Monday, April 23, 2007

Liberia economy 'to grow by 11%

Workers at a rubber plantation in Liberia's capital Monrovia

Liberia's economy is projected to grow 11% a year on average over the next five years, according to the International Monetary Fund (IMF).

Reconstruction projects and foreign investment are seen boosting growth through 2012, as will a revival in mining, forestry, and agriculture.

The West African nation was hurt by years of civil war, and running water and electricity are still scarce.

To aid recovery Liberia must cut debts of almost $4bn (£1.9bn), the IMF said.

"Liberia's economic recovery continues to strengthen, and medium-term prospects have improved," the IMF said after a team visited Liberia earlier this month.


The IMF has estimated that Liberia's gross domestic product (GDP) growth grew by an estimated 7.8% last year with a similar growth rate expected for 2007.

That pace of expansion will pick up because of an expected revival of mining, forestry and agriculture, and push growth up to an average of 11% between 2008 and 2012.

A key part of this recovery will foreign investment by firms such as steel giant Arcelor Mittal, which is building a $1bn iron ore mine and is also investing in a new railway and the helping to upgrade port facilities in the country.

President Ellen Johnson-Sirleaf is a former World Bank economist who took over the task of rebuilding Liberia, which was once the world's fifth biggest iron ore exporter, a year ago.

One of the biggest tasks for President Sirleaf will be to reduce the amount of foreign debt weighing on Liberia's fragile economy, the IMF said.

Liberia was founded by black slaves who were freed from the US in 1847 and Washington has supported the nation's efforts to clear the $1.5bn it owes to the IMF and the World Bank.

Once it has managed to reduce the money it owes, it can make further inroads by qualifying for international debt relief, analysts said.

Link to BBC NEWS | Business | Liberia economy 'to grow by 11%