The economy of Liberia which was shattered to a large extent during the Civil War (1989-96), was mainly based on extensive production of rubber and iron ore mining. In fact, the Liberian capital of Monrovia was the worst affected region, where the economic infrastructures were severely affected following the Civil War.
It was during this period that most proficient and rich businessmen left the country, adding further to the economic devastation.Till 1950, the economy of Liberia was entirely dependent on agricultural activities, with special focus on the production of rubber.
Though the agricultural sector specialized in the farming of different food crops the introduction of fish farms brought in considerable diversification to this sector. The contribution of this sector to GDP is 50%.Production and processing of various types of minerals is one of the principal industries in Liberia.
The discovery of iron ore in the country has made mining one of the primary occupations of a part of the Liberian population. Apart from iron ore, other minerals and metals like diamonds, kyanite, gold and barite are also mined here.
Processing of rubber and foodstuffs and manufacture of building and construction materials also form integral parts of Liberian industrial activities, accounting for about 15% of the GDP.
The Liberian service sector contributed around 35% to the GDP in 1999.
The Liberian economy relies heavily on its international trade. Iron ore holds the Liberian export market primarily, accounting for almost half of the export incomes in Liberia alone. Annual incomes of another $100 million and $70 million come from the export of timber and rubber respectively. Gold and alluvial diamond also account for some more foreign earnings. Machinery, types of transportation tools, chemicals, fuels, finished industrial products and foodstuffs are the major Liberian imports, accounting for $142 million in 1998.
Following the Civil War, the devastating Liberia economy incurred huge foreign debts worth $3 billion. So, the nation has to depend on United Kingdom, United States, Japan, China and other countries for financial aids. About 80% of the Liberian population lives below poverty line. The rate of unemployment in Liberia was 85% in 2003.
Last Updated on : 25th June 2013