By: Sir-George S Tengbeh
𝗜𝗻𝘁𝗿𝗼
Liberia, a country rich in natural resources such as iron ore, rubber, diamonds, and timber, has continued to remain ensnared by abject poverty, corruption, and underdevelopment.
For decades, the mismanagement of public funds by successive governments has fueled a devastating cycle where the elite in power, particularly lawmakers, enrich themselves at the expense of the country’s economic progress.
A glaring example of this can be seen in the 2024/2025 recast fiscal budget that recently passed, a reflection of systemic corruption and socio-economic racketeering.
𝐖𝐡𝐚𝐭 𝐢𝐬 𝐒𝐨𝐜𝐢𝐨-𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐑𝐚𝐜𝐤𝐞𝐭𝐞𝐞𝐫𝐢𝐧𝐠?
While the term is new to the socio-economic discourse in Liberia, I have define the term Socio-Economic Racketeering to refers to the systematic exploitation of a nation’s economic resources by powerful elites, often through corruption, manipulation of public funds, or monopolizing economic opportunities, leaving the broader population impoverished.
In Liberia, lawmakers hoard wealth through inflated salaries and corrupt budget allocations, leaving key public services underfunded.
In contrast, in the U.S., instances of corporate lobbying in sectors like pharmaceuticals or defense sometimes result in policies that favor a few at the expense of broader public welfare, demonstrating a form of socio-economic racketeering in a developed context.
At the core of Liberia’s socio-economic failure is the apparent paradox between its immense wealth in natural resources and the living standards of the majority of its population.
Despite the wealth beneath its soil, Liberia remains one of the poorest countries in the world, plagued by weak institutions, poor infrastructure, and high levels of unemployment. How can a nation so rich be so poor?
This paradox is rooted in Liberia’s history of corruption, particularly by lawmakers and government officials, who often engage in rent-seeking behavior, effectively engaging in racketeering through the nation’s fiscal policies.
A major avenue for this form of socio-economic racketeering is Liberia’s national budget, where public funds are frequently misappropriated and redirected toward personal projects, opaque expenditures, and off-budget allocations.
For example, the 2024 recast budget raised eyebrows due to the alarming allocation of funds to non-transparent, unbudgeted expenditures, including millions for covert operations and various special sessions of lawmakers, among others (FrontPage Africa, 2024).
These practices further deepen Liberia’s poverty crisis by robbing the nation of vital resources that should have been allocated to improving health, education, and public infrastructure.
𝐓𝐡𝐞 𝐅𝐢𝐬𝐜𝐚𝐥 𝐑𝐚𝐜𝐤𝐞𝐭𝐞𝐞𝐫𝐢𝐧𝐠 𝐨𝐟 𝐭𝐡𝐞 𝐋𝐞𝐠𝐢𝐬𝐥𝐚𝐭𝐮𝐫𝐞: 𝐀 𝐂𝐥𝐨𝐬𝐞𝐫 𝐋𝐨𝐨𝐤
The Liberian parliament’s actions surrounding budget decisions have come under increased scrutiny. The approval of a $738.8 million recast national budget in 2024 presents a clear example of budgetary corruption and mismanagement.
Despite objections from some members of parliament and the public, the legislature pushed the budget through, even though the off-budget spending raised numerous red flags (FrontPage Africa, 2024).
For instance, $15 million of government expenditure in 2024 went to unaccounted-for items, including the mysterious allocation of $2.5 million for “covert operations” and additional sums earmarked for funeral costs, religious programs, and special legislative sessions (FrontPage Africa, 2024).
This appropriation not only highlights the legislature’s propensity for funneling public money into non-priority areas but also reveals a gross abuse of power that actively harms Liberia’s socio-economic landscape.
Further evidence of mismanagement can be seen in the government’s negotiations with HPX, a company that agreed to provide $30 million to the Liberian government in exchange for using the Port of Buchanan.
This deal, executed without legislative approval, reflects the deepening trend of fiscal recklessness, where laws governing public financial management are ignored, and the budget process is manipulated to accommodate executive whims (Analyst Liberia, 2024).
The legislature’s apparent inability to hold the executive accountable has led to further erosion of public trust.
𝐓𝐡𝐞 𝐒𝐨𝐜𝐢𝐚𝐥 𝐚𝐧𝐝 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐟 𝐋𝐞𝐠𝐢𝐬𝐥𝐚𝐭𝐢𝐯𝐞 𝐂𝐨𝐫𝐫𝐮𝐩𝐭𝐢𝐨𝐧
The impact of this socio-economic racketeering is most acutely felt by ordinary Liberians, who face increasing poverty, declining public services, and crumbling infrastructure. The recast budget of 2024/2025 also signals worrying economic trends that could further exacerbate these conditions.
While the official narrative claims that the budget is aimed at addressing urgent national priorities, closer examination reveals that much of the additional funding has been channeled towards recurrent expenditures, which skyrocketed to $648 million, nearly 80% of the total budget (Analyst Liberia, 2024).
There is little evidence that this increase is due to new employment or salary adjustments in the public sector. Instead, this massive increase suggests that lawmakers are padding their personal incomes while the majority of Liberians continue to live in destitution.
The consequences of these fiscal policies are stark: increased poverty, unemployment, and social inequality. Liberia’s wealth is being siphoned off to benefit the elite political class, leaving critical sectors like healthcare, education, and infrastructure severely underfunded.
Meanwhile, Liberia continues to lag in critical human development indicators, with high rates of infant mortality, illiteracy, and a lack of access to clean drinking water. However, there are calls for reform.
Speaker of the House, J. Fonati Koffa, has advocated for a comprehensive overhaul of Liberia’s Public Financial Management (PFM) law, aiming to reinstate legislative oversight over the nation’s finances (FrontPage Africa, 2024).
The current PFM law is seen as undermining the legislature’s control, granting excessive power to the executive branch, which has resulted in unchecked spending and misappropriation of funds.
Koffa’s call for reform reflects growing frustrations within certain circles of government, as well as among the general populace, who have long decried the legislature’s failure to act in the public interest. But reform efforts face significant hurdles.
The deeply entrenched system of corruption in Liberia, where lawmakers often benefit personally from the current state of affairs, means that any real change will require a concerted effort by both the government and civil society.
The legislature’s complicity in the executive’s fiscal irresponsibility has left Liberia vulnerable to economic shocks, leading some financial analysts to warn of the potential for future economic collapse if budgetary reform is not enacted (Analyst Liberia, 2024).
The socio-economic racketeering practiced by Liberia’s lawmakers has left the country on the brink of an economic crisis. While Liberia is endowed with immense natural wealth, the failure of its leaders to manage public resources responsibly has left the majority of its people in poverty.
The 2024/2025 budget fiasco is yet another chapter in a long history of fiscal mismanagement, where public funds are diverted to enrich the political elite at the expense of ordinary citizens.
Without significant reform to the budget process and a crackdown on legislative corruption, Liberia will continue to be a country rich in resources but poor in development, where its wealth benefits the few while the many remain impoverished.
𝐑𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬
- FrontPage Africa. (2024). “Liberia: Government’s US$15M Off-Budget Expenditure in Nine Months Raises Eyebrow.” Retrieved from [FrontPageAfricaOnline](https://www.frontpageafricaonline.com).
Analyst Liberia. (2024). “$25M Budget Shortfall Imminent – As AML Deal Remains in Limbo, Govt. Courts HPX.” Retrieved from [AnalystLiberiaOnline](https://www.analystliberiaonline.com).
