Country Risk Rating

A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high. - Source: Coface

Business Climate Rating

The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.


  • Diverse natural resources (rubber, iron, gold, diamonds, oil)
  • Strong agricultural sector (30% of GDP) and forestry sector (11% of GDP)
  • Financial support from the international community
  • Substantial expatriate remittances (25% of GDP, fifth-largest recipient in the world)
  • Member of the Economic Community of West African States (ECOWAS)


  • Poor infrastructure
  • Dependent on commodity prices
  • Significant levels of poverty and unemployment, shortcomings in education and healthcare
  • Recent Ebola epidemic, which could reoccur
  • Recent and fragile democracy, high levels of corruption
  • Difficult business environment

Current Trends

Recovery is in progress but remains fragile

Since the Ebola epidemic in 2014, the country’s growth has been volatile. After being negative for two consecutive years, notably due to the impact of the COVID-19 pandemic in 2020, growth returned to positive territory in 2021 and consolidated in 2022. In 2023, the recovery will intensify despite the relatively slow pace of the vaccination campaign (in September 2022, only 46% of the population had been fully vaccinated). It will be driven by external demand for products from forestry, agriculture (rubber, rubberwood, cocoa, palm oil), and mining (iron, gold, and diamonds). With prices rising for these exports in 2022 and expected to drop but remain high in 2023, the country’s trade is set to benefit. Consumption will continue to rebound in 2022, but rising inflation and the recurrent threat of banknote shortages will likely pressure its contribution. Remittances will additionally support consumption flows from abroad, but also through the country’s improving vaccination campaign, after receiving 300,000 doses from the United States in 2021, as well as Chinese and French financial aid. Private investment should improve, mainly thanks to a new 25-year agreement reached with ArcelorMittal in September 2021, approving a USD 800 million extension of the Mineral Development Agreement signed in 2005. The deal covers the mine expansion, processing plant, rail, and port facilities. From 2023 onwards, it could allow for the annual delivery of between 15 and 30 million tons of iron ore, compared with five million tons previously. Public investment in infrastructure (notably transport and electrification) should continue its slow post-pandemic recovery.


Inflation will pick up in 2022 and remain high in 2023, interrupting the disinflationary trend that started in 2021. High commodity prices should continue to fuel inflationary pressures, despite the tight monetary stance (central bank policy rate at 20%).


Deficits financed by external aid

Chiefly burdened by a large trade deficit, the current account deficit will remain very high but relatively stable. In 2022, the prices of export products, mainly agricultural and mining, are expected to remain high, as are the costs of imported goods, especially oil, keeping the deficit at a relatively similar level. The trade deficit will be partially mitigated by a surplus in the transfer account, thanks to expatriate remittances and foreign aid. Services, and to a lesser extent, the primary income account, will post deficits, facing increasing profit repatriation by foreign companies. The current account deficit will be financed partly by FDI (8% of GDP), mainly by concessional multilateral loans. Foreign exchange reserves are precarious, projected to fluctuate around the 3-month of imports mark. Exchange rate volatility is expected: after its recent appreciation, a depreciation should follow, and reserves will be insufficient to compress to fine-tune fluctuations.


Despite rising mining revenues, the government deficit will remain significant in 2022 and 2023 due to the need to partially subsidize households for increasing living expenses. The effects of the domestic resource recovery strategy, which aims to increase budgetary revenues and minimize tax losses, will not be felt until 2023 as inflation abates. As part of the IMF ECF, the country has also committed to upholding debt rules, which include a reduction in domestic borrowing from the Central Bank of Liberia (CBL). Still, additional debt will be issued to fund the extra spending partially. Public debt will remain high but is expected to decline further in 2022. The external share of the debt makes up the lion’s share (70% of the total) and is almost exclusively multilateral and concessional, reducing the risk of debt distress.


The pandemic undermines George Weah’s administration

The election of former footballer George Weah in 2017 represents the first peaceful democratic transition in a country marked by two successive civil wars (1990-1997 and 1999-2003). Through his Pro-Poor Agenda for Prosperity and Development (PAPD), President Weah has affirmed his desire to remedy the lack of infrastructure, reduce poverty, promote access to essential public services, and fight corruption. However, the criticized management of the COVID-19 crisis (numerous lockdowns, weak health services, etc.), as well as corruption cases and social unrest linked to the context of poverty and mass unemployment, aggravated by growing imported inflation in the food and energy sectors, are weighing on the President’s popularity. Political and social stability may well be tested in the run-up to the presidential elections scheduled for October 2023 due to widespread criticism of the George Weah administration. Despite persistent social tensions, the absence of significant opposition following the dissolution of the main opposition alliance (the Collaboration of Political Parties) in February 2022 is expected to bolster the re-election of the Congress for Democratic Change (CDC) led by George Weah.


Coface (09/2022)