Economics

What Are The Biggest Industries In Liberia?

Rubber processing is a major industry in Liberia.

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Liberia is an independent state that is situated in West Africa. Liberia is bordered by the Atlantic Ocean, Ivory Coast, Guinea, and Sierra Leone. Liberia occupies an area of about 43,000 square miles and has a population of about 4,900,000 people. Monrovia is the largest and capital city of Liberia. The country started as a settlement for the American Colonization Society (ACS), which believed that blacks would have better chances of prosperity and freedom in Africa than in the United States. Over 15,000 free-born and freed black individuals who faced legislation limits in the US were relocated to Liberia from 1822 to 1862. Liberia declared independence in 1847 under President Joseph Jenkins Roberts, and the United States government recognized Liberia’s independence in 1862. The country thrived with the United States investing heavily in Liberia until the political tension of 1980, which resulted in a military coup. Currently, Liberia is ranked among the poorest states in the world with its economy being highly underdeveloped, due to the civil war that lasted from 1989 to 1996. Liberia is richly endowed with forests, minerals, water, and favorable weather conditions for agriculture, but poor infrastructure and human capital. The largest industries in the nation are forestry, mining, energy, and communications.

Forestry

Rubber and timber have been the main export products from Liberia since the civil war ended. Liberia is still home to over 40% of the remaining Upper-Guinean rainforest (which played a crucial role in rubber production during the early twentieth century). Some of the forests along the Liberian coastline are composed mainly of numerous salt-tolerant mangrove trees. The country earns over $70 million and $100 million annually from rubber and timber exports respectively. The world’s biggest contiguous rubber plantation, which is owned by the Firestone, is in Liberia. The Firestone-Natural Rubber Firm opened the plantation in 1926 after they leased over a million acres from the government of Liberia and planted Hevea brasiliensis. The first 100% locally owned rubber processing firm was opened in 2018 in Blagai, Liberia. The Cooper-Rubber Processing Plant produces rubber gloves, roofing materials, fixture PVC-pipes, and retreaded tires.

Mining and Resources

Mining accounted for 25% of the Liberian GDP before the civil war began. The civil war disrupted the mining activities in the country, but the government started reviving this sector as soon as the war ended in 2003. The government introduced a new mining code and mineral development policies, which helped attract foreign investment. Some of the foreign investors who helped revitalize the iron-ore mining in Liberia from 2005 to 2012 include China Union, BHP Billiton, and ArcelorMittal. The mining industry contributed about 11% of the country’s GDP in 2013. Some of the core minerals found in Liberia includes iron, diamonds, cement, petroleum, and gold. The diamonds extracted in Liberia were officially 155,000 carats in 2001, but the amount smuggled to Ivory Coast and Sierra Leone was of better quality. Other significant minerals in Liberia include zinc, uranium, tin, nickel, lead, copper, chromite, bauxite, and beach sand that rich in monazite, ilmenite, and zircon.

The country also started offshore oil exploration in 2004 when they auctioned exploration licenses to various companies including Woodside Petroleum, Anadarko, Chevron, and Repsol. The unproven Liberian oil reserves are believed to be over a billion barrels. Iron ore extraction has been revived in the private sector by various companies, including Western Cluster Iron-ore project and Putu iron-ore project. Gold and diamond mines have been active in the country since 2010 with Gbarpolu County being the most fertile place in Liberia for gold mining.

Shipping Flag of Convenience

The FOC (Flag of Convenience) is a unique business which involves a shipowner registering a ship in the registry of a different nation other than his/her own. These ships fly the flag of that country, and they are subjected to that country’s shipping laws. Due to its status as a FOC, Liberia holds an open maritime registry and many vessel owners can register their ships in Liberia with few restrictions. Liberia has the world’s second-biggest maritime registry right after Panama. Over 4,300 vessels fly the Liberian flag which accounts for about 12% of the vessels on the planet, including 35% of the tanker fleet. The Liberian government earned about $18 million from this program in 2000.

Energy

The Liberia-Electricity Corporation (LEC) is the leading provider of formal electricity services in the country. The LEC is a state-owned firm which operates a small power grid in the Greater Monrovia District. Numerous privately-owned generators provide a huge percentage of the electric energy services in Liberia. Liberia has one of the world’s highest electricity tariffs at $0.54 per kilowatt hour. The total installed capacity of Liberia was 20MW in 2013, which was a decline from 191MW in 1989. The sharp decline was due to the destruction of the Mount Coffee Hydropower plant during the civil war that had a capacity of about 80MW. The plant is being repaired their first hydropower-turbine and generation unit was commissioned in 2016. Once the Mount Coffee Hydropower plant is fully upgraded it will have a capacity of about 88MW. The country started importing electricity from Guinea and Ivory Coast via the West-African Power Pool in 2013.

Communications

The communications industry in the country includes mobile and fixed telephones, television, radio, internet, and the press. The civil war destroyed a considerable percentage of the communications infrastructure in Liberia. Radio has become the leading means of communication in the country due to the high poverty rate and low adult literacy rate. Even though the country is struggling economically, its media sector is expanding at a very high rate. Despite the limited market, the number of registered radio stations and newspapers is on the rise. There are six leading newspapers and over 20 defunct magazines and newspapers in Liberia. More than 45% of Liberians have mobile phones. There are over 70 radio stations in the country with Montserrado having 30 radio stations. Over 3.8% of the population could access internet services by 2012 in Liberia with the country having 7 internet hosting companies.

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