General
Source: UNDP
Liberia could experience negative GDP growth for the first time since the war ended 11 years ago unless urgent action is taken to stimulate the economy.
Liberia was one of the fastest growing economies in the world last year, but recent projections show that the country's growth could be going backwards in 2015.
When ebola hit the country, the toll on the economy was immediate. Wealthy Liberians with dual citizenship fled the country, taking their purchasing power with them. State of emergency was declared, and restaurants and bars had to close at 6 pm. Fearing infection, people stopped visiting hairdressers and clothing shops. Mining companies slowed or stopped operations, and suppliers to the industry lost their incomes. Small businesses around the country had to close, and hundreds of thousands of people are now out of work.
According to UNDP economist Janice James, the ebola crisis has permanently destroyed livelihoods for thousands of people. "79 percent of Liberia's workforce is in the informal sector. Farmers, market sellers and hunters make up much of this informal workforce and have jobs that are precarious under normal circumstances.. Now, with ebola many have been driven out of business, and are relying on their savings to buy food. They're losing the capital they will need to start up a business in future."
Bomah Kollie, Superintendent of Waterside market in Monrovia, said that ebola had hit hard. "We know of 21 deaths in just one area of the market – there are many more. The biggest problem is that people stopped coming – they were afraid and just stayed at home."
Morris Moore runs a tailoring business at Waterside market specializing in school uniforms. With the ebola crisis, schools have been closed since September, and Morris is struggling to get enough work for him and his employees. "Even if schools open again, a lot of parents have lost their businesses and won't be able to afford school fees or school uniforms."
Ms James, another shop keeper, said that the biggest shocks to the economy are in the service industries, retail and agriculture. "Liberia has around 15,000 people who previously made their living hunting bushmeat. Thousands more made a living drying and selling the meat. Now that bushmeat has been banned, these people have lost all their income."
"With the middle classes gone, no-one can afford to buy things like electronics, furniture and luxury goods, forcing retail shops to close. People are just buying basic commodities like rice and vegetables, items which have very low margins," she adds.
The impact on government resources has also been devastating. Tax revenue is down 18 percent this year, and trade has declined by around 15 percent for 2014. Alcohol sale generates the highest import tax rates, but with the bars closed for several months there's been no demand. Imports and exports have become problematic – companies trying to bring ships into the port have faced drastically increased insurance costs.
There are however signs of hope and the Government of Liberia is determined to stop the backward slide with UNDP support. The rainy season is now over, and farmers are being encouraged to start planting again. Investments are being made in roads and construction, industries that create jobs and opportunities for suppliers. Mining companies have started their operations again and will be exporting minerals in the coming months. Thousands of foreign workers have also arrived in the country, which is giving a big boost to the service sector.
UNDP is supporting the government in several ways to avoid the economic downspin. It works with the Ministry of Health to ensure health workers are paid on time and to recruit thousands of community workers to identify ebola cases. UNDP has also provided the Ministry with logistical support – cars, motorbikes, personal protective equipment, radios and other goods as needed. UNDP will also channel funds to the poorest Liberians through social safety nets to help them get back on their feet.