54 AFRICAN COUNTRIES

With a relatively stable political environment, Liberia’s strong post-war economic recovery continued in 2008; but the difficult international environment (Global Financial Crisis) towards the end of 2008 and for most of 2009 created substantial challenges for Liberia’s fledgling economy. Despite the challenges, growth -- although substantially lower than the level projected before the crisis -- is estimated to be positive in 2009. The Government’s macroeconomic framework projects GDP growth to average 7.7 percent per annum for the 2010-2012 period down from the average of 14.3 percent per annum projected prior to the global economic slowdown, driven largely by new investments in key sectors including mining, agriculture, and infrastructure. The recent global crisis has affected the country’s near-term outlook and highlighted its economic fragility. However, Liberia’s medium-to-long-term prospects are good and the government recognizes that a stable macroeconomic environment will be critical to the achievement of rapid, inclusive and sustainable growth and is committed to sound economic management towards that end. The country is expected to reach HIPC completion point June 2010.

Sector % age Contribution to GDP(2007) Agriculture,livestock forestry,fishing and hunting  67.80% Mining and quarrying 7.20% Energy 0.8% Construction 3.10% Transport trade and communication 12.40% Financial and business services 8.60%

Agriculture and Forestry

The agriculture sector continues to be one of the strongest pillars of the economy. Prior to the civil conflict, in 1987 this sector contributed to about 37.2% of the GDP and provided employment for about 75% of the labor force. It also contributed to about 25% of the country's export earnings basically from rubber and logs as the major commodities. The agricultural sector today second only to the mining industry of predominantly iron ore has boomeranged to becoming the leading contributor to the national economy in the post-conflict setting. Total agricultural output in 2006 accounted for 67.8% of the GDP as compared to 37.2 % in 1987, official statistics shows.

The leading commodities which make an impact in this sector are rubber and logs, though the sector comprises other cash crops like cocoa, coffee and oil - palm farms scattered across the countryside.

Mining

Liberia has been suffering by civil war for many years and as a result of this foreign investment has decreased. The main mineral products are gold, diamonds and iron ore. Artisanal workings accounts for 98% of gold and diamonds produced. There are thought to be between 20,000 and 30,000 artisanal miners in Liberia. The government is currently drafting a new Mineral Development Policy and Mining Code aimed at attracting foreign investment.

Liberia is largely unexplored but it has been shown that the country possesses a wide variety of minerals primarily for gold and diamonds. Other majorly found minerals include beryl, tin, columbite-tantalite, phosphates, zinc, copper, lead, rare earth minerals, nickel, molybdenum, beach sand (zircon, rutile, ilmenite, and monazite), bauxite, kyanite, chromite, uranium and silica sands. All are characteristically associated with Precambrian/Proterozoic rocks which underlie most of the country.

There are proven reserves of some 800million tons of iron ore in Liberia with content of 35-65%, while there has been a discovery of deposits amounting to an estimated one billion tons of high-grade ore.Deposits on the northern border with Guinea are among the richest in this part of Africa. The most interesting factor, from a commercial point of view, is iron ore is never a hundred percent pure, but the contaminants in the ore in the north are quite easy to remove, thus increasing the value of the ore.

The iron ore deposits in Liberia are in two sites: the Bong range in the Central West of the country and the Yekepa iron ore that is north of Mount Nimba. Four mines operated by Swedish, American and German multi-million dollar corporations shut down intermittently due primarily to a slump in the world market prices for the commodity and partly to a civil conflict that disrupted normal activities. Studies indicate that re-starting the old mines or operating new ones require infusion of sizable investment capital. Several countries are said to be eyeing this sector.

There are at least three concessions doing gold and diamond mining particularly in the west and southeast of the country, although the two commodities are also mined in small-scale operations. The production estimates are a bit difficult to compute due to smuggling of the portable gem but, official records show that  diamond earned 84million USD in export revenue in 1988, while gold pr

oduction was said to be between 40 to 45 grams per month in the mid eighties.

The government has passed a new mining and mineral law, regulating the industry and providing incentives for investors wanting to do large scale, mechanized mining of the minerals. The disparity between licensed and unlicensed miners is high, with many of them doing illicit alluvial mining. This trade is spurred by the increasing number of diamond brokers in areas where mining is going on and the cities willing to buy the minerals.

Tourism

Perhaps one of the most untapped sectors in Liberia has been the area of tourism, in spite of the fact that tourist attractions sprawl across the country. The country can boast of scenes like the Sapo National Park, the country's only national park, in the southeast, that provides the trappings of a picturesque natural tropical rain forest with unique species of flora and fauna endemic to Liberia.

The park once provided a 'Walden Pond' environment that attracted tourists as well as researchers from Europe, America and Asia. Tourism companies arranged game hunting in the reserves, boat riding and fishing on the river within the park as well as photography and watching of the wildlife in their natural habitat.

Liberia has a coastal belt of 350 miles along the Atlantic Ocean offers some of the best locations for beach resorts with a background canopy of greenery and clean and perfect scenes for sunbathing, swimming and outdoor relaxation. The Kpatawee Waterfalls in Central Liberia or Lake Piso, which connects to the Atlantic Ocean in western Grand Cape Mount County all exudes the complexities, beauty and serenity of mother nature, generating a recurrent love nature every time one visits there.

Liberian rivers, mountains, islands and cultural villages bring the tourist face-to-face with the cultural, traditional and natural heritage of a country so under-explored in terms of the wonders and endowments of nature.

The potential for tourism in Liberia is enormous and would also be a very big economic booster.

Manufacturing

Few years back manufacturing has been dominated by the iron ore and rubber semi-processing work. Notwithstanding, smaller industries produced consumer goods such as foodstuffs and beverages as well as clothing, cement, basic industrial chemicals, furniture and wood fixtures, soap, cigarettes and paint. During this period in the early 1980s, this sector accounted for about 10% of the GDP, but declined to about 7.6% by the end of the decade of the eighties. The decline was partly due to socio-political uncertainty and the recession caused by steep escalation in the costs of imported material upon which the manufacturing sector heavily depended. The small size of the domestic market inhibited speedy growth, but the country served as a regional production base for several commodities, particularly with the Mano River Union economic grouping of Liberia, Guinea and Sierra Leone, until the events of unsavory political instability.

Also affecting the local manufacturing industries were the low value-added in the production process and in terms of its input/output relationship, a strong dependence on semi-finished imported inputs.

The government highlights in its investment plan the utilization of local raw materials to obtain finished products. But the manufacturing sector still shows signs of potential, constrained mainly by the lack of finance. The virtual absence of credit flows to the private sector, in general, and especially to small-scale manufacturing entrepreneurs, may not be so much attributable to their inability to repay, but to their inability to provide required collateral, according to a Central Bank of Liberia report.

It may also be attributable to the banks incapacity to manage the risks and costs of such transactions, the report states.

For Further Reference

African Economic Outlook

Liberia's Country Profile - BBC News

The World Bank

Budget 2009-10