Liberia offers opportunities for investment, especially in natural resources such as mining, agriculture, fishing, and forestry, but also in more specialized sectors such as energy, telecommunications, tourism, and financial services. The economy, which was severely damaged by more than a decade of civil wars that ended in 2003, has been slowly recovering, but Liberia has yet to attain pre-war levels of development. Liberia’s largely commodities-based economy relies heavily on imports even for most basic needs like fuel, clothing, and rice – Liberia’s most important staple food. The COVID-19 pandemic disrupted many sectors of the economy, which contracted in 2019 and 2020. However, the World Bank and IMF expect per capita GDP to return to pre-COVID-19 levels by 2023. Growth will be driven mainly by the mining sector, although structural reforms are also expected to increase activity in agriculture and construction.
Low human development indicators, expensive and unreliable electricity, poor roads, a lack of reliable internet access (especially outside urban areas), and pervasive government corruption constrain investment and development. Most of Liberia lacks reliable power, although efforts to expand access to the electricity grid are ongoing through an extension from the Mount Coffee Hydropower Plant, connection to the West Africa Power Pool, and other internationally supported energy projects. Public perception of corruption in the public sector is high, as indicated by Liberia’s poor showing in Transparency International’s 2021 Corruption Perceptions Index, where Liberia ranked 136 out of 180 countries. Low public trust in the banking sector and seasonal currency shortages result in most cash being held outside of banks. To remedy this, the Central Bank of Liberia (CBL) in 2021 initiated a plan to print and circulate additional currency. The new printing and minting will provide 48 billion Liberian dollars through 2024. The CBL and commercial banks have also successfully pushed the adoption of mobile money, which Liberians access through their mobile phones to make everyday purchases and pay bills. However, the government has yet to activate the “national switch,” meaning banking instruments like ATMs and mobile money accounts remain unintegrated and are not interoperable.
The government-backed Business Climate Working Group (BCWG) works with public and private sector stakeholders to explore how to create a friendlier business environment. International donors also work with the government to improve the investment climate, which ranks toward the global bottom by most global measures. Despite these numerous challenges, Liberia is rich in natural resources. It has large expanses of potentially productive agricultural land and abundant rainfall to sustain agribusinesses. Its rich mineral resources offer significant potential to investors in extractive industries. Several large international concessionaires have invested successfully in agriculture and mining, though negotiating these agreements with the government often proves to be a lengthy and byzantine struggle. The fishing industry, long dormant compared to pre-war levels, is making improvements that should make it more attractive for investment.
|TI Corruption Perceptions Index||2021||136 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2020||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in Liberia ($M USD, historical stock positions)||2019||-$94 million||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||$570||http://data.worldbank.org/indicator/NY.GNP.PCAP.CD|
1. Openness To, and Restrictions Upon, Foreign Investment
The Government of Liberia describes the country as “open for business” and supports programs and initiatives to foster commerce, including an ad hoc Business Climate Working Group (BCWG) to improve the investment climate. During Liberia’s National Judicial Conference in June 2021, President George Weah called on the Judiciary to partner with agencies on reforms to improve the investment climate. The BCWG, chaired by the Minister of Finance and Development Planning, collaborates with the Ministry of Commerce and Industry , Liberia Business Registry (LBR) , National Investment Commission (NIC) , and Liberia Revenue Authority (LRA) . The National Investment Commission (NIC) is Liberia’s investment promotion agency. It develops investment strategies, policies, and programs to attract foreign investment and negotiates investment contracts and concessions. The NIC oversees the implementation of Liberia’s 2010 Investment Act and chairs an ad hoc Inter-Ministerial Concession Committee (IMCC). In 2021, the NIC became a member of the World Association of Investment Promotion Agencies (WAIPA) See link ( https://waipa.org/members/ ). It also participates in the African Investment Promotion Agencies (IPAs) Forum.
In practice, however, the government does much to discourage investors and investment. Some business leaders report it is difficult even to meet with government representatives to discuss new investment or policies damaging to the business climate. A weak legal and regulatory framework, lack of transparency in contract awards, and widespread corruption inhibit foreign direct investment. Investors are often treated as opportunities for graft, and government decisions affecting the business sector are driven more by political cronyism than investment climate considerations. Many businesses find it easy to operate illegally if the right political interests are being paid, whereas those that try to follow the rules receive little if any assistance from government agencies. The Investment Act restricts market access for foreign investors, including U.S. investors, in certain economic sectors or industries. See “Limits on Foreign Control and Right to Foreign Ownership and Establishment” below for more detail.
Foreign and domestic private entities may own and establish business enterprises in many sectors. The Liberian constitution restricts land ownership to citizens, but non-Liberians may hold long-term leases to land. Examples are rubber, oil palm, and logging concessions that cover a quarter of Liberia’s total land mass. See Real Property, below, for further details.
The National Investment Commission is the oversight agency to screen and monitor investments. The Investment Act and Revenue Code mandate that only Liberian citizens may operate businesses in the following sectors and industries, but it is not clear to what degree this mandate is enforced:
- Supply of sand
- Block making
- Travel agencies
- Retail sale of rice and cement
- Ice making and sale of ice
- Tire repair shops
- Auto repair shops with an investment of less than USD 550,000
- Shoe repair shops
- Retail sale of timber and planks
- Operation of gas stations
- Video clubs
- Operation of taxis
- Importation or sale of second-hand or used clothing
- Distribution in Liberia of locally manufactured products
- Importation and sale of used cars (except authorized dealerships, which may deal in certified used vehicles of their make)
The Investment Act also sets minimum capital investment thresholds for foreign investors in other business activities, industries, and enterprises. (See Section 16 of the Act: http://www.moci.gov.lr/doc/TheInvestmentActof2010(1).pdf .) For enterprises owned exclusively by non-Liberians, the Act requires at least USD 500,000 in investment capital. For foreign investors partnering with Liberians, the Act requires at least USD 300,000 in total capital investment and at least 25 percent aggregate Liberian ownership.
All businesses must register with the Liberia Business Registry (LBR) to conduct business or provide services in Liberia.
Investment contracts, such as concessions, are reviewed by the Inter-Ministerial Concessions Committee (IMCC). Concessions are ratified by the national legislature and approved by the president. Businesses register with the Liberia Revenue Authority (LRA) for taxes and the National Social Security and Welfare Corporation (NASSCORP) for social security.
It is possible for foreign companies to obtain investment incentives through the National Investment Commission. In 2021, two companies, Mano Manufacturing Company and Jetty Rubber LLC, received long-term investment incentives, according to NIC’s 2021 Annual Report. Foreign companies must use local counsel when establishing a subsidiary. If the subsidiary will engage in manufacturing and international trade, it must obtain a trade license from the LBR. For more information about investment laws, bilateral investment treaties, and other treaties with investment provisions, see: https://investmentpolicy.unctad.org/country-navigator/121/liberia .
Liberia is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and a party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.
The government neither promotes nor incentivizes outward investment but it does not restrict Liberian citizens from investing abroad.
3. Legal Regime
Companies are required to adhere to International Financial Reporting Standards (IFRS) consistent with international norms. In many instances, however, authorities do not consistently enforce or apply national laws and international standards. Furthermore, no systematic oversight or enforcement mechanisms exist to ensure government authorities correctly follow administrative rules. Accounting, legal, and regulatory procedures are often not transparent. The government does not require environmental, social, and governance (ESG) disclosure to facilitate transparency or help investors and consumers distinguish between high-and low-quality investments. Liberia passed a Freedom of Information Law in 2010 requiring government agencies to appoint a public information officer and make records available to the public, but access to government records is often difficult or impossible. Some government ministries and agencies have overlapping responsibilities, resulting in inconsistent application of laws. Government agencies are not legally required to disclose regulations before or after enactment and there is no requirement for public comment, although finalized regulations are often published. No central clearinghouse exists to access proposed regulations. Government finances, including revenues and debt obligations, are partially captured in national budgets, but are not fully transparent. Some budget documents are accessible online. For more information on regulatory transparency, see: https://rulemaking.worldbank.org/en/data/explorecountries/liberia .
Liberia is a member of the Economic Community of West African States (ECOWAS) and the Mano River Union (MRU) . The Liberia Revenue Authority (LRA) is standardizing the country’s customs and tariff systems and harmonizing its tax regime with the ECOWAS Common External Tariff . Liberia is a member of the World Trade Organization.
Liberia’s legal system uses common law alongside local customary law. The common law-based court system operates in parallel with local customary law, which incorporates unwritten, indigenous practices, culture, and traditions. Adjudication under these dual systems often results in conflicting decisions between entities based in Monrovia and communities outside of Monrovia, as well as within communities.
The Commercial Court hears commercial and contractual issues, including debt disputes of USD 15,000 and above. In theory, the Commercial Court presides over all financial, contractual, and commercial disputes, serving as an additional avenue to expedite commercial and contractual cases. Under the Liberian constitution, the judicial branch is independent from the executive, but reports regularly indicate that the executive branch frequently interferes in both judicial and legislative matters. Cases can be subject to extensive delays and procedural and other errors, and investors have questioned the fairness and reliability of judicial decisions. There are widespread reports that court officials solicit bribes to act on cases. Regulations or enforcement actions are appealable, and appeals are adjudicated in the Supreme Court . The high volume of appeals is a significant burden on the court’s five judges and often results in long delays.
Laws guiding foreign investment include the Investment Act of 2010 , the Revenue Code , the Public Procurement and Concessions Act , and the National Competitive Bidding Regulation . No major laws or judicial decisions pertaining to foreign direct investment have come out in the past year. The government does not maintain a “one-stop-shop” website for investment laws, rules, procedures, or reporting requirements.
The Ministry of Commerce and Industry (MOCI) reviews domestic and international trade transactions for competition-related concerns. If the MOCI cannot resolve the issue or it requires investigation, it may be referred to the Department of Economic Affairs at the Ministry of Justice (MOJ). The MOJ refers potential violations of civil or criminal law to the court system, including the Commercial Court. There were no significant competition cases during the review period. Liberia does not have anti-trust laws.
The Liberian Constitution permits the government to expropriate property for “national security issues or where the public health and safety are endangered, or for any other public purposes.” The government must pay just compensation and landowners may challenge the expropriation in court. When property taken for a purpose is no longer used for that purpose, the former owner has the right of first refusal to reacquire the property. The 2010 Investment Act further defines the circumstances under which the government can legally expropriate property and includes protections for foreign enterprises against expropriation or nationalization. Liberia is a signatory to the Multilateral Investment Guarantee Agency (MIGA) Convention.
4. Industrial Policies
The government provides tax deductions for equipment, machinery, cost of buildings and fixtures used in manufacturing. It also provides exemptions on import duties and goods and services taxes as investment incentives for the following sectors:
- Hospitals and Medical
- Information Technology
- Agriculture and Agro-processing (fisheries, poultry, aquaculture, food processing)
Investments in economically deprived regions qualify for additional incentives of up to 12.5 percent. Additional investment incentives are available if an investment creates more than 100 direct jobs, or if an investment uses at least 60 percent local materials to manufacture finished products.
The government does not issue guarantees or jointly finance foreign direct investment projects.
In 2019, the government established a Special Economic Zone (SEZ) Steering Committee, “to create, drive, guide, enhance, coordinate, and manage single, multiple and mixed-use (SEZs) in Liberia.” The government identified the port city of Buchanan in Grand Bassa County for the first special economic zone, now known as the Buchanan Special Economic Zone. In 2021, the African Development Bank (AfDB) announced it would fund a Special Agro-Industrial Processing Zone (SAPZ) Project in the Buchanan Special Economic Zone.
Liberia has no performance or data localization requirements.
5. Protection of Property Rights
Liberian law protects property rights and interests, but with weak enforcement mechanisms. “Long term” mortgages or construction loans of up to 10 years are only available through the Liberia Bank for Development and Investment. Only Liberians may own land, with the limited exception provided in Article 22(c) of the Constitution that non-citizen missionary, educational, and other benevolent institutions shall have the right to own property, if that property is used for the purposes for which acquired. Property no longer so used reverts to the Government of Liberia.
Other foreigners and non-resident investors may acquire land on leases, which ordinarily run for 25 to 50 years. Liberian law provides for no official waiver mechanisms for limitations on foreign land ownership.
The Liberia Land Authority (LLA) , a one-stop-shop for all land-related matters, is working with international partners, including USAID, to implement strategic and targeted programs aimed at resolving critical land issues. Although the LLA encourages property owners to identify and register land titles, it does not have systemic enforcement programs. The LLA estimates that less than 25 percent of the country’s total land is formally registered. Conflicting land ownership records are common. Investors sometimes experience costly and complex land dispute issues, even after concluding agreements with the government.
The Land Rights Act, enacted in 2018, was designed to resolve historical land disputes that have caused conflict and communal strife in the past. The Act defines four categories of land ownership as follows:
Public land, which is owned, but currently not used by the government
Government land, which is used by government agencies (for office buildings or other purposes)
Customary land, on which the livelihoods of most rural communities depend
Private land owned by private citizens.
Public awareness of the Land Rights Act is growing, but still limited.
See Limits on Foreign Control and Right to Private Ownership and Establishment, above, for further information, including implementation of the Land Rights Act. See, also: https://www.doingbusiness.org/en/data/exploreeconomies/liberia#DB_rp .
Foreign companies seeking to lease land may lease privately or publicly held land. Frequently, foreign companies seeking to acquire land leases do so through direct negotiations with landlords or owners.
Liberia has a weak legal structure and regulatory environment for enforcement of Intellectual Property Rights (IPR). The Liberia Intellectual Property Act covers domain names, traditional knowledge, transfer of technology, patents, and copyrights. The Liberia Intellectual Property Office (LIPO) operates as a semi-autonomous agency under the oversight of the Ministry of Commerce and Industry. LIPO, however, lacks the technical and financial capacity to address infringements of intellectual property rights.
The Copyright Society of Liberia (COSOL) collaborates with the MOCI and LIPO to develop legal and international frameworks to guide the collection and distribution of royalties. In February 2021, LIPO and COSOL rolled out nationwide public awareness and inspection campaigns to remove pirated copyright materials from the Liberian market. In October 2021, during a meeting of the World Intellectual Property Organization (WIPO), the government recommitted to global efforts to protect and promote intellectual property rights.
There is no system to track and report on seizures of counterfeit goods. The government rarely prosecutes intellectual property violations. Many Liberians are unfamiliar with intellectual property rights, and intellectual property infringement is common, including unauthorized duplication of movies, music, and books. Counterfeit drugs, apparel, cosmetics, mobile phones, computer software, and hardware are sold openly.
Liberia is not listed in USTR’s Special 301 Report or the Notorious Markets List.
For additional information about national laws and local IPR points of contact, see WIPO’s country profiles at https://www.wipo.int/directory/en/ .
6. Financial Sector
The government welcomes foreign investment, but Liberia’s capital market is highly underdeveloped. Private investors have limited credit and investment options. The country does not have a domestic stock market and does not have an effective system to encourage portfolio investments. In 2019, Liberia committed to non-discriminatory foreign exchange auctions consistent with its obligations under IMF Article VIII , and the country does not restrict international payments and transfers. Commercial credit is allocated on market terms, and foreign investors can get credit on the local market. Many foreign investors prefer to obtain credit from foreign banks.
The country’s financial sector regulatory authority is the Central Bank of Liberia . Foreign banks or branches can establish operations in Liberia subject to the CBL’s regulations. There are 10 commercial banks. Most are foreign-owned with branch outlets in the country. Non-bank financial institutions also provide diverse financial services. These include a development finance company, a deposit-taking microfinance institution, numerous non-deposit-taking microfinance institutions, rural community finance institutions, money remittance entities, foreign exchange bureaus, credit unions, and village savings and loans associations. However, chronic liquidity shortages, especially of Liberian dollars in recent years, have undermined confidence in banks. The CBL’s 2021 third-quarter report described the banking industry as “relatively stable” based on indicators such as total assets, deposits, loans, and total capital. As of November 2021, the capital adequacy ratio of 27.47 was well above the 10% regulatory minimum, and the liquidity ratio was 44.17, above the 15% regulatory minimum. Although the banking sector is sufficiently capitalized, it is not well positioned to withstand shocks. The sector’s primary weaknesses include a high number of non-performing loans (21% in November 2021), low profitability due to high operating expenses, periodic cash shortages for depositors, low public confidence, and inadequate policing and prosecution of money laundering and other financial crimes. There are no restrictions on a foreigner’s ability to establish a bank account.
The Government of Liberia does not maintain a Sovereign Wealth Fund (SWF) or similar entity.
7. State-Owned Enterprises
Liberia has approximately 20 state-owned enterprises (SOEs), which are governed by boards of directors and management teams overseen by government ministries. All are wholly government-owned and semi-autonomous. The president of Liberia appoints board members and directors or managers to govern and run SOEs. The Public Financial Management (PFM) Act defines the requirements for SOEs.
SOEs employ more than 10,000 people in sea and airport services, electricity supply, oil and gas, water and sewage, agriculture, forestry, maritime, petroleum importation and storage, and information and communication technology services. Not all SOEs are profitable, and some citizens and advocacy groups have called for SOEs to be dissolved or privatized. Liberia does not have a clearly defined corporate code for SOEs. Reportedly, high-level officials, including some who sit on SOE boards, influence government-owned enterprises to conduct business in ways not consistent with standard corporate governance. Not all SOEs pay taxes, or do so transparently, and SOE revenue is not always transparently reported or adequately reflected in national budgets.
In 2016 Liberia’s Ministry of Education initiated a school privatization program that, as of the 2021-22 school year, had privatized 525 schools. Operation of the schools was outsourced to domestic and foreign for-profit and nonprofit education providers and NGOs. There have been numerous calls from political leaders and government officials to privatize government-owned enterprises, including the Liberia Electricity Corporation, the Liberia Water & Sewer Corporation, and Liberia Petroleum Refining Company, but the government does not have an official privatization program.
8. Responsible Business Conduct
Liberian authorities have not clearly defined responsible business conduct (RBC). The Liberian Environmental Protection Agency (EPA), however, includes RBC requirements in policies such as the National Disaster Risk Reduction and Resilience Strategy (2020-2030), the National Climate Change Response Strategy (2018), and the National Adaptation Plan (2020-2030). Foreign companies are encouraged, but not required, to publicly disclose their policies, procedures, and practices to highlight their RBC practices.
Some non-governmental organizations (NGOs), civil society organizations (CSOs), and workers organizations/unions promote or monitor foreign company RBC policies and practices. However, NGOs and CSOs monitoring or advocating for RBC do not conduct their activities in a structured and coordinated manner, nor do they tend to monitor locally owned companies.
Most Liberians are generally unaware of RBC standards. Generally, the government expects foreign investors to offer social services to local communities and contribute to a government-controlled social development fund for the area in which the enterprise conducts its business. Some communities complain that these contributions to social development funds do not reach them. The government frequently includes clauses in concession agreements that oblige investors to provide social services such as educational facilities, health care, and other services which other governments typically provide. Foreign investors have reported that some local communities expect benefits in addition to those outlined in formal concession agreements.
Liberia is a member of the Extractive Industries Transparency Initiative (EITI). The National Bureau of Concessions monitors and evaluates concession company compliance with concession agreements, but it does not design policies to promote and encourage RBC. Some NGOs report that several concessions have violated human or labor rights, including child labor and environmental pollution. Liberia has several private security companies, but the country is not a signatory to the Montreux Document on Private and Security Companies. Private security companies are regulated by the Ministry of Justice, and they perform a range of tasks such as providing security or surveillance to large businesses, international organizations, diplomatic missions, and some private homes.
Department of State
- Country Reports on Human Rights Practices;
- Trafficking in Persons Report;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
- Xinjiang Supply Chain Business Advisory
Department of the Treasury
Department of Labor
Liberia ratified the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol in 2002. In 2018, Liberia ratified the Paris Agreement and adopted the Liberia National Policy and Response Strategy on Climate Change. Liberia released its revised Nationally Determined Contribution in 2021, when it committed to reducing economy-wide greenhouse gas emissions by 64 percent below business-as-usual levels by 2030. The revised NDC targets nine sectors: Agriculture, Forests, Coastal zones, Fisheries, Health, Transport, Industry, Energy, and Waste. Liberia’s Environmental Protection Agency (EPA) maintains a director of climate finance instruments eligible for Liberia that can be used for public or private sector projects. Liberia has been working with national and international development partners since 2008 to reform its forestry sector and is currently implementing Reducing Emissions from Deforestation and Forest Degradation (REDD+) readiness activities, which include a National Forest Inventory, and institutionalizing its National Forest Monitoring System. In 2019, Liberia set up its Safeguard Information System , a free public web-based platform hosted by the EPA to provide information on how social and environmental safeguards are being addressed. However, the site does not appear to be updated regularly.
Liberia has laws against economic sabotage, mismanagement of funds, bribery, and other corruption-related acts, including conflicts of interest. However, Liberia suffers from corruption in both the public and private sectors. The government does not implement its laws effectively and consistently, and there have been numerous reports of corruption by public officials, including some in positions of responsibility for fighting corrupt practices. On December 9, 2021, the United States Treasury Department sanctioned Nimba County Senator Prince Yormie Johnson under the Global Magnitsky Act for personally enriching himself through pay-for-play funding schemes with government ministries and organizations. In 2021, Liberia ranked 136 out of 180 countries on Transparency International’s Corruption Perception Index . See http://www.transparency.org/research/cpi/overview .
The Liberia Anti-Corruption Commission (LACC) currently cannot directly prosecute corruption cases without first referring cases to the Ministry of Justice (MOJ) for prosecution. If the MOJ does not prosecute within 90 days, the LACC may then take those cases to court, although it has not exercised this right to date. The LACC continues to seek public support for the establishment of a specialized court to exclusively try corruption cases.
In October 2021 the Liberia Anti-Corruption Commission (LACC), with the Swedish International Development Cooperation Agency (SIDA) and the United Nations Development Program (UNDP), launched “The Anti-Corruption Innovation Initiative Project.” LACC will hire at least 15 officers around the country who will report on corruption to the LACC. LACC is also developing a national digital platform for the public to report corruption.
Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems. Multinational firms often report paying fees not stipulated in investment agreements. Private companies do not have generally agreed and structured internal controls, ethics, or compliance programs to detect and prevent bribery of public officials. No laws explicitly protect NGOs that investigate corruption.
Liberia is signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC), but Liberia’s association with these conventions has done little to reduce rampant government corruption.
Contact at government agencies responsible for combating corruption:
Baba Borkai, Chief Investigator
Liberia Anti-Corruption Commission (LACC), Monrovia, http://lacc.gov.lr/ email@example.com
Tel: (+231) 777-313131
Contact at a “watchdog” organization (local or nongovernmental organization operating in Liberia that monitors corruption):
Anderson Miamen, Executive Director
Center for Transparency and Accountability in Liberia (CENTAL)
Tel: (+231) 886-818855
10. Political and Security Environment
President Weah’s inauguration in January 2018 marked the first peaceful transfer of power in Liberia from one democratically elected president to another since 1944. International and domestic observers have said midterm senatorial and special elections since then have been largely peaceful, although there were reported instances of vote tempering, election violence, intimidation, and harassment of female candidates. Liberia’s relatively free media landscape has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates, and organized, non-violent demonstrations. Liberia adopted a press freedom law in 2019, but there have been reports and instances of violence and harassment against the media and journalists. Numerous radio stations and newspapers distribute news throughout the country. The government has identified land disputes and high rates of youth and urban unemployment as potential threats to security, peace, and political stability.
The United Nations Mission in Liberia (UNMIL), a peacekeeping force, withdrew from Liberia in March 2018 and turned over responsibility for security to the government. Protests and demonstrations may occur with little warning. The Armed Forces of Liberia and law enforcement agencies, including the Liberia National Police (LNP) , Liberia Immigration Service (LIS) , and Liberia Drug Enforcement Agency (LDEA) , maintain security in the country. There are also many private security firms. Most security personnel are in the capital city Monrovia and other urban areas. The effectiveness of soldiers and police is limited by lack of money and poor infrastructure.
11. Labor Policies and Practices
With a literacy rate of just under 50 percent, much of the Liberian labor force is unskilled. Most Liberians, particularly those in rural areas, lack basic vocational or computer skills. Liberia has no reliable data on labor force statistics, such as unemployment rates. Government workers comprise the majority of formally employed Liberians.
An estimated four out of five Liberian workers engage in “vulnerable” or “informal” employment. Many work in difficult and dangerous conditions that undermine their basic rights. The Ministry of Labor (MOL) largely attributes high levels of vulnerable and informal employment to the private sector’s inability to create employment. There is an acute shortage of specialized labor skills, particularly in medicine, information and communication technology, and science, technology, engineering, and mathematics (STEM). Migrant workers are employed throughout the country, particularly in service industries, artisanal diamond and gold mining, timber, and fisheries.
The predominantly female workers who sell in markets and on the streets face significant challenges, including a lack of access to credit and banking services, limited financial literacy and business training, few social protections or childcare options, harassment from citizens and local authorities, and poor sanitation within marketplaces. Through the Bureau of Small Business Administration (SBA) at the Ministry of Commerce and Industry, businesses owned by female informal workers are being formalized using a “one-stop shop” registration mechanism. Development partners are also designing programs aimed at empowering women businesses and entrepreneurs.
Liberia’s labor law, the 2015 Decent Work Act, gives preference to employing Liberian citizens, and most investment contracts require companies to employ a defined percentage of Liberians, including in top management positions. In 2021, the Ministry of Labor issued an order that restricts certain employment opportunities in commercial business establishments with branches in Monrovia and other parts of the country to Liberians. The order was the result of a memorandum of understanding between the Ministry of Labor and the Liberia Chamber of Commerce calling for the creation of five hundred jobs for new college and university graduates.
Foreign companies often report difficulty finding local skilled labor. Child labor is a problem, particularly in extractive industries. The Decent Work Act guarantees freedom of association and gives employees the right to establish labor unions. Employees can become members of organizations of their own choosing without prior authorization. Workers, except for civil servants and employees of state-owned enterprises, are covered by the Act. The Act allows workers’ unions to conduct activities without interference by employers. It also prohibits employers from discriminating against employees because of membership in or affiliation with a labor organization. Unions are independent from the government and political parties. Employees, through their associations or unions, often demand and sometimes strike for better compensation. When company ownership changes, workers sometimes seek payment of obligations owed by previous owners or employers.
The Decent Work Act provides that labor organizations, including trade or employees’ associations, have the right to draw up constitutions and rules regarding electing representatives, organizing activities, and formulating programs.
There were no major labor union-related negotiations affecting workers or the labor market during 2021.
While the law prohibits anti-union discrimination and provides for the reinstatement of workers dismissed because of union activities, it allows for dismissal without cause provided the company pays statutory severance packages. The Decent Work Act sets out fundamental rights of workers and contains provisions on employment and termination of employment, minimum conditions of work, occupational safety and health, workers’ compensation, industrial relations, and employment agencies. It also provides for periodic reviews of the labor market as well as adjustments in wages as the labor conditions dictate. The government does not waive labor laws to attract or retain investment, but the National Investment Commissions (NIC) provides investment incentives based on economic sectors and geographic areas (see Investment Incentives in section 4 above).
The MOL does not have an adequate or effective inspection system to identify and remedy labor violations and hold violators accountable. It lacks the capacity to effectively investigate and prosecute unfair labor practices, such as harassment or dismissal of union members or instances of forced labor, child labor, and human trafficking.
14. Contact for More Information
U.S. Commercial Service Contact Information
Phone: (+231) 77-677-7000