International Trade in Liberia

News Related to International Trade in Liberia

Business outline for Liberia

Economic Overview

After falling to 4.6% in 2009, due to the global recession, Liberia's economic growth rate has recovered, reaching 6.3% in 2010 and should further accelerate in 2011. The recovery of exports, the good performance of private invastment and a large amount of internatinal aid have been the main growthdrivers.

The main challenges that the country faces are its excessive dependence on the imports of foodstuffs, agricultural vulnerability to harmful insects that destroy crops and the structural fragility of a country in the process of reconstruction. In 2008, the government launched its Poverty Reduction Strategies Program (PRS) for the period beginning on April 2008 until June 2011. The project is crafted of four major pillars: the consolidation of peace and security, the revival of the economy, the reinforcement of government and rule of law and the reconstruction of its infrastructures and basic services. The Liberia Governance and Economic Management Assistance Program (GEMAP) should help the Liberian government to generate and to use its income in a more efficient and transparent way. Having completed the Heavily Indebted Poor Countries Initiative (HIPC), Liberia was able to get rid of its debt and thus improve its financial situation. The government's new strategy focuses on growth, capacity building, financial sector development and investment in infrastructure.

Liberia is still a poor country, with a high unemployment rate and strong social tensions.

FDI in Figures

The inflows of FDIs into Liberia are increasing due to the end of political conflict and the new stability in the country's politics, as well as the lifting of the embargo. This trend should continue. However, investors must deal with some difficulties such as below-average quality infrastructures, heavy bureaucracy, a high level of corruption and unskilled labor. 

Nevertheless, the government attempts to increase the transparency in its procedures in order to attract investors. Several foreign companies have shown an interest for commercial exploitation of the offshore crude oil deposits along Liberia's Atlantic Coast. RIch in natural resources, Liberia represents a still untapped economic potential.

Mining, forestry and agriculture are the sectors that are attracting most of FDI. South Korea, Germany and Singapore are the main investing countries.

Foreign Trade Overview

The country is open to trade. Foreign trade represented more than 200% of the GDP in 2008. Since 2006, the trade policy of the democratically elected government has been focusing more on liberalizing and restructuring the economy. 

Custom duties are not too high. They range from 2.5% to 25%. Although the country is opening more to international trade, a certificate of inspection before shipment is still mandatory. Some factors constrain the development of trade, such as a limited access to credit, a low purchasing power and a lack of infrastructures. 

Liberia's imports have been increasing quickly while exports are decreasing because of the global crisis. As a result of this, the trade deficit has deepened, a trend which should continue despite the recovery of exports.

The main trade partners of Liberia are the countries members of The Association of Southeast Asian Nations (ASEAN),  the European Union and South Korea. Liberia exports rubber, timber, iron, diamonds, cacao and coffee towards India, USA, Poland, Germany and Belgium. It mainly imports fuels, chemical products, machinery, transportation equipment, manufacturing goods and foodstuffs coming from South Korea, Singapore, Japan and China.