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  • Writer's pictureMarie S.

Analyzing the Sustainability of Liberian government Is The Major Employer



Public sector employment plays a critical role in Liberia's economy, as the government is a major employer, and many citizens rely on public sector jobs for income. Given the dependency on public sector employment, analyzing the sustainability of this model and the potential for private sector growth to reduce unemployment is a valuable area of inquiry.


The Liberian economy experienced an expansion of 4.8% in 2022, despite global challenges such as the war in Ukraine, high global inflation, and depressed demand in advanced economies. The expansion was primarily driven by growth in the mining and agriculture sectors. Growth in the agricultural sector accelerated to 5.9% from 3.3% in 2021, and industrial output grew by 10.4% in 2022 due to increased gold production. In contrast, growth in the services sector slowed to 2.8% from 3.0% in 2021[​1]


Despite the overall economic growth, the government's fiscal position worsened in 2022, with the deficit rising to 6.9% of GDP, up from 2.4% in 2021. This increase in the deficit was partly due to lower-than-expected royalties from iron ore, expenditure overruns on goods and services, and transfers and subsidies​2​. The sustainability of the current model of public sector employment is therefore challenged by the fiscal pressures facing the Liberian government.


However, there are opportunities for private sector growth that could alleviate dependency on public sector employment. The International Finance Corporation (IFC) has a committed investment portfolio of $16 million and an investment pipeline of $40 million across the Financial Institution Group, Manufacturing, and Agribusiness. Additionally, the IFC has a $6 million donor agreement with the Swedish International Development Corporation Agency (SIDA) to implement advisory programs aimed at improving the business climate and unlocking investment opportunities. The IFC Liberia advisory program focuses on agriculture value chain development, improving access to finance, business climate reform, and trade​3


The World Bank Group's Country Partnership Framework (CPF) for Liberia also places emphasis on boosting private sector development, including support for commercial agriculture and the development of micro, small, and medium enterprises. The CPF aims to strengthen institutions and create an enabling environment for private sector growth through transparency and accountability in the public sector​4


While the Liberian government continues to play a vital role as a major employer, the sustainability of public sector employment is challenged by fiscal constraints. However, efforts by international organizations such as the IFC and the World Bank, as well as government initiatives to promote private sector development, provide an opportunity to reduce dependency on public sector employment, generate employment opportunities in the private sector, and support overall economic growth in Liberia.


The Liberian government is a major employer, and many citizens rely on public sector jobs for income. In 2021, the public sector employed 148,000 people, or about 12% of the total labor force. This is a significant number, and it suggests that the Liberian government plays a major role in the country's economy.


There are a number of reasons why the Liberian government is such a large employer. First, the country is still recovering from a civil war that lasted from 1989 to 1996. The war caused widespread damage to the country's infrastructure and economy, and it led to a decline in private sector investment. As a result, the government has had to step in to create jobs and provide essential services.


Second, the Liberian government has a large social safety net. This includes programs such as free education, free healthcare, and food subsidies. These programs are funded by the government, and they provide a safety net for the poor and vulnerable.

Third, the Liberian government is involved in a number of economic activities. This includes providing infrastructure, such as roads and bridges, and regulating the economy. The government also owns a number of businesses, such as the Liberia Petroleum Refining Corporation (LPRC).


The large size of the public sector has a number of implications for the Liberian economy. First, it means that the government is a major source of employment. This can help to reduce unemployment and poverty. Second, it means that the government has a large impact on the economy. This can be both positive and negative. For example, the government can use its spending to stimulate the economy. However, it can also use its spending to crowd out private investment.


The Sustainability of the Public Sector Employment Model

The sustainability of the public sector employment model in Liberia is a matter of debate. Some argue that the model is unsustainable, as it is too expensive and it crowds out private investment. Others argue that the model is necessary to provide jobs and essential services.

There are a number of factors that will affect the sustainability of the public sector employment model in Liberia. These factors include:

  • The pace of economic growth. If the economy grows rapidly, it will create more jobs in the private sector. This will reduce the need for the government to create jobs.

  • The efficiency of the public sector. If the government is able to run the public sector efficiently, it will be able to provide more services with fewer resources. This will make the model more sustainable.

  • The political will to reform the public sector. If the government is willing to reform the public sector, it can make the model more sustainable. This could include measures such as privatizing state-owned enterprises and reducing the size of the civil service.

The Potential for Private Sector Growth to Reduce Unemployment

The private sector is the engine of economic growth. It creates jobs, generates income, and provides goods and services. In Liberia, the private sector is relatively small, and it has not been able to create enough jobs to keep up with the growth of the population. This has led to high unemployment, particularly among young people.

There are a number of factors that are hindering private sector growth in Liberia. These factors include:

  • A weak infrastructure. Liberia's infrastructure is underdeveloped, which makes it difficult and expensive to do business. This includes roads, electricity, and internet access.

  • A high cost of doing business. The cost of doing business in Liberia is high, due to taxes, regulations, and corruption.

  • A lack of skilled workers. Liberia has a shortage of skilled workers, which makes it difficult for businesses to find the workers they need.

The government can play a role in promoting private sector growth. This could include measures such as:

  • Investing in infrastructure. The government can invest in roads, electricity, and internet access. This will make it easier and cheaper for businesses to do business.

  • Reducing the cost of doing business. The government can reduce taxes, regulations, and corruption. This will make it easier and cheaper for businesses to operate.

  • Investing in education and training. The government can invest in education and training to create a skilled workforce. This will make it easier for businesses to find the workers they need.

By addressing the challenges facing the private sector, the government can help to promote private sector growth and reduce unemployment. This will be essential for Liberia's economic development.


Liberia Overview: Development news, research, data | World Bank


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