Liberia

Extractive sector drives investment

Growth is expected to continue accelerating in 2026. It will continue to be driven by booming mining activity which accounted for 65% of growth over the first three quarters of 2025 and by a rebound in public spending. The mining sector will benefit from sustained gold prices and, above all, from a substantial increase in iron ore output, which began at the end of 2025 (+430% yearonyear in Q3 2025 by volume). The surge is mainly due to the commissioning of the expanded oreconcentration plant operated by ArcelorMittal, the country’s dominant producer, accounting for 89% of national iron output. The company’s investment programme aims to raise annual production to 20 million tonnes by 2026, up from 4 million in 2024. In addition, the US group Ivanhoe Atlantic—currently beginning operations at the Kon Kweni iron mine in Guinea—has announced a USD 1.8 billion investment to upgrade the rail line from Yepeka (an ArcelorMittal site) to the Liberian port of Buchanan from 2026. This corridor, previously operated exclusively by ArcelorMittal, is expected to be opened to competition in 2030 and could position Liberia as a transit hub for Guinean iron ore exports. Last, the signing of an oilexploration agreement with TotalEnergies and the Nigerian company Oranto Petroleum in February 2026 could also strengthen Liberia's energy sector over the medium term.

The agricultural sector – accounting for 23% of GDP and employing 68% of the working population in 2025 – posted strong growth (+4.7%), driven by rice production and the boom in palm oil. However, rubber cultivation, which is the country’s main export crop, slowed in 2025. The sector’s positive momentum is expected to continue in 2026, assuming favourable weather conditions, while difficulties in the rubber industry are likely to persist as prices stabilise. Investment in the agricultural sector will also continue, supported by multilateral institutions and European partners—most notably Germany—through the Heritage investment programme, which plans to inject USD 900 million into Liberian agriculture by 2029.

Inflation fell sharply in the final quarter of 2025, supported by lower imported oil prices, a favourable exchange rate for imports (the Liberian dollar appreciated by 6.6% against the US dollar in 2025), and strong domestic food production, which helped limit import demand. Prices are expected to continue moderating in 2026. Owing to weak monetary-policy transmission associated with dollarisation, monetary policy will remain restrictive; the key rate was 16.25% in February 2026. However, continued easing will support private consumption even though borrowing costs remain particularly high with an average interest rate of 12.4% on USDdenominated loans. The strengthening of the bettercapitalised banking sector will continue, and the nonperforming loan ratio – 12.6% in February 2026 – could fall below the regulatory 10% threshold in 2026.

An increase in public spending supported by multilateral financing

In 2025, increased spending and reduced international aid (-23% in real terms) were offset by higher revenues (+35% between 2023 and 2025). The increase was driven by higher mining royalties (+46% in real terms), modernisation of the tax administration, tighter controls, and the rise in the goods and services tax from 10% to 12%. The primary surplus (i.e., excluding interest) reached 1.4% of GDP. In 2026, the deficit could widen slightly as the budget provides for a sharp increase in public spending (+41% in real terms). On the expenditure side, the 2026 budget includes an ambitious Public Sector Investment Plan (PSIP, 23% of total spending) focused on the road network and energy, two historically underfunded sectors that have hindered investment. Debtservicing costs will rise significantly (+50% in real terms) to USD 230 million, mainly due to domestic creditors, particularly the central bank. Nevertheless, the deficit will be contained by a oneoff USD 200 million payment (16% of the budget) from ArcelorMittal following the agreement to extend its Yekepa mining concession that was signed in January 2026. Tax revenues are also expected to continue rising as the goods and services tax is set to be replaced by a 15% VAT in early 2027. Fiscal space remains substantial, as the taxtoGDP ratio is still low (19% of GDP in 2025). International aid will rebound—particularly thanks to European grants—but will not return to its 2024 level.

The public deficit will be financed through borrowing from the central bank (the main domestic creditor), grants from foreign partners—particularly the World Bank (USD 40 million) and the EU (USD 20 million)—and concessional loans. The external portion accounts for 57% of public debt and is held almost entirely by multilateral partners. Liberia remains committed to its IMF program under a USD 210 million Extended Credit Facility running through 2027. A Resilience and Sustainability Facility (RSF), providing an additional USD 265 million, is currently under negotiation with the IMF.

The current account deficit will narrow in 2026, mainly due to an improvement in the trade balance. Higher exports of gold and iron ore will offset the decline in rubber exports, while low oil and food prices will ease the import bill. Remittances from expatriates (15.4% of GDP in 2024) who live primarily in the US, Ghana and Côte d’Ivoire are expected to further increase. FDI—directed mainly toward the mining sector and covering 1.5 times the sector’s equipment imports—along with grants (USD 185 million) and concessional loans (USD 133 million), will continue to finance most of the deficit. The central bank’s net foreign exchange reserves recovered at the end of 2025 to the equivalent of 2.3 months of imports but remain below the WAEMUrecommended threshold of 3 months.

Fragile presidential majority ends legislative deadlock

President Joseph Nyuma Boakai (81), who was elected after a close race in November 2023, has been governing since 2024 with the support of an informal majority in the House of Representatives and the Senate. The presidential party, the Unity Party (UP), holds only 11 of the 73 seats in the House, but relies on the backing of several small parties and independent lawmakers who play a pivotal role (19 seats). The main opposition party, the Congress for Democratic Change (CDC), founded by former President George Weah (2018–2024), holds 25 seats but lost the support of its key ally, the National Patriotic Party, in March 2025. Senior CDC figures, including House Vice President Thomas Fallah, have also defected to join the presidential camp. Legislative activity resumed after a stalemate between October 2024 and May 2025 provoked by intense parliamentary protests targeting the Speaker of the House, Jonathan F. Koffa (CDC). He eventually resigned and was replaced by Richard Koon (UP), who is known to be close to the president. In 2026, with no elections scheduled, the political environment is expected to remain stable and security risks will be low. Mr. Boakai also enjoys support from certain opposition parties on anticorruption efforts (four related bills were under consideration in February 2026) and on the development of the mining sector.

Liberia’s relations with international partners are expected to continue strengthening. Liberia re-established diplomatic ties with Guinea in October 2025. Although significantly affected by the withdrawal of USAID in 2025, the country is expected to maintain close ties with the US. Two Liberian delegations visited the White House in 2025, notably to discuss mineral supply chains. In December, the US State Department signed a fiveyear, USD 125 million support package for vaccine supply and healthsystem financing. In January 2026, a delegation of US investors announced plans to invest USD 900 million. Liberia’s election to the UN Security Council in June 2025 for a twoyear term was backed by Washington. At the same time, Liberia is expected to continue deepening ties with China to counterbalance the reduction in US aid. In January 2026, the two countries signed a cooperation agreement that included a grant of RMB 100 million (USD 14 million).

Last updated:February 2026