World Bank’s 2024 Liberia Economic Update Urges Shift Toward Inclusive Jobs

The World Bank has released the sixth edition of its annual Liberia Economic Update, titled "From Stabilization to Inclusion – Pathways to Resilient Growth and Productive Jobs." This latest report offers an in-depth analysis of Liberia's macroeconomic landscape, with a particular focus on the private sector's potential to deliver sustainable, quality employment and reduce poverty across the country.

The report highlights Liberia's fragile but recovering economy, noting progress in macroeconomic stabilization while warning of persistent structural weaknesses in the labor market and private enterprise sector that continue to limit inclusive growth. It sets forth a strategic agenda aimed at shifting the country's growth model from one reliant on stabilization to one centered on inclusive, job-rich development.

Economic Context: Stabilization Progress but Inclusion Lags

Liberia has made commendable strides in maintaining macroeconomic stability through fiscal and monetary reforms, improved public financial management, and tighter control of inflation. However, the report warns that these gains are fragile and could be undermined if employment challenges and private sector weaknesses are not addressed head-on.

According to Georgia Wallen, World Bank Country Manager for Liberia:

"Achieving sustained and inclusive growth requires confronting Liberia's employment challenges and maintaining macroeconomic stability. Structural weaknesses in the labor market and the private sector continue to constrain the country's growth potential. Tackling these barriers is essential not only for reducing poverty, but also for sustaining macroeconomic gains through a stronger domestic tax base, greater resilience to external shocks, and enhanced social cohesion."

Private Sector: Underpowered and Overconcentrated

The Liberian private sector remains dominated by informal, micro-sized enterprises, many of which operate in a few key urban hubs with limited capacity for scaling or job creation. The report identifies:

• Low productivity and underinvestment in key value chains

• Lack of access to finance and technology for small businesses

• Excessive regulatory burdens and weak infrastructure

• Limited industrial diversification and sectoral overconcentration

These issues have led to a stagnant private sector that fails to absorb the growing labor force, leaving large segments of the population—particularly youth and women—underemployed or working in vulnerable, low-paying jobs.

Four-Pillar Strategy for Inclusive Employment Growth

To transform Liberia's employment landscape and unlock the private sector's potential, the report recommends a four-pronged strategy:

1. Stimulate Labor Demand

   • Targeted investment in agro-processing, light manufacturing, and construction

   • Development of value chains with high job-creation potential, especially in rural areas

2. Enable Firm Growth

   • Access to finance, business development services, and digital tools for MSMEs

   • Regulatory reforms to simplify business registration and operations

   • Strengthening of public-private dialogue mechanisms

3. Modernize the Business Environment

   • Improve legal frameworks, reduce bureaucratic hurdles

   • Enhance coordination among economic agencies and ministries

   • Promote public-private partnerships (PPPs) for infrastructure and industrial development

4. Expand Labor Force Participation

   • Invest in skills development, especially for youth and women

   • Create targeted employment incentives for firms that offer formal wage jobs

   • Increase focus on technical and vocational education and training (TVET)

Aligning Employment Policy with Spatial and Industrial Priorities

The report also emphasizes the importance of spatial planning in employment policy. Much of Liberia's economic activity remains concentrated in Monrovia and surrounding regions, while interior counties lag behind. To reduce regional disparities, the report recommends:

• Strengthening infrastructure and market access in underserved areas

• Prioritizing development of economic corridors and special agro-industrial zones

• Aligning industrial and labor policies with value-chain potential in different regions

These efforts, combined with a long-term focus on human capital development, will be crucial to address both supply- and demand-side constraints in Liberia's labor market.

Need for Education, Human Capital, and Incentives

Gweh Gaye Tarwo, the World Bank's Liberia Country Economist and lead author of the report, stressed that:

"Transformation of the country's employment status should be complemented by long-term investments in education and human capital, improved market access for local firms, and targeted incentives for firms that offer wage employment."

Such interventions, he noted, will not only stimulate domestic job creation, but also build resilience against future shocks, including climate risks and global economic fluctuations.

Path Forward: Policy Coherence and Implementation

The World Bank urges the Liberian government and stakeholders to focus on policy coherence, inter-agency coordination, and effective implementation of structural reforms. Special attention should be paid to:

• Improving data systems to inform labor and investment policy

• Supporting entrepreneurship with a focus on youth and women-led enterprises

• Strengthening institutions that regulate labor, finance, and enterprise development

With the right policy mix and investment focus, Liberia can shift from a stabilization-centric growth model to a broad-based, inclusive development path that delivers productive jobs and reduces inequality.

From Fragility to Inclusive Prosperity

Liberia's Sixth Economic Update marks a crucial inflection point. While macroeconomic stabilization has laid a foundation, inclusive job creation and private sector transformation are now essential to achieve lasting prosperity. With coordinated investments, strategic reforms, and inclusive policies, Liberia can build a more resilient economy that empowers its citizens, especially youth and marginalized groups, and positions the country for long-term sustainable growth.