By Amin Modad (former Commerce and Industry Minister)
My second book, coming out soon, discusses how the world is changing and how swiftly Liberia must adapt—rethinking its foreign policy and shaping its development strategy around its own needs and future—or risk being left behind.
Sweden has announced that it will end bilateral development cooperation with Liberia, and its embassy in Monrovia will be closed during the course of 2026. Changes in the global geopolitical landscape are driving countries to prioritize national interests over international cooperation. The shift toward a multipolar world is reshaping how aid is distributed and used, often reducing humanitarian assistance in favor of strategic bilateral agreements aimed at competing for influence.
These changes, though long anticipated, have been exacerbated by recent policy decisions by the United States, including the imposition of new trade tariffs, the termination of USAID programs, and growing anti-multilateral rhetoric. As stated in the book, I am not a proponent of aid; yes, in certain circumstances it has been and remains necessary. But where do we draw the line between temporary or emergency support and perpetual dependence, and when do we prepare ourselves?
I believe that, despite the inadequate phase-out strategies and the sudden impacts caused by limited consultations before these supports are withdrawn, these policy shifts challenge leaders and policymakers in countries heavily dependent on foreign aid to rethink their sectoral policies, trade and investment strategies, and national development agendas. They also call for greater accountability and fiscal discipline.
Many nations are strategically refocusing their foreign policies on their own strategic interests rather than shared objectives under multilateral frameworks, particularly impacting least developed countries (LDCs) like Liberia that rely on multilateralism and external trade relationships for security and support for their development efforts. Already, we can see how this exposes our vulnerabilities inherent in aid dependency.
We need to urgently ask ourselves, ARE WE REALLY PREPARED TO FOMENT THE CHANGE WE NEED? If the answer is firmly ‘yes,’ we need to begin by redefining our foreign policy and strategic focus on diversification, robust governance, and an unwavering commitment to national development priorities as encapsulated in the ARREST Agenda.
Ultimately, Liberia’s path forward in global trade and attracting foreign direct investments (FDI) is not just about negotiating better terms or being reactionary to exogeneous changes. It is about shifting from passive participation to proactive transformation—using developmental diplomacy to drive local industrialization, enforce environmental and labor standards, and build the foundations for sustainable economic growth. In this new era, Liberia’s success will depend on its resolve to build value at home and to engage globally from a position of strength, not dependency.
Liberia’s economic growth rate, which averaged 4.7% per annum during years of robust international support (2006–2013), dropped to below 2% in recent years as external funding waned and the country faced multiple shocks, including the COVID-19 pandemic and global commodity price fluctuations. Yet, these statistics also underscore Liberia’s potential. The country possesses 4.3 million hectares of arable land, with only about 20% currently under cultivation.
The rubber sector, which already contributes nearly $100 million annually to export earnings, could double its value with modest investments in local processing and higher-value products. Liberia’s mineral wealth is equally significant: with estimated reserves of over 3 billion metric tons of iron ore and untapped deposits of gold, diamonds, and bauxite, the mining sector could, under transparent and sustainable management, serve as a springboard for industrialization and job creation.
Strategically, Liberia’s Atlantic coastline positions it as a natural gateway for West Africa, with the potential to become a regional logistics and trade hub. By investing in its ports, road and rail corridors, and leveraging the African Continental Free Trade Area (AfCFTA), Liberia can expand its exports, attract foreign direct investment (FDI), and integrate more fully into regional and global value chains.
Recent success stories from countries like Rwanda and Ghana—both of which have doubled their FDI inflows and significantly reduced aid dependency through exemplary governance, investment in human capital, and economic diversification—provide a blueprint that Liberia can adapt to its unique context.
The way forward hinges on:
- Strengthening Governance and Institutions: Enhanced transparency, rule of law, and anti-corruption measures will improve investor confidence and ensure that resource revenues benefit all Liberians.
- Promoting Value Addition and Export Diversification: Although the withdrawal of traditional aid support poses immediate fiscal and social challenges, it also provides Liberia with the opportunity to harness its vast natural and human resources, reform its institutions, and take charge of its development journey.
- Moving towards import substitution will create jobs and build resilience against global price shocks.
- Investing in Human Capital: Expanding access to quality education and healthcare will equip Liberia’s youth—the majority of its 5.4 million citizens are under 25—with the skills needed for the 21st century economy.
- Building Strategic Partnerships: Engaging with a broad array of international partners, including the World Bank, African Development Bank, EU, China, and regional neighbors, will diversify Liberia’s sources of investment, technology, and expertise.
- Mobilizing Domestic Resources: Improving tax collection (currently just 13% of GDP, below the sub-Saharan average of 18%) and promoting entrepreneurship will reduce reliance on external support.
THIS BOOK IS TIMELY! It is more than a recounting of events or finger pointing; it is an examination of the complexities of international aid, the risks of building a nation on the values, strategies, and reliance’s of another, and the urgent need for African countries to look inward for sustainable development.
The recommendations made are not merely theoretical; they are based on my experiences in the private and public sectors, as well as in international trade development.
