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2023 Investment Climate Statements: Liberia

EXECUTIVE SUMMARY

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, agribusiness, 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, and corrupt misgovernance continues to hinder growth, investment, and job creation. 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. The World Bank’s latest report  shows Liberia’s GDP per capita  was USD 676 in 2021 compared to USD 700 before the outbreak of the pandemic in 2019.

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 2022 Corruption Perceptions Index, where Liberia dropped six places from to 2021 to 142 out of 180 countries. Low public trust in the banking sector and lack of access to business financing results in most cash being held outside of banks. To remedy this, in 2022 the Central Bank of Liberia (CBL) began printing and circulating additional currency. This will continue through 2024, when the CBL expects to have distributed 48 billion new Liberian dollars. The CBL and commercial banks are also pushing 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 its long-planned National Electronic Payment System (NEPS, aka “the National Switch,”) meaning banking instruments like ATMs and mobile money accounts remain unintegrated and are not interoperable. A World Bank funded project launched in February 2023 is expected to eventually implement the National Switch.

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, while vast mineral resources offer significant potential to investors in extractive industries. A few large international concessionaires have invested successfully in agriculture and mining, though negotiating these agreements with the government often proves to be a lengthy, politicized, and byzantine struggle for those companies who do not pay bribes. The fishing industry, long dormant compared to pre-war levels, is a potential source of investment, but is struggling to make necessary improvements to meet standards and economies of scale that would open global export markets.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2022 142 of 180 https://www.transparency.org/en/cpi/2022/index/lbr
Global Innovation Index 2022 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in Liberia ($M USD, historical stock positions) 2021  $525 million  https://apps.bea.gov/international/factsheet/  
World Bank GNI per capita 2021 $630 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

Policies Towards Foreign Direct Investment

Government agencies involved in investment issues include the Ministry of Finance and Development Planning (MFDP) , the Ministry of Commerce and Industry (MOCI) , the Liberia Business Registry (LBR) , the National Investment Commission (NIC) , and the Liberia Revenue Authority (LRA) . The NIC is Liberia’s investment promotion agency. It develops investment strategies, policies, and programs to attract and guide 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), which approves large-scale investments and concessions. In 2021, the NIC became a member of the World Association of Investment Promotion Agencies (WAIPA) . It also participates in the African Investment Promotion Agencies (IPAs)  Forum.

In practice, the government does much to discourage investors and investment in Liberia. Some business leaders report it is difficult even to meet with government representatives to discuss new investment or policies damaging to the business climate unless bribes are offered. A weak legal and regulatory framework, lack of transparency in contract awards, and widespread corruption inhibit foreign direct investment. Government officials view foreign investors as opportunities for short-term graft, rather than as partners in creating long-term growth for the benefit of the country. 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 at best find that they receive little if any assistance from government agencies, and at worst are targeted by government officials seeking direct or indirect bribes or other unofficial payments. 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.

Limits on Foreign Control and Right to Private Ownership and Establishment

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 that screens and monitors investments. The Investment Act and the Revenue Code mandate that only Liberian citizens may operate businesses in the following sectors and industries, but this mandate is not always enforced:

(1) Supply of sand
(2) Block making
(3) Peddling
(4) Travel agencies
(5) Retail sale of rice and cement
(6) Ice making and sale of ice
(7) Tire repair shops
(8) Auto repair shops with an investment of less than USD 550,000
(9) Shoe repair shops
(10) Retail sale of timber and planks
(11) Operation of gas stations
(12) Video clubs
(13) Operation of taxis
(14) Importation or sale of second-hand or used clothing
(15) Distribution in Liberia of locally manufactured products
(16) Importation and sale of used cars (except authorized dealerships, which may deal in certified used vehicles of their make)

The Investment Act sets minimum capital investment thresholds for foreign investors in other business activities, industries, and enterprises. 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.

Business Facilitation

All businesses must register with the Liberia Business Registry 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 for taxes and the National Social Security and Welfare Corporation (NASSCORP) for social security.

It is possible for foreign companies to obtain short- and long-term and special investment incentives such as relief from customs duties through the National Investment Commission as a result of the 2021 Liberia Tax Amendment Act. In 2022, four companies, Dura Plast (Liberia) Inc., G5 Plus Breweries (Liberia) Inc., Liberia American Poultry, and Global Pharmaceutical Manufacturing Laboratory Limited, received long-term investment incentives, while fourteen companies received special investment incentives, according to NIC’s 2022 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.

Outward Investment

The government neither promotes nor incentivizes outward investment but it does not restrict Liberian citizens from investing abroad.

Liberia has bilateral investment treaties (BITs) with France, Germany, and Switzerland. It also signed a BIT with the United Arab Emirates in 2019 and with the Belgium-Luxembourg Economic Union in 1985 but neither has entered into force. See: https://investmentpolicy.unctad.org/international-investment-agreements/countries/118/liberia .

Liberia enjoys preferential access to the U.S. market under the Generalized System of Preference (GSP) and the African Growth and Opportunity Act (AGOA).

Liberia and the United States do not have a bilateral taxation treaty, but the two countries have had a treaty exempting shipping and aircraft earnings from double taxation since 1982. Liberia has a bilateral tax treaty with Germany. It has also signed bilateral tax treaties with the United Arab Emirates and the Kingdom of Morocco, but those treaties have yet to be ratified by the Liberian legislature. Liberia has initiated negotiations on a bilateral tax treaty with Qatar.

Transparency of the Regulatory System

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 officials often seek ways to avoid complying with the government’s own laws and policies when it comes to foreign investment, including transparent tendering and concessioning processes. 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 only 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 .

International Regulatory Considerations

Liberia is a member of the African Union (AU) , the Economic Community of West African States (ECOWAS)  and the Mano River Union (MRU) . The Liberia Revenue Authority is standardizing the country’s customs and tariff systems and harmonizing its tax regime, including moving from GST to VAT under the ECOWAS Common External Tariff . Liberia is a member of the World Trade Organization (WTO) .

Legal System and Judicial Independence

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 lengthy delays. These delays restrict access to local finance by making collection of collateral a difficult, drawn-out process, resulting in high collateral requirements and a high rate of non-performing loans.

Laws and Regulations on Foreign Direct Investment

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, though this is planned as part of a World Bank project launched in early 2023.

Competition and Antitrust Laws

The Ministry of Commerce and Industry 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.

Expropriation and Compensation

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 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.

Dispute Settlement

ICSID Convention and New York Convention

Liberia is a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) , also known as the Washington Convention. It is also a member of the New York Convention of 1958  on the Recognition and Enforcement of Foreign Arbitral Awards.  Liberia’s Commercial Code provides for the enforcement of awards under the 1958 New York Convention and under the ICSID Convention.

Investor-State Dispute Settlement

Liberia is a member of the ICSID Convention  and a signatory to the Multilateral Investment Guarantee Agency (MIGA) Convention that guarantee the protection of foreign investment.  The Civil Procedure Law governs both domestic and international arbitration, but there is not a stand-alone arbitration law.  Enforcing foreign or domestic arbitration awards may require several years, from filing an application with the court of first instance to obtaining a writ of execution, with provision for an appeal.

Under the ICSID and the New York Arbitration Conventions , Liberian courts are bound to recognize and enforce foreign arbitral awards issued against the government. There have been no recent extrajudicial actions against foreign investors.

International Commercial Arbitration and Foreign Courts

The Investment Act provides for trade dispute settlement between two private parties through either the judicial system or alternative dispute resolution (ADR). Other codes, statutes, and legislative provisions, including the Liberian Civil Procedure Law , govern commercial arbitration and recognize arbitration as a means of resolution between private parties in commercial transactions, based on the model of the United Nations Commission on International Trade Law  (UNCITRAL model law).

Investment contracts between private entities and the government frequently include arbitration clauses specifying dispute settlement outside of Liberia.

Given the limited capacity of the judiciary, investors often prefer not to rely on domestic judicial processes.

Bankruptcy Regulations

Liberia does not have a bankruptcy law. The Commercial Court has limited experience protecting the rights of creditors, equity holders, and holders of other financial contracts.

Investment Incentives

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:

  • Tourism
  • Manufacturing
  • Energy
  • Hospitals and Medical
  • Housing
  • Transportation
  • Information Technology
  • Banking
  • 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.

Foreign Trade Zones/Free Ports/Trade Facilitation

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. Current plans call for the creation of an authority to oversee the SEZ, land improvements, and infrastructure development, including roads and electricity. This work is scheduled to be completed by 2026.

Performance and Data Localization Requirements

Liberia has no performance or data localization requirements.

Real Property

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) , is a one-stop-shop for all land-related matters. 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, owners, and/or communities under provisions in the Land Rights Act.

Intellectual Property Rights

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. 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/  .  

Capital Markets and Portfolio Investment

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.

Money and Banking System

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 issuance of 48 billion in new Liberian currency by 2024 is expected to address these liquidity shortages.

The CBL’s 2022 annual report described the banking industry as “generally stable,” with increases in key balance indicators compared to the previous year due to increased economic activity. Although the banking sector is sufficiently capitalized, it is not well positioned to withstand shocks. The sector’s primary weaknesses include a high rate of non-performing loans (23.2 percent in the third quarter of 2022), 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.

Foreign Exchange and Remittances

Foreign Exchange

Foreign investors may convert, transfer, and repatriate funds associated with an investment (e.g., remittances of investment capital, earnings, loans, lease payments, and royalties).  Transfer of dividends and net profits after tax to investors’ home countries is legal. Investment funds can be freely converted to any currency through banks. Liberia has a floating exchange rate system. The Liberian Dollar (LD) and U.S. Dollar (USD) are legal tenders. Currency exchange rates fluctuate based on market supply and demand. The CBL publishes official daily rates used by commercial banks and the government, such as for payment of civil servant salaries.

Remittance Policies

Liberia permits 100 percent repatriation of funds and does not have currency exchange restrictions. There are no announced plans to change investment remittance policies that would impact access to foreign exchange for investment remittances. The government does not impose time limitations on remittances. Remittances may be sent to Liberia through electronic fund transfer (EFT) with any commercial bank or through specialized remittance institutions, such as Western Union, MoneyGram, or RIA Money Transfer.

Sovereign Wealth Funds

The Government of Liberia does not maintain a Sovereign Wealth Fund (SWF) or similar entity.

Liberia has 46 state-owned enterprises (SOEs) that are governed by boards of directors and management teams overseen by government ministries, according to the Bureau of State-Owned Enterprises. 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 sectors that include 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 and debt is not always transparently reported or adequately reflected in national budgets.

Privatization Program

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, Roberts International Airport, and the Liberia Petroleum Refining Company, but the government does not have an official privatization program.

Liberian authorities have not clearly defined responsible business conduct (RBC). The Liberia 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 unaware of RBC standards.  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.

Additional Resources 

Department of State

Department of the Treasury

Department of Labor

Climate Issues

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. In 2022, Liberia accepted the Green Shipping Challenge, pledging to seek emissions reductions in its role as the world’s second largest ship registry. 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, which is widely viewed as the primary reason Liberia’s democracy and economy is not strengthening, why few investors come to Liberia, why jobs are not being created, and why instability is a risk. 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, 2020, the United States Treasury Department sanctioned Liberian senator and prominent lawyer Varney Sherman for judicial bribery. On December 9, 2021, the 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. On August 15, 2022, the Treasury Department sanctioned the Minister of State for Presidential Affairs, Nathaniel McGill, the Solicitor General and Chief Prosecutor of Liberia, Sayma Syrenius Cephus, and the Managing Director of the National Port Authority, Bill Twehway, for ongoing public corruption. All three resigned from office. Liberians have strongly supported these sanctions and urged that more be done to hold public officials to account. The Liberia Anti-Corruption Commission (LACC) does not have the political support of the government and has rarely seriously pursued public corruption cases.
Foreign investors 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. Anecdotal reports indicate that foreign investors face instances of extortion and bribery by government officials at all levels. 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, and even long-established local and international NGOs report being extorted by government officials through the solicitation of bribes, threats to cancel employment and resident visas, and other unfounded legal allegations.
Liberia is signatory to the ECOWAS Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption, and the UN Convention against Corruption, but Liberia’s association with these conventions has done little to reduce rampant government corruption.

Resources to Report Corruption

Contact at government agencies responsible for combating corruption:

Baba Borkai, Program Manager for Enforcement and InvestigationLiberia Anti-Corruption Commission (LACC), Monrovia,  http://lacc.gov.lr/   bborkai@lacc.gov.lr 
Tel: (+231) 777-313131Email:  bborkai@lacc.gov.lr 

Contact at a “watchdog” organization (local or nongovernmental organization operating in Liberia that monitors corruption):

Anderson Miamen, Executive DirectorCenter for Transparency and Accountability in Liberia (CENTAL)Tel: (+231) 886-818855Email:  admiamen@gmail.com 

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 tampering, election violence, intimidation, and harassment of female candidates. Weah is seeking a second term in a presidential election scheduled for October 2023. It will be the first presidential election since the civil war without the presence of United Nations peacekeepers, and there are credible concerns that elections disputes and any attempts to illegally manipulate the outcome could lead to violence. Liberia currently ranks in the top five on a list of 35 countries forecast to experience increasing levels of violence over the next decade, according to the Global Peace Index’s 2022 report. Liberia’s relatively free media landscape has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates, and organized, usually 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. USAID’s 2022 Conflict Assessment adds that the rampant spread of polarizing media narratives has a heightened potential to threaten peace and political stability.

The United Nations Mission in Liberia (UNMIL) 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.

With a functional literacy rate of just under 50 percent, 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 to be formalized using a “one-stop shop” registration mechanism, but rollout has been slow. 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.

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. Some companies report extortion attempts by former employees and unions through this mechanism which, often with government backing, can intermingle frivolous claims and claimants with legitimate employment and pay disputes.

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.

In March 2022, the United Workers Union of Liberia, an affiliate of Industrial Global Union , signed a three-year collective bargaining agreement with ArcelorMittal Liberia , which mines iron ore. The agreement raised wages and education and housing allowances.

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.  The law sets the minimum daily wage at USD 5.50 for jobs in the formal sector and USD 3.50 in the informal sector. It also allows workers to bargain with employers for wages higher than the legal minimum. 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.

Liberia has ratified the International Labor Organization’s Equal Renumeration Convention and its Minimum Age Convention and submitted ratification documents to the organization in Geneva.

Liberia qualifies for U.S. International Development Finance Corporation (DFC)  project financing. DFC has more than USD 90 million in active commitments in Liberia, with eight clients as of February 2022, including USD 60 million to support lending to small and medium enterprises through the International Bank (IB) Liberia Inc  and the Liberian Enterprise Development Finance Company (LEDFC) . Lending has gone to commerce and trade, manufacturing, agro-processing, health, education, construction, services, food value chains, logistics, transportation, manufacturing, construction, imports and exports, and fisheries. USAID/Liberia currently has active portfolio loan guarantees totaling USD 6.1 million, with one Liberian commercial bank, Access Bank. DFC provides loan guarantees, and USAID provides a financial subsidy.

 

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount   Year Amount
Liberia Gross Domestic Product (GDP) ($M USD) 2021 $3.5 billion 2021 $3.5 billion https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=LR 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in Liberia ($M USD, stock positions) N/A N/A 2021 $525 million BEA data available at: https://apps.bea.gov/international/factsheet/
Liberia’s FDI in the United States ($M USD, stock positions) N/A N/A 2021 $614 million BEA data available at: https://apps.bea.gov/international/factsheet/
Total inbound stock of FDI as % host GDP N/A N/A 2021 5.5% UNCTAD data available at:

Foreign direct investment – UNCTAD Handbook of Statistics 2021

* Source for Liberia Data: World Bank and Central Bank of Liberia

Table 3: Sources and Destination of FDI
Data not available.

U.S. Commercial Service Contact InformationEmail:  Monrovia-Commerce@state.gov Phone: (+231) 77-677-7000

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Bureau of African Affairs Bureau of Economic and Business Affairs Liberia

On This Page

  1. EXECUTIVE SUMMARY
  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Business Facilitation
    4. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources 
    2. Climate Issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  14. 13. Foreign Direct Investment Statistics
  15. 14. Contact for More Information
2023 Investment Climate Statements: Liberia
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