers still rely on the primitive practices their ancestors relied on for thousands of years. Producers use Cutlass for brushing, ax for cutting down trees that are big for cutlass, fire to clear the farm of leaves, branches and logs, hoe to till the land, and knife to harvest rice. Each stage of the farming process requires a great physical force. As a result most rice farms are small and are meant for the consumption of the family. More often, farmers run out of food before the next harvest season. Hence, Liberia is the only country among its neighbors that is unable to feed itself. The fact that Liberia is not able to feed itself is a major failure of successive governments. The Liberian government has never put into place an effective system to empower farmers to engage in productive farming. High rate of illiteracy, poor road networks, primitive agriculture tools, poor food value chains, lack of storage facilities, lack of credit, lack of modern equipment, little or no heath care facilities and primitive belief system are some of the factors that hamper agriculture programs.
Other natural resources that are very important to the economy are timber, gold, iron ore and diamond. Despite the abundance of these resources, Liberia still remains one the poorest country in the world because of corruptions and poor government policies.
Liberia is blessed with natural resources. Liberia has had some of the high quality iron ore reserves in the world. From 1960s to the beginning of the war in 1989, iron ore was the number 1 export. Iron ore production came to a halt when the war started. Efforts are been made to increase production again.
Rubber was the second highest export in prewar Liberia. Now it is number 1. Firestone which owns a large plantation in Liberia is fully functioning. Other rubber plantations companies and small scale farmers have become active in tapping and producing rubber. Unfortunately, many small farmers are using unprofessional techniques in tapping their trees to induce more latex production, thereby killing the trees. This practice is called Halakai (my spelling) and is widespread.
The third prewar export was timber. It became number 1 export under the Charles Taylor’s administration. Liberia has some of the high quality timber species in the world. Because of its low population density, Liberia has more forest than its neighbors. In addition to these primary exports, Liberia exports diamond, gold, palm oil, cocoa and coffee.