Liberia: Liberia Sitting On 5.3 Percent of GDP in Lost Revenue, World Bank Warns

What the report says

The World Bank has warned that Liberia is losing the equivalent of 5.3 percent of GDP each year because of weak tax compliance, inefficient public spending and poor management of mineral revenues. The warning came Monday in Monrovia at the launch of the Liberia Public Finance Review 2026, according to the Liberian Investigator article distributed by AllAfrica.

World Bank Country Manager Georgia Wallen said the report should be read as an opportunity for Liberia to move from fiscal stabilization toward fiscal transformation. She praised recent steps that have reduced the fiscal deficit, lowered public debt and supported growth, but said the country still needs stronger domestic revenue if it is to finance major development priorities, including the ARREST Agenda for Inclusive Development.

The review points to a tax gap equal to about 3 percent of GDP and tax expenditures of roughly 5 to 6 percent of GDP, suggesting more revenue could be raised without simply increasing tax rates. Senior Country Economist Muhammad Waheed said the deficit narrowed mainly through spending cuts rather than durable revenue gains, and he highlighted the need for better compliance, audits and technology. He also raised concerns about mining revenues, low corporate tax contributions and a portion of gold production remaining outside formal channels.

Liberian officials said they agree with much of the diagnosis and outlined planned reforms, including changes to the Revenue Code, the introduction of VAT in January and a new tax expenditure regime by 2027. The report also flags weak capital spending execution, state-owned enterprise liabilities and climate risks as factors that could limit future gains.