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Select Economic and Financial Indicators 2014 2015 2016 2017e 2018f
Real GDP (% change) 0.7 0.0 -1.6 2.6 4.0
GDP (USD bn) 2.0 2.0 2.1 2.1 2.2
Inflation (average) 9.9 7.7 8.8 12.1 9.9
Fiscal Balance (% GDP) -1.8 -10.2 -5.3 -7.9 -7.3
Broad Money (% change, end period) 2.1 1.7 -4.5 -1.8 11.3
Population (mn) 4.4 4.5 4.6 4.7 4.9
Exports (USD bn) 0.8 0.7 0.6 0.6 0.6
Imports (USD bn) 2.5 2.5 2.1 2.0 1.9
Current Account Balance (% GDP) -26.9 -35.2 -24.7 -26.7 -31.3
FX Reserves (USD bn, end period) 0.4 0.5 0.5 0.5 0.5
Exchange Rate (average) 73.01 80.02 85.23 112.39 143.46
Sources: IMF, World Bank, UN, Intracen, Bloomberg, Ecobank Research

Economic outlook

Economic outlook

Real GDP: Despite a slower-than-expected recovery from the profound effects of the Ebola crisis so far, economic growth is expected to accelerate in 2018. The pace of growth will remain below pre-Ebola crisis levels, but will be driven by a rebound in commodity prices (particularly iron ore), and increased economic activity (especially in the mining sector) as the post-Ebola economic recovery continues.

Inflation: Inflationary pressures will remain high amid the post-Ebola rebound in growth, higher commodity prices (particularly oil prices), and the pass-through effects of LRD weakening (given Liberia’s significant import dependency). However, base effects are expected to help slow inflation down to high single-digit figures.

Fiscal Balance: The deficit should narrow somewhat from last year, amid an expected pick-up in economic activity following the conclusion to a prolonged presidential election in 2017. This will also be aided by a USD20mn grant from the World Bank to support Liberia’s budget (approved in January 2018). Nonetheless, pressure will be sustained by the government’s commitment to increased health spending in the post-Ebola environment, higher security costs due to the withdrawal of UNMIL (United Nations Mission in Liberia) which is scheduled to be completed in March 2018, and a general decline in budget support from foreign donors (given the winding down of post-Ebola grants).

Current account: The current account is likely to widen in 2018, amid a recovery in oil prices and a decline in Ebola- and UNMIL-related grants.

Risks

Risks to the outlook are linked to: (i) a commodity price shock, which could raise inflationary pressures and depress private consumption; (ii) slow job creation in the post-Ebola period and the low absorption by the economy of the large number of young people; (iii) constraints to private sector development due to limited access to financial services; (iv) a fall in shipping service revenues if global trade stagnates; (v) uncertainty over policy continuity following the inauguration of a new government administration in January 2018; (vi) an ineffective handover from UNMIL to local security forces; and (vii) significant dollarisation of the economy, which neutralises monetary policy and limits the role of the government’s economic management.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange Rate Structure

Regime Managed Float
Target No official target but de facto anchored to the USD
Type of intervention Via spot market
Convertible currency? No
Market participants n/a
Source: Bloomberg, IMF, and Ecobank Research

FX

FX Products Spot Forwards Non-deliverable Forwards Options Swaps
On offer Yes No No No No
Daily trading volume (USD mn) n/a n/a
Average trade size (USD mn) n/a
Average spread n/a
Trading hours 08:30-15:00
Settlement cycle T+2
FX Market Structure The CBL, donors, and the corporate sector are all large suppliers of FX in Liberia. However, USD inflows fluctuate significantly.
Non-resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary Market Treasury bills Treasury notes Treasury bonds Central Bank bills OMOs
Issuer Government Central bank
End use Government financing n/a
Maturity structure 91- to 182-days
Coupon Zero
Coupon payments n/a
Secondary Market
Daily trading volume Limited trading n/a
Average trade size Limited trading
Settlement cycle n/a

Ecobank local affiliate contact details:
Ecobank Liberia, Randall and Ashmun Streets, 1000 Monrovia
Tel: +231 886 74 76 93
Source: Bloomberg, IMF, and Ecobank Research

FI primary market information

FI primary market information

Liberia Debt 2014 2015 2016 2017e 2018f
Government debt (% GDP) 33.2 39.5 45.0 50.8 56.1
    Sub-Sahara average 44.5 52.6 56.1 55.6 55.8
External debt (official creditors, % GDP) 17.9 25.9 32.3 38.3 42.7
    Sub-Sahara average 25.5 30.2 31.9 32.9 33.2
External public debt stock (USD bn) 0.4 0.5 0.7 0.8 0.9
    Share of total sub-Sahara debt (%) 0.1 0.2 0.2 0.2 0.3
Source: IMF; Ecobank Research

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Liberia was formerly a middle-ranking producer of iron ore, but production has slumped by 80% since 2014, owing to the combined impacts of falling iron ore prices, financial difficulties in the mining companies and the Ebola outbreak. In 2016 just 2.4mn tonnes of iron ore were exported. The country also produces small volumes of gold from artisanal mines, with 6 tonnes exported in 2016, much of which originates from the New Liberty Gold Mine in the west of the country. Liberia also produces small quantities of diamonds, with output of 104,450 carats in 2016.

Liberia has no known oil or gas reserves. However, ExxonMobil has carried out exploration in Liberia’s offshore and in 2016 drilled the Mesurado-1 well, which did not encounter any hydrocarbons. African Petroleum, a previously active participant in Liberia’s exploration industry, relinquished its two blocks in 2016. Liberia consumed 360,000 tonnes of refined products in 2016, all of which were imported. Diesel is the main fuel used for private and public power generations and accounts for 52% of the country’s refined product consumption.

Soft commodity production

Liberia is Africa’s third largest producer of Natural Rubber (NR), after Côte d’Ivoire and Nigeria, with estimated output of 75,400 tonnes in 2016, all of which is exported. Although palm oil output remains low at around 45,000 tonnes, this could surge in the future following large-scale investment in plantations by South-East Asian palm oil companies. Liberia is a micro producer of cocoa, with estimated output of 4,000 tonnes in 2016/17, although exports can fluctuate in line with the volume of smuggled beans entering Liberia from Côte d’Ivoire. Liberia produced an estimated 170,000 tonnes of milled rice in 2016, but this fell short of domestic demand, with the balance made up by imports.

Trade Flows

Imports

Liberia’s official import data is unreliable, reflecting both the country’s role as a flag of convenience and the high volume of unrecorded informal flows. According to official data, Liberia’s imports totalled US$9.6bn in 2016. Of this amount, US$1.8bn were classified as ‘unspecified commodities’, comprising 18.9% of official flows. The single largest import is ships, worth US$6.1bn in 2016, most of which are for foreign traders who use Liberia as a flag of convenience. Liberia is reliant on imports of petroleum products, worth US$364mn in 2016, most of which come from China and Greece. Liberia is also dependent on imports of machinery, vehicles, electronics and industrial raw materials (together worth US$534mn in 2016), reflecting the weakly developed manufacturing sector. Liberia also imports large volumes of rice and meat, worth US$78mn and US$37mn in 2016, respectively.

Exports

Liberia’s exports totalled US$1bn in 2016. Since 2015, re-exports of ships have been Liberia’s most valuable export owing to the country’s popularity as a flag of convenience. Worth US$256mn in 2016, most of the re-exported ships went to Poland, Germany and Greece. Gold (worth US$230mn in 2016) has eclipsed Liberia’s traditional export, Natural Rubber, exports of which reached US$107mn in 2016, equivalent of 6.5% of Africa’s exports of the commodity. Most of the gold was exported to Switzerland and the UAE, with rubber mostly going to the USA and Canada. Liberia also exported US$33mn worth of wood and US$105mn of raw cocoa beans in 2016, a large proportion of which included smuggled volumes from neighbouring countries.

  • Flag
  • Population
    4,853,516
  • Area
    111,369 km2
  • Capital
    Monrovia
  • Largest city
    Monrovia
  • Official language
    English
  • Major languages
    Liberian English (Creole)
  • Currency
    Liberian Dollar (LRD)

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