Liberia plans to widen tax base and seek concessional loans to address the impact of the United States government aid freeze that threatens to further weaken the tiny West Africa nation’s economy.
On account of President’s Donald Trump’s “stop work” directive, the country stands to lose about $201.2 million, which the United States Agency for International Development disbursed as at Jan.1 for this year alone, according to a 14-page document Oracle News Daily has seen.
USAID is second largest contributor of aid to Liberia, spending $961.8 million between 2014 and 2024. The agency currently runs 105 active projects focusing on health, education, agriculture and energy amongst others.
“Aid freeze will slow Liberia’s post COVID19 economic recovery and development, as the country stands the risk of losing funds for improving health and education,” it said.
“The agricultural sector will suffer, leading to a decrease in food security, increased food prices and limited opportunities for farmers to improve their livelihoods. USAID programs often provide grants, training, and financial support to small businesses. Their suspension will lead to less access to capital and growth opportunities, further reducing income for workers.”
In Jan. lawmakers and President Joseph Boakai approved $880 million for the 12-month spending period end Dec. 31. The authorities are anticipating revenue to dip through direct taxation on employees’ personal income taxes, procurements of goods and services, real property taxes, and indirectly through services sector.
