ere are highlights of the Liberia draft budget. To dive into the budget for details, click here to access a copy
The first Line Chart shows GDP per capita calculated in the US dollar. Less per capita means the country is poor or brook. When you’re poor, you become susceptible to bankruptcy-you consume more than you produce. You also lose the power to better negotiate loans and business deals. Results. You accept any terms to get loans and end up paying a high-interest rate that may further impoverish the country in the long run. In addition, foreign businesses will avoid investing in certain sectors. And if they do, they sell at high and unavoidable prices to most consumers. With a price hike or inflation, people’s disposable income continues to dwindle. Prolonged inflation leads to agitation, frustration, a demonstration against the government. The effects of galvanizing against the government and manifesting grievances through demonstration have the potential to threaten democracy, stability, and the possibility of economic growth shortly and in the long term.
The second graph shows how the economy has grown over time and what we should expect in 2024. The Table summarizes the allocation of the money to various sectors. We noticed that a whopping 39 percent of the total budget of 708,518,313 million dollars in the US goes to Public Administration, 1% to agriculture, and 11% to education. With a low per capita income projected to be $593 lower than 2018’s, unless the country acts quickly to invest more in education and agriculture, reduce the imports of food by encouraging and boosting agricultural outputs, and bring the prices of the basic stable food such as rice down, the history of the infamous April 11 Rice Riot may repeat itself.
Let’s emphasize to all readers that while demonstrations are one of the legitimate ways to harry obdurate governments, to regain the consciousness about the welfare, protection, and freedom of the people they serve they are not meant to destabilize institutions of government or devour personal and public properties.
The low access to internal markets because of poor road conditions has morphed into rising in the price of food and weakening the Liberian currency. Contrary to the anti-inflationary GDP growth rate of 2% and 3%, Liberia’s growth rates continue to plummet from 0.0, -o. o4, -0.02, 0.00, 0.07, to a negligible rate of 0.06 in 2018, 2019, 2020, 2021, and 2023, repetitively. In order words, the rate by which the country can grow to reduce inflation, hyperinflation, and high employment is disappointing. And with this low growth rate, encouraging foreign direct investment will be a tough call. It will make the country weak in negotiating a loan and susceptible to unscrupulous business practices and widespread corruption.
An additional 9% investment in agriculture of the total budget draft will drive research efforts in agriculture, continuing vocational training, providing large and diversified agricultural production, and guarantee an adequate standard of living through price stabilization of basic agricultural commodities.
It’s good to be reminded that the agricultural sector is at the heart of Liberian economic development. Over 90% of the rural population depends only on farming to eat. If the Government can invest more than the bare minimum of 1% in this sector compared to a whopping 39% of its projected draft budget to Public Administration, the country can reduce its food imports and increase its exports of wheat or rice.