Liberia’s Development Conundrum – some of the issues

We looked at the numbers this morning again and all we could do was laugh. We are harmonizing payroll and trying to fit within our domestic resource envelop. It is my understanding that our payroll is approximately 11% of GDP (maybe about 65% of our total annual budget) and this is too high, by economic index. I don’t disagree because “they” say that we are the highest in the sub-region and this is bad. There have been times when I have asked them about the nominal numbers. Sometimes the indices are misleading and the truth story might be in the nominal figures. When the base is small, some very small numbers can represent a higher percentage of that small base.

But be that as it may, I think we need to look deeper. There are some fundamental questions that we need to answer in order to arrive at some workable solutions. Can our country develop and achieve the transformation we are looking for on the basis of domestic revenue? In my honest opinion the answer is NO. However, if we make the necessary investments in the infrastructure (power, ports and roads), we might be able to expand the economy and then raise the resources we need to transform. But how do we make the investment? And without the investment, the base will not enlarge.

For example, the report (Africa Infrastructure Country Diagnostic) by Vivien Foster in 2010 clearly highlighted Liberia’s infrastructural deficit and proposed that we needed to invest at least US$250 to $500 million per year for the next decade in order to be able to catch up with other countries. At that time, it was estimated that we were spending US$90 million per year and under such condition, it would take us 40 years to get there. (https://openknowledge.worldbank.org/bitstream/handle/10986/27770/623900WP0P12420ry0report0Image0Bank.pdf?sequence=1&isAllowed=y)

I am not sure but if we are operating on a US$500 million per year budget and we are paying about US$300 million on salary and then have to run the regular operations of the government, how we can cure the infrastructural deficit? And if we don’t cure the infrastructural deficit, how we can transform this place?

Let’s think about it. I am sure the Economic Dialogue will provide some answers…

Author: JAMES F. KOLLIE

I am a Liberian professional with passion for pro poor economic development and grassroot political organizing. I have read public policy, corporate finance and accounting at various levels. I have worked in government, private sector and non-profit sector. View all posts by JAMES F. KOLLIE