The Liberian National Budget 2006-2020: Looking Beyond Numbers


By Boima S. Kamara and Dehpue Y. Zuo


The national budget is the instrument through which a government allocates resources with a view to, among others, uplifting underserved segment of the population, facilitating inclusive growth for shared prosperity, mitigating regional disparity, and enhancing the provision of basic social services. National budget is an instrument used to gauge the performance of any government (Robinson and Last, 2009; Jacob, Helis and Bouley, 2009). A well-planned budget is of paramount importance for any government to ensure improved efficiency and effectiveness of public expenditures that engender economic stability and growth. As such, this article seeks to assess the Government of Liberia’s national budget performance over the 15 years spanning 2006 to 2020; highlight areas of focus, mainly recurrent and capital expenditures, and what needs to be done to strengthen  sources of economic growth with emphasis on domestic resource mobilization (Jacobs, 2010).

Budgeting Process and Structure Since 2006

Liberia’s budgeting process goes through four cycles: preparation, approval, implementation, and evaluation, which are anchored on the constitutional mandate of the governing system. The Executive is responsible for preparation and implementation while the Legislature is solely responsible for approval and evaluation (PFM Law, 2009; Lienert, 2010). In 2006, the government inherited a budgeting system that lacked the capacity to link policy making, planning, and budgeting that reflect expenditure control to spur economic growth. The Public Financial Management Act of 2009 provided robust framework for the management of budget and all national resources with clear roles and responsibilities for key branches of government. It clearly defines the budgeting process including borrowing, public debt and management of aid to Liberia. The PFM Law of 2009 also provided the legal basis for the eventual introduction in 2012 of the Medium-Term Expenditure Framework (MTEF) budgeting system, which links policy priorities to medium term expenditure for sustainable socioeconomic development and growth of the economy.   

Budgetary Performance 2006 to 2020

A thorough review of the various national budgets of the Government of Liberia published by the then Bureau of Budget, and now, Ministry of Finance and Development Planning (MFDP) was carried out. During the 15-year period, the size of the national budget moved from US$80.50 million in 2006 to US$535.63 million in 2020, amounting to a cumulative total of US$6.12 billion. Of the total revenue generated, tax revenue accounted for about US$4.44 billion (or 72.48%); non-tax revenue, US$0.68 billion (or 11.14%); external grant, US$0.72 billion (or 11.70%); and contingency, US$0.29 billion (4.69%).

It is important to point out that revenue performance of an economy is directly correlated to the level of economic activities underpinned by the level of political stability and openness of trade and investment. The higher economic growth is, the higher revenue generated will be. For the reviewed period, real GDP grew from a low of US$1.20 billion to around US$2.2 billion (nominally, around a high of US$3.30 billion). This growth was driven mainly by Liberia’s continued reliance on commodity exports, iron, rubber, and diamond; an economic model that continues up till now and explains why in 15 years as an economy, Liberia’s annual real GDP could not exceed more than US$2.5 billion.; showing up in revenue collected not being able to grow to US$700.00 million in 15 years (i.e., the size of the National Budget during the 15-year period never reached  US$700.00 million including the current FY20/20 and associated medium term, MTEF’s forecasts).  A comparison of Liberia’s performance with Sierra Leone[1] and Rwanda[2] for the same period shows that  Real GDP in Rwanda grew from a low of US$5.93 billion to a highest of US$10.17 billion, averaging US$8.61 billion in real economic performance and US$1.63 billion on average in revenue performance; Sierra Leone, from a low of US$1,267.75 billion to a high of US$2,361.51 billion averaging US$1,764.48 billion in real GDP and averaging US$559.15 million; while, Liberia moved from a low of US$1.20 billion to a high of US$1.80 billion, averaging US$1.50 billion in real GDP and with an average of US$408.33 million in revenue collection for the same period.

It is good to point out that over the period of 15 years, Liberia’s economic activities generated a total of US$22.5 billion in real GDP with US$6.12 billion in revenue collection; Sierra Leone, US$28.23 billion and US$8.95 billion; and Rwanda, US$129.95 billion and US$24.39 billion, respectively. Rwanda outpaced both Liberia and Sierra Leone by more than 3 times in both real GDP and revenue generation. The difference lies mainly in significant public sector investments in roads and electricity as well as the diversification of the Rwandan economy. The data shows that of the total of US$6.12 billion revenue generated over the 15-year period, Liberia’s recurrent expenditure stood at US$5.68 billion and capital expenditure, US$0.56 billion[1]. During this same period, Rwanda invested US$6.39[2] billion, especially on electricity, roads, ICT and air transport; and at the same time received US$4.2 billion as international community support to capital projects through direct budget support.

The table below shows Liberia’s national budget by economic classification (FY05/06 to FY19/20):

Liberia: National Budget by Economic Classification (In Millions of US$)

Total Revenue6,124.88% Share
     Tax Revenue4,439.4172.32
     Non-Tax Revenue682.1011.20
     External Grants716.3611.77
     Contingency (Loan/Cash b.Forward/Contingency Revenue)287.014.71
Total Expenditure6,124.88 
     Compensation of Employees2,733.9744.64
     Use of Goods and Services1,542.1225.18
     Consumption of Fixed Capital560.809.16
     Interest and Other Charges35.070.06
     Subsidy and Transfers258.144.21
     Social Benefits12.300.20
     Non-Financial Assets90.241.47
     Domestic Liability115.261.88
     Foreign Liability60.620.99

  Source: Authors’ computation based on national budgets data from 2005 to 2020[3]

In concluding and recommending, we wish to point out the following:

Liberia’s growth was driven by political stability characterized by confidence in governance, trade, and investment.  The revenue side of the budget shows that in 15 years, revenue generation did not climb to US$700 million; averaging U$408.33 million.

The expenditure side of the national budget during the period shows that compensation of employees and goods and services accounted for about 70% of public expenditures with 45% and 25%, respectively. It is interesting to note that less than 10% of the expenditures went into consumption of fixed capital, the fulcrum of capital investment that could accelerate growth of the economy; less than the international community support through external grant expenditures  of 716.4 million or 11.70 percent.

Economic diversification with intentional investments in roads, electricity, ICT, and human capital transformation will be the surest way to widening the tax base. It is important to note that improving domestic assets accumulation will help to spur growth in domestic revenue mobilization.

We must challenge ourselves to think outside of the box. The current 3-year Medium Term Expenditure Forecast (MTEF) prepared by the Ministry of Finance and Development Planning (MFDP) as reflected in the FY2020/21 national budget indicates revenue generation will not  rise above US$600 million, This would mean the following: a stagnation in commodity-export growth for the last 5 years as a reliance for domestic revenue generation; being trapped for the next 3 years with low revenue capacity to meet growing expenditure pressures; and being poorer as nation relative to 15 years ago when adjusting for inflation given a rapid rise in inflation accompanied by slow growth in revenue not equaling or exceeding  US$700 million. Remaining on track with a Liberia-IMF ECF Program is a necessary condition to advance us towards our developmental goals, but it is not sufficient[4] as a stand-alone policy. To achieve our development goals, the Government will have to also ensure good governance, improved business-investment climate, transparency and accountability on one hand as the soft-side, low-hanging fruits; and, on the other hand, strategic material investments in roads, power, and human capital transformation as the hard side to do the heavy lifting of economic transformation.

[1] The introduction of Public Sector Investment Project (PSIP) as a capital expenditure line item started during FY11/12 fiscal year. Before this time, capital expenditure as a line item was ambiguous; sometimes you will see” capital investment” and another time, “consumption of fixed capital” under expenditure by Economic Classification.

[2] For Rwanda, the national budgets from 2006 to 2020 clearly captured CAPEX, totaling US$6.39 billion

[3] This article focused on cash-based budgeting. The next article will investigate issues of budget surplus/deficit and deficit financing

[4] The June 1, 2020 GoL Letter of Intent (LOI) to the IMF asserts an ECF Program as a sufficient condition

[1] For Sierra Leone, the dataset was collected from IMF Country Reports 2006 to 2012; and Ministry of Finance of Sierra Leone Website Budget Profile FY12-16 and FY17-20. Fiscal data are indicative for comparison purpose as Liberian and Rwanda have the same fiscal-year period, while Sierra Leone’s fiscal year is on a calendar year basis.

[2] Dataset for Rwanda came from the National Institute of Statistics of Rwanda 2019 Publication on Macroeconomic Aggregates and the Ministry of Finance Annual Economic Review, FY2008-2019 and Annual Budget Execution 2005-2016.


  1. Yeh, yeh, yeh. Very impressive expertise, in theory that is, or not until the rubber hits the road. Is this the same Kamara who served as minister of Finance and Development Planning of Liberia in the Ellen administration? Maybe a second chance might do the trick. Meanwhile, scores of hapless citizens continue to perish year in, year out and needlessly, while we continue to theorize or sing these redemption songs. Oh well.

  2. The concluding paragraph seems to caution that bleak times would continue in the next three years (for poor people) should national budget remain under US $600 million. It isn’t good news for a CDC Coalition which re-election relies on widening the tax base through revenue generation including ensuring a sense of stability (security sector) for domestic and foreign investments. Time will tell whether the leadership appreciates the gravity of Liberia’s economic situation as captured in this cogent comparative budgetary analysis.


    Government of Liberia to Experience Huge Deficit of US$41 Million

    Monrovia – FrontPageAfrica has reliably gathered that government is experiencing a deficit of US$41.81 million – the biggest in the 11-year leadership of President Ellen Johnson Sirleaf.

    “The implication this has for the next Government is that they will be starting from negative cash balance in bank with huge debts to repay.

    This could cause several donors to pull additional funding from the Government because they can no longer trust the Government to be fiscally responsible.” – Financial Expert

    The Ministry of Finance and Development Planning (MFDP) has not commented on the issue despite inquiries made by FrontPageAfrica.

    As seen from a reconciliation report in our possession, there is a possibility of President Sirleaf leaving the next Government with a significant domestic debt.

    Financial experts have linked the huge deficit to poor fiscal stewardship of the economy.

    “Former Minister Amara Konneh was noted for the constant budgetary shortfall, but at no time did we experience such a huge deficit under his regime.

    This could probably be the result of poor economic management,” an expert told FPA.

    FPA further gathered from the experts that the government has been running a balanced budget.

    This means the Government will only spend money when it collects and by the end of each fiscal period, the books should be balanced or at least small surplus or very small deficit.

    “Running a US$42 million deficit can only be termed as reckless and irresponsible fiscal management,” the expert further told FPA.

    Review of preliminary numbers available to us indicates that the government is poised to collect the same US$525 million or thereabout as it was in other fiscal years and but it remains a mystery why the government would experience such huge loss.

    “The implication this has for the next Government is that they will be starting from negative cash balance in bank with huge debts to repay.”

    “This could cause several donors to pull additional funding from the Government because they can no longer trust the Government to be fiscally responsible,” the financial expert told this paper.”

    Some employees within the MFDP who spoke with this paper on the basis of anonymity said the deficit is a result of “dangerous spending”.

    Such spending under the current IMF program, according to expert, is not permitted as the government is only to spend what it collects.

    “On this one, there is no room to blame those who ran the ministry before because this is a matter of spending only what you collect and so it has nothing to do with what happened in the past.”

    “It is just plain irresponsible to be spending money that you don’t have.”

    “Even in our personal lives, there is a limit to running a deficit so how can our Government, especially in these last days, be running such huge deficit?” the expert rhetorically asked.

    FrontPageAfrica has not able to go into the details and complexities of the problems, but the staff of the ministry indicated that the minister has no interest in fiscal management, unlike his predecessor who held weekly Financial Management Team (FMT) meetings to look at the entire picture of the economy and make decisions on spending.

    That FMT meeting, FPA was informed, brought the technicians together in one room to look at the revenue picture, the allotment, and then the disbursement.

    By this meeting, the necessary decisions were made on what to fund and what not to fund so that Government did not run a deficit. The staff informed us that the current minister has absolutely no interest in doing such thing.

    Staffs at MFDP also accused the Minister of not consulting many of his staffs on decision making based on his conviction that many of the staffs there are corrupt.

    FPA was further informed that the Deputy Minister for Budget is no longer responsible to allotments as Minister Kamara has taken that responsibility unto himself.

    FrontPageAfrica has, however, not been able to verify this information.

    “In the past, when a request came from the President or another cabinet minister, the Finance Minister will send the request to the Budget Minister who will then seek the advice and analysis of the technical staff responsible before a decision can be made, but now things are different.

    The Minister is not law and gospel. In some cases, the boasts that he has divine power and understanding so when God speaks then he makes decision,” another staff told this paper.

    The minister also stands accused of taking money from various donor projects under the Project Financial Management (PFM) Unit to fund the expenses of Government.

    “Now, because those funds are intended for specific projects, if the Government is not able to return those funds to those accounts, those projects will be at risk and donors could pull back their funding to those projects and future projects,” an insider said.

    “This situation needs to be brought under control immediately because this singular event has the propensity to rewrite the history of her administration,” the financial expert who is an insider at the MFDP told this paper.

    The reconciliation report further shows that the Government has raised approximately US$525 million in revenue but have paid US$3 million to ECOWAS as trade levy (ETL) so therefore the net revenue collected for FY16/17 is about US$522 million.

    Additionally, the report shows that Government has borrowed nearly US$39 million from the CBL and also took another US$27 million from various project accounts, some of them being World Bank project intended for special use. It means that those projects will be stalled because their monies have been used by the central Government on something else.

    At the moment, our sources inform us that in spite of the huge deficit, the Minister is still making efforts to ensure that additional US$4 million is paid to the contractor working on the Executive Mansion, while another US$6 million should be paid to George Haddad’s Prestige Motor.

    If these amounts are added, it will carry the potential deficit to US$50 million.

  4. An interesting analysis to read indeed!
    Ever since this article was published on December 18, 2020, I expected it to be polemical and so I bookmarked it to read all the comments.
    I have expected critical analyses from critiques of the government and the usual insults / vituperations from CDCians (their inborn tendency). Strangely, we have been able to read a single critical analysis or intuitive presumption (from Mr. Moses) and the usual vain and unproductive insults from Garsuah.

    However, allow me to first congratulate Mr. Kamara and Mr. Zuo for their constructive criticism which should serve as an impetus to any administration claiming to bring fixes to “a broken system” they claim to have inherited.
    Allow me to paste the 3 key paragraphs that CDCians should contemplate if they really came to help Liberia or “bring fixes”:
    [It is important to point out that revenue performance of an economy is directly correlated to the level of economic activities underpinned by the level of POLITICAL STABILITY and OPENNESS OF TRADE AND INVESTMENT. The higher economic growth is, the higher revenue generated will be.]

    [Economic DIVERSIFICATION with intentional investments in roads, electricity, ICT, and HUMAN CAPITAL TRANSFORMATION will be the surest way to widening the tax base. It is important to note that improving domestic assets accumulation will help to spur growth in domestic revenue mobilization.]

    [To achieve our development goals, the Government will have to also ensure GOOD GOVERNANCE, IMPROVED BUSINESS-INVESTMENT CLIMATE, TRANSPARENCY AND ACCOUNTABILITY on the one hand as the soft-side, low-hanging fruits; and, on the other hand, strategic material investments in roads, power, and human capital transformation as the hard side to do the heavy lifting of economic transformation.]

    To add my voice to what these gentlemen have said, CDCians, know that the acceptable percentage for a wage bill in a state budget is 5 to 15%.
    Given the postwar situation in which we find ourselves, we should not surpass the 20% threshold.
    Use your brains to create wealth, my people! You promised FIXES, it should start with providing jobs for the people.

    Also, it is VERY STUPID for tax revenue to represent 72% of our total revenue. It needs to oscillate between 15 to 25%. We should create and generate internal revenue at about 80% and depend on grants at maximum 10% or minimum 5%.

    We should equally learn to constitute reserves for the future. We should not consume all that we earn in a year. Make sure to reserve 20% or at least 10% of annual revenue generated. This should be a national policy. It is stupid to spend more than what we earn.

    CDCians, we encourage you to join the ANC for us to move our country on the right course together. You do not have the required leadership and human capital to deliver on any sustainable development plans in Liberia. A constant annual budget of half a billion dollars, of which 70% is spent on wage bill and 20% to service debts, can NEVER develop Liberia, even if you are given 50 years.
    Guys, close your eyes and park Weah in the garage in 2023 if you really love Liberia. We need to develop our country and our lives. Weah is a BIG impediment!

    Happy New Year to all CDCians who heard me with an open and critical ear!


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