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LIBERIA
Economic Freedom Score
25
World Rank:
141
Regional Rank:
31
Least
free 0
iberia’s economic freedom score is 52.7, making its econoLhigher
my the 141st freest in the 2015 Index. Its score is 0.3 point
than last year, reflecting improvements in freedom
50
75
Most
100 free
52.7
Freedom Trend
56
from corruption and trade freedom that offset declines in six
of the 10 economic freedoms, including property rights, labor
freedom, and business freedom. Liberia is ranked 31st out of
46 countries in the Sub-Saharan Africa region, and its overall
rating remains below the world and regional averages.
Liberia’s high economic growth rates have corresponded with
five years of strong advances in economic freedom. With SubSaharan Africa’s third largest increase in economic freedom
over the past half-decade, Liberia’s score has advanced by
6.2 points. Progress in reducing corruption, improving fiscal accounts, and opening the economy to trade and investment have further cemented Liberia’s progression out of the
“repressed” category.
Nevertheless, the judicial system and the property rights
regime remain weak. Efforts to reform land titling are progressing but not fully implemented. Business and labor regulations are becoming more efficient, but more progress is
needed to promote sustained entrepreneurial and job growth.
BACKGROUND: In the 1990s, civil war killed a quarter of a
million Liberians. A peace agreement was reached in 1995,
and Charles Taylor was elected president. He was forced to
step down and was subsequently found guilty of war crimes in
April 2012. Ellen Johnson Sirleaf, elected president in 2005
and re-elected in 2011, was awarded the Nobel Peace Prize in
2011. The country remains fragile. In 2013, the United Nations
Refugee Agency repatriated 155,000 Liberians who had fled
during the civil war. Rampant corruption, high unemployment, and widespread illiteracy hinder development. Political instability and international sanctions have destroyed
most large businesses and driven out many foreign investors.
Liberia is rich in natural resources including rubber, mineral
resources, and iron ore. It has suffered significantly from the
2014 Ebola virus outbreak in West Africa.
How Do We Measure Economic Freedom?
See page 475 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.
54
52
50
48
46
44
2011
2012
2013
2014
2015
Country Comparisons
52.7
Country
World
Average
60.4
Regional
Average
54.9
Free
Economies
84.6
0
20
40
60
80
100
Quick Facts
Population: 4.1 million
GDP (PPP): $2.9 billion
8.0% growth in 2013
5-year compound annual growth 7.0%
$703 per capita
Unemployment: 3.8%
Inflation (CPI): 7.6%
FDI Inflow: $1.1 billion
Public Debt: 29.5% of GDP
2013 data unless otherwise noted.
Data compiled as of September 2014.
287
LIBERIA (continued)
THE TEN ECONOMIC FREEDOMS
Score
RULE OF
LAW
Country
World Average
Property Rights 25.0
Freedom from Corruption 38.0
0
20
40
60
80
Rank
1–Year
Change
124th
83rd
–5.0
+4.2
100
The Senate candidacy of the president’s son in the October 2014 elections focused public
attention on claims of nepotism and graft. Despite government efforts to fight it, corruption
is endemic. Property rights are not strongly protected, and the rule of law remains uneven
across the country. The judiciary lacks adequate facilities. Legislation to reconcile statutory
and customary land tenure systems is pending.
Fiscal Freedom 83.0
GOVERNMENT
Government Spending 69.9
SIZE
60th
86th
0
20
40
60
80
–0.6
–0.6
100
Liberia’s top individual and corporate income tax rates are 25 percent. Other taxes include a
property tax and a goods and services tax. The overall tax burden equals 21.1 percent of gross
domestic product. Government expenditures are equivalent to 31.7 percent of the domestic
economy, and public debt is equal to around 30 percent of domestic output.
REGULATORY
EFFICIENCY
Business Freedom 60.1
Labor Freedom 43.9
Monetary Freedom 72.7
110th
155th
130th
0
20
40
60
80
–2.2
–3.1
–0.2
100
Reform measures have streamlined the procedures for establishing a business, but start-ups
are discouraged by other institutional deficiencies such as pervasive corruption and very limited access to credit. Obtaining necessary licenses remains time-consuming. The labor market
remains underdeveloped. The effectiveness of Liberian monetary policy is limited in the near
term, given the high dollarization of the economy.
OPEN
MARKETS
Trade Freedom 74.4
Investment Freedom 40.0
Financial Freedom 20.0
109th
131st
163rd
0
20
40
60
80
+10.3
0
0
100
Liberia’s average tariff rate is 5.3 percent. Imports may face customs delays, and state-owned
enterprises may distort the economy. Foreign investment in several sectors is restricted. The
rate of nonperforming loans is high. The high cost of credit and scarce access to financing hold
back private-sector development. A large part of the population remains outside of the formal
banking sector.
Long-Term Score Change (since 2009)
RULE OF LAW
Property Rights
Freedom from
Corruption
288
0
+17.0
GOVERNMENT
SIZE
Fiscal Freedom
Government
Spending
+9.2
–27.3
REGULATORY
EFFICIENCY
OPEN MARKETS
Business Freedom +19.9
Labor Freedom
–5.9
Monetary Freedom +2.6
Trade Freedom
+20.6
Investment Freedom +10.0
Financial Freedom
0
2015 Index of Economic Freedom