Outlook for 2011-12

Support for the president, Ellen Johnson-Sirleaf, and the ruling Unity Party (UP) has dissipated over corruption scandals and a perceived failure to deliver tangible improvements in living standards. A cabinet reshuffle in November was an attempt to put a fresh face on a weary administration. However, unless the opposition parties maintain one of the newly formed cross-party alliances and rally behind a single presidential candidate, the UP and Mrs Johnson-Sirleaf are likely to prevail in elections in October 2011. The Economist Intelligence Unit forecasts real GDP growth of 7.3% in 2011, rising to 8% in 2012 as investment in the mining sector increases. Liberia will continue to run a large structural current-account deficit because of the heavy UN presence, which accounts for the majority of imports.

The political scene

Although the president emphasised the need for a clean slate in a November cabinet reshuffle, many officials retained their existing jobs or were simply reshuffled to other ministries. The president used her annual message to the legislature as an opportunity to set out the key aspects of her forthcoming election campaign and highlight the achievements of her UP-led government. The National Electoral Commission has begun preparations for a referendum on August 23rd to amend four election-related aspects of the Constitution. Villages in the north-east of the country are struggling to cope with the influx of an estimated 40,000 refugees fleeing unrest in Côte d'Ivoire.

Economic policy

The IMF has concluded its fifth review of the country's economic performance as part of the extended credit facility, enabling the disbursement of US$6.8m. The government's prudent macroeconomic policies, balanced budget and continued efforts to promote structural reforms were all praised by the Fund, as was the reaching of completion point under the heavily indebted poor countries initiative. A more downbeat assessment was delivered in the latest report by the UN Panel of Experts on Liberia, which suggested that although progress has been made in improving the regulatory environment governing natural resources, implementation constraints still hinder its operation.

The domestic economy

A Russian-owned mining company, Severstal Liberia Iron Ore, has more than doubled its estimate of iron ore at its Putu mine to 2.37bn tonnes.

Foreign trade and payments

The government has concluded a US$78m deal with the Cavalla Rubber Corporation relating to the rehabilitation and redevelopment of a rubber plantation in Maryland county in south-eastern Liberia.