Posted on January 2, 2024

As Liberia celebrates 20 years of peace, the nation is taking steps to improve both infrastructure and systems for attracting foreign investment and business.

After the historic election of Ellen Johnson Sirleaf as the first democratically elected female president in Africa, Liberia embarked on a journey to reconstruct the institutions that had been devastated by a prolonged civil war. Despite facing subsequent challenges such as the 2010 Ebola epidemic, the ongoing Covid-19 pandemic, and the current repercussions of Russia's invasion of Ukraine, Liberia's economy has demonstrated resilience and sustained growth. In 2022, prudent fiscal policies successfully contained inflation at 7.6 percent. Additionally, with assistance from international partners, the country's market systems are gradually advancing towards a more favorable business environment, concurrently enhancing conditions for domestic revenue collection. 

The dual currency system, where both Liberian dollars and United States Dollars are freely interchangeable, facilitates business transactions in Liberia. Furthermore, the 2010 Liberia Investment Act is designed to safeguard investors against unjust expropriation and enables the unrestricted repatriation of profits.

The maximum annual tax on profits is capped at 25 percent, aligning Liberia with other member states of the Economic Community of West African States (ECOWAS). Additionally, concession agreements offer opportunities for tax breaks extending up to 5 years. Special incentive regimes have been established for key sectors such as agriculture, manufacturing, transportation, ICT, tourism, waste management, and health, encompassing tax deductions and exemptions from income tax. As a low-income country, Liberia also benefits from duty breaks for exports to both the EU and the US.

 While positive political developments have occurred, the public sector grapples with significant human and institutional capacity constraints. Concurrently, limitations in the private sector pose challenges to public service delivery. Governance reforms have enhanced institutional performance, yet the implementation of these reforms remains a challenge. This includes addressing issues such as civil service reform, anti-corruption measures, harmonization, and the decentralization of services.