By George S Tengbeh
The International Monetary Fund’s (IMF) 2025 Article IV Consultation and second review of Liberia’s Extended Credit Facility (ECF) presents a picture of progress blended with persistent pain. The numbers appear promising at first glance: growth is rising, fiscal deficits are narrowing, and foreign reserves are improving.
Yet beneath this façade of macroeconomic stability lies a harsher truth: inflation is climbing, donor support is fading, and corruption remains deeply rooted. The IMF’s report, while cautiously optimistic, exposes Liberia’s fragile balancing act between economic discipline and social hardship.
Growth and Economic Resilience: A Cautious Win (Grade: C-)
Liberia’s economy, projected to grow by 4.6 percent in 2025 and 5.4 percent in 2026, outpaces the Sub-Saharan African average of about 3.8 percent. Medium-term prospects stabilize around 5.5 percent, signaling a steady recovery path after years of pandemic disruptions and global shocks.
This is a commendable turnaround, particularly when compared to the IMF’s 2023 assessment, which warned of stagnating growth below 4 percent due to weak productivity and poor infrastructure. The IMF attributes this progress to increased mining activity, especially gold and iron ore, and a modest rebound in agriculture.
However, this growth pattern also exposes Liberia’s chronic vulnerability. Over 70 percent of export revenues come from extractives, meaning that a dip in global commodity prices could swiftly derail the recovery. Agriculture, employing the majority of Liberians, remains under-mechanized, underfunded, and highly exposed to climate shocks.
The government’s ARREST Agenda for Inclusive Development (AAID) aims to diversify growth, yet concrete evidence of sectoral expansion remains limited. In essence, while GDP growth looks good on paper, it remains largely non-inclusive, with little trickle-down effect for rural farmers and low-income households. Liberia’s challenge is to transform this “growth without depth” into jobs, productivity, and genuine prosperity.
Fiscal Discipline and Debt Management: A Strong Positive (Grade: D)
If there’s one area where the government deserves genuine credit, it is fiscal discipline. The IMF highlights a dramatic narrowing of the fiscal deficit, from -7.0 percent of GDP in 2023 to -1.8 percent in 2025. This turnaround reflects improved expenditure control and a commendable effort to raise domestic revenue, which increased to 15.2 percent of GDP in 2025, up from 14.5 percent in 2024. This fiscal tightening has reduced the country’s debt burden.
Total public debt is expected to decline slightly from 57.2 percent of GDP in 2024 to 55.9 percent in 2025. When compared to the 2023 IMF review, which flagged rising debt distress, this marks significant progress. It reflects a government trying to live within its means after years of dependency on grants and concessional loans. Still, these gains are not without risk.
External grants have fallen sharply, from 7.8 percent of GDP in 2024 to 5.1 percent in 2025, exposing fiscal vulnerabilities. The IMF also notes that Liberia missed one key target, avoiding new external arrears, necessitating a waiver. This signals ongoing weaknesses in debt management and foreign exchange planning.
To its credit, the government responded swiftly, rationalizing low-priority spending after the abrupt halt of USAID-backed programs. But rationalization, while prudent on paper, often translates into reduced funding for essential social services, especially education and healthcare. Thus, Liberia’s fiscal prudence, while technically sound, risks social austerity, where macroeconomic stability comes at the expense of the nation’s most vulnerable.
Inflation and Monetary Policy: The Hidden Weakness (Grade: C-)
Inflation remains Liberia’s most stubborn enemy. After dropping to 8.2 percent in 2024, it is expected to rise to 10.7 percent in 2025, reversing earlier gains. For the market woman in Red Light or the taxi driver in Paynesville, this means rising food and transport prices that erode purchasing power and fuel frustration. The IMF’s optimism about fiscal gains is cold comfort when inflation outpaces income growth.
The Central Bank of Liberia (CBL) has taken several steps to stabilize the monetary landscape, boosting reserves from 2.1 months of imports in 2024 to 2.6 months in 2025, restructuring weak banks, and improving its supervisory framework. Yet, reserves remain below the international safety benchmark of three months, and the banking sector continues to be plagued by high non-performing loans and low confidence.
Dollarization, a legacy of Liberia’s post-war economy, continues to undermine effective monetary policy. The IMF’s call for “data-driven” interventions is valid, but without a strong domestic currency base, the Central Bank’s tools remain blunt. In short, Liberia’s inflationary pressures expose the disconnect between macroeconomic control and household realities.
Governance and Corruption: The Old Achilles Heel (Grade: F)
The IMF’s report acknowledges some institutional progress: reforms at the Liberia Anti-Corruption Commission (LACC) and new requirements for public officials to declare assets. These are steps in the right direction.
But as every Liberian knows, corruption is not a paperwork problem; it’s a power problem. Transparency International’s latest index still ranks Liberia among the bottom third of African countries in corruption control, and the IMF’s polite tone cannot mask that fact. Public trust in governance remains low.
From procurement scandals to unexplained budget leaks, corruption continues to erode both efficiency and credibility. The forthcoming governance diagnostic study is a positive sign; it will provide data to guide reforms.
But Liberia’s problem has never been a lack of studies; it has been the lack of political will to enforce accountability. Unless this changes, fiscal reforms and international loans will continue to leak through the cracks of corruption.
Banking Sector Stability: Steady, but Not Strong (Grade: C-)
The Central Bank deserves recognition for acting decisively to address weaknesses in three commercial banks. This intervention prevented potential contagion and improved supervision. The IMF notes that financial stability has been preserved, which is commendable.
However, the banking system still suffers from deep structural weaknesses. Non-performing loans remain high, and credit to the private sector, though growing at 8.5 percent in 2025, is insufficient to drive entrepreneurship and job creation.
Financial inclusion is still limited; less than 35 percent of Liberians have access to formal banking services. The IMF’s endorsement of a stronger regulatory toolkit is encouraging, but real progress depends on expanding credit access to small and medium-sized enterprises (SMEs). Without it, banks will remain custodians of liquidity rather than engines of development.
Poverty, Social Protection, and Donor Dependency: The Neglected Front (Grade: F)
Here lies the harshest truth: macroeconomic stability has not translated into human development. The IMF’s report highlights “safeguarded social programs,” but the data tells a different story. Public spending has fallen from 27.1 percent of GDP in 2023 to 21.9 percent in 2025, and the fall in external grants has left social sectors gasping for air. Poverty rates remain high, and youth unemployment shows little improvement.
In 2023, the IMF warned that “fiscal consolidation should not come at the cost of social investment.” Two years later, that warning has proven prophetic. Liberia’s fiscal numbers may satisfy creditors, but they do not feed classrooms or clinics. If growth continues to benefit the extractive sector while the poor face rising costs of living, the government risks a social backlash that could destabilize its economic gains. The challenge is no longer just to grow; it is to grow with purpose and inclusion.
A Look Back: Comparing Past and Present IMF Reviews
To fully appreciate the 2025 review, it’s instructive to compare it with the 2023 and 2024 consultations. In 2023, Liberia’s growth was 4.6 percent but marred by an alarming fiscal deficit of 7 percent and inflation over 10 percent.
By 2024, the deficit had narrowed to 2 percent, inflation dropped slightly to 8.2 percent, and reserves improved modestly. The 2025 review builds on those gains but reveals new vulnerabilities, chiefly, rising inflation again and reduced donor aid. Thus, the story is one of macro-stability achieved but not yet secured.
The government has learned fiscal restraint but not yet mastered inclusive growth. The IMF’s tone, measured but cautious, reflects this dual reality: progress, yes, but fragile progress that could easily unravel without deep reforms in governance, productivity, and anti-corruption enforcement.
International Perspective and Domestic Realities
From Washington’s view, Liberia is a reforming economy deserving continued support. But from Monrovia’s streets, the view is different. Economic progress celebrated abroad often feels invisible at home. The World Bank’s 2025 Africa Pulse report echoes similar concerns, noting that “Liberia’s growth has not been sufficiently inclusive to reduce poverty.”
Likewise, the African Development Bank has flagged structural inequality and weak domestic resource mobilization as barriers to sustainable transformation. This gap between perception and reality must be addressed. Otherwise, international applause risks muting local frustration, and history shows that no economy can sustain stability without social legitimacy.
Final Grade and the Road Ahead
When all metrics are weighed, Liberia’s 2025 IMF performance deserves an overall grade of D- to C-. The government has delivered credible progress in fiscal management and growth stability. But inflation, corruption, and poverty remain thorns in its side.
Sector Grade Summary
Growth & Resilience C- Solid progress, but extractive-driven
Fiscal & Debt Management D Disciplined and improving
Inflation & Monetary Policy D- Rising prices hurt households
Governance & Corruption F Minimal but visible progress
Banking Sector Stability C- Unstable but shallow
Poverty & Social Spending F- Neglected and worsening
Turning Numbers into Lives
Liberia’s economic story in 2025 is neither failure nor success; it is a fragile in-between. Economists may celebrate deficit reduction and debt sustainability; accountants may find comfort in fiscal numbers; politicians may trumpet growth. But for ordinary Liberians, the equation is simpler: if the cost of rice and transport keeps climbing, and if jobs remain scarce, then stability means little.
The IMF’s review offers a mirror. It shows that Liberia has grown disciplined but not yet developed, stable but not yet equitable. The task ahead is not only to maintain macroeconomic progress but to humanize it, to make growth felt in markets, classrooms, and clinics.
Until that happens, Liberia’s economy will remain a tale of progress on paper, struggle in practice.
About the author:
George S Tengbeh is a Labour and Environmental Justice Advocate. He is also a researcher, columnist, and lecturer at the University of Liberia. E: gstengbeh@gmail.com Tel: +231880767070
