2021 Index of Economic Freedom

Liberia

OVERALL SCORE49.2
WORLD RANK164
Rule of Law

Property Rights29.5

Judicial Effectiveness40.4

Government Integrity27.0

Government Size

Tax Burden85.8

Government Spending68.3

Fiscal Health54.3

Regulatory Efficiency

Business Freedom48.9

Labor Freedom41.4

Monetary Freedom58.5

Open Markets

Trade Freedom60.8

Investment Freedom55.0

Financial Freedom20.0

Create a Comparison Chart

See how Liberia compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 4.9 million
  • GDP (PPP):
    • $6.3 billion
    • -2.5% growth
    • -0.1% 5-year compound annual growth
    • $1,487 per capita
  • Unemployment:
    • 2.8%
  • Inflation (CPI):
    • 27.0%
  • FDI Inflow:
    • $137.8 million

Liberia’s economic freedom score is 49.2, making its economy the 164th freest in the 2021 Index. Its overall score has increased by 0.2 point, primarily because of improvements in government integrity and labor freedom. Liberia is ranked 42nd among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.

The Liberian economy remains in the repressed category for a third year, having fallen from the ranks of the mostly unfree in 2019. To make the jump over that hurdle, the government would have to implement deep and comprehensive reforms to strengthen the rule of law as measured by the Index scoring indicators for property rights, judicial effectiveness, and government integrity.

IMPACT OF COVID-19: As of December 1, 2020, 83 deaths had been attributed to the pandemic in Liberia, and the economy was forecast to contract by 3.0 percent for the year.

Close

Background

Settled in the 18th century by freed slaves, predominantly from the United States, Liberia enjoyed relative peace until a long and bloody civil war that ended in 1995. Rebel leader Charles Taylor was forced to step down as president in 2003 and was later convicted of war crimes. Ellen Johnson Sirleaf became president in 2006 and stabilized the country during her two terms. Former soccer star George Weah won an election in 2017 that was marred by allegations of fraud. A protest group, the Council of Patriots, has periodically mobilized street demonstrations against Weah, decrying corruption and economic underperformance. Although Liberia is rich in natural resources, including rubber, mineral resources, and iron ore, poverty is widespread.

Rule of LawView Methodology

Property Rights 29.5 Create a Graph using this measurement

Judicial Effectiveness 40.4 Create a Graph using this measurement

Government Integrity 27.0 Create a Graph using this measurement

Property rights are not strongly protected, and the process for enforcement of contracts is lengthy. Less than 20 percent of land is registered. Conflicting land ownership records are common. Rule of law is uneven. The judiciary is independent but weak and inadequately resourced. The government functions poorly because of inadequate administrative capacity, a precarious physical security environment, and pervasive corruption.

Government SizeView Methodology

The top individual income and corporate tax rates are 25 percent. Other taxes include property and goods and services taxes. The overall tax burden equals 12.9 percent of total domestic income. Government spending has amounted to 32.5 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.1 percent of GDP. Public debt is equivalent to 46.2 percent of GDP.

Regulatory EfficiencyView Methodology

The costs involved in starting a business, obtaining electricity, and dealing with construction permits have decreased, but the business climate remains tainted by corruption. The labor force participation rate climbed in 2019. The Liberian government influences the prices of many basic goods, and there are no plans for privatization of state-owned enterprises.

Open MarketsView Methodology

Liberia has one preferential trade agreement in force. The simple average tariff rate is 12.1 percent, and three nontariff measures are in effect. Some nontariff barriers have been dismantled, but a lack of transparency persists. Foreign investment in several sectors is restricted, and foreign investors may not own land. The overall financial system is underdeveloped, and much of the population remains outside of the formal banking sector.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
See Entire Region List ›

View all countries ›

Back to Top