By Festus Poquie
Liberia’s ambition to become a lower-middle-income economy by 2029 risks being undermined by a widening gap between economic growth and household prosperity, as a mining boom boosts output without generating enough jobs to lift incomes.
In its draft 2027 budget document, the government says gross domestic product per capita has risen to about $964 from $850 in January 2025, putting the country on course to reach its $1,050 target by 2029 under the ARREST Agenda for Inclusive Development.
But the benchmark does not determine Liberia’s income classification under the World Bank’s methodology, which uses gross national income per capita rather than GDP per capita.
For fiscal 2027, the World Bank classifies economies with GNI per capita of $1,175 or less as low-income, while lower-middle-income status begins at $1,176. Liberia’s proposed GDP-per-capita target therefore offers no guarantee that the country will cross the threshold.
The World Bank calculates GNI per capita using its Atlas methodology, which adjusts for exchange-rate fluctuations and measures income accruing to residents rather than simply production within national borders.
The gap highlights a deeper challenge for Liberia: economic expansion is not translating into enough productive employment and higher household earnings to support a durable transition out of poverty.
Real GDP is projected to grow 5.5% in 2026, up from 5.1% in 2025, according to the government’s draft 2027 budget. Mining and panning expanded 16.6% in 2026, accounting for 22.3% of economic output, and is projected to represent a quarter of GDP by 2028.
Yet the capital-intensive nature of mining limits its ability to absorb large numbers of workers, leaving much of the population dependent on low-productivity agriculture and informal businesses.
The World Bank’s November 2026 economic update warned that Liberia needs more and better jobs to translate growth into poverty reduction, pointing to structural constraints that limit private-sector expansion and employment creation.
The disconnect is reflected in the country’s poverty outlook. The government projects poverty will decline to 33.2% in 2026 from 40.1% in 2023. But the World Bank’s April 2026 assessment projected an increase in extreme poverty in 2025, despite economic growth, underscoring how weak job creation can prevent expanding output from improving living standards.
The problem raises the risk of a low-income trap, in which sustained economic growth fails to generate the productivity gains, employment and household income increases needed to move the population into a higher income bracket.
Liberia’s economic expansion has also been supported by rising mineral production and investment, while agriculture and services continue to account for substantial portions of output.
But stronger export earnings do not automatically translate into higher national income when profits and payments flow abroad or when domestic businesses remain disconnected from major investment projects.
The World Bank has urged Liberia to diversify its economy, strengthen private-sector investment and expand productive employment rather than rely disproportionately on extractive industries.
The government points to other gains, including domestic revenue collection exceeding $1 billion for the first time in September and a proposed $1.54 billion budget for 2027, up 16.9% from the previous year’s approved spending plan.
Those improvements signal stronger fiscal capacity, but they do not necessarily demonstrate rising household incomes.
Going forward, the test of economic progress will be whether mining investment creates wider commercial opportunities, businesses employ more workers and households earn enough to improve their living standards.
Without that shift, the country risks recording faster growth while remaining below the World Bank’s income threshold — an economy expanding on paper without achieving the structural transformation required to escape poverty.
