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Liberia: Country Experiencing Slow Economic Growth
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The NEWS (Monrovia)
23 July 2008
Posted to the web 23 July 2008
Doe S.k. Davies
Monrovia
The Central Bank of Liberia (CBL) says the Liberian economy was projected to grow by 9.6 percent in 2008 from 9.5 percent in 2007 but following adjustments to growth projections from major contributing sectors, it is expected to grow by about 8.8 percent in 2008.
The bank noted that the decline in growth estimate is on account of slow pace of activities in the mining and forestry sectors, which were expected to propel growth in the economy.
The bank's latest disclosure is contained in its quarterly Financial and Economic bulletin covering the period January-March 2008, released to the media Tuesday in Monrovia.
The bank noted that generally, the performance of the real sector of the economy was quite moderate as the production of some key commodities increased, while others declined.
It said the production of the agriculture sector remained sluggish during the reporting quarter (January-March, 2008), and that despite the inadequacy of public electric generating capacity, performance of the manufacturing sector exhibited improvement, shipping operations increased, indicating a rise in external trade.
"With the hike in global food and oil prices, in addition to other domestic structural factors, the rate of inflation during the quarter grew to 15.2 percent, from 9.9 percent in the preceding quarter," CBL noted.
The CBL further noted that while performance of the agriculture sector was weak during the quarter, the production of rubber increased marginally, and actual activities in the forestry sub-sector are yet to begin in full, owing to ongoing preparations of guidelines to govern the logging industry. However, pit-sawing continues to grow due to the heightened domestic demand for timber and timber related products.
"The fishing sector is plagued with a number of constraints, which brought actual mechanized fishing to a standstill with artisanal fishing being largely the means of domestic fish production," the bank added.
The bank reported that rubber production during the quarter totaled 20.808 metric tons compared to 20.615 metric tons produced in the last quarter of 2007, adding that this marginal increase of 0.9 percent was partly a result of the return of relative stability in the various plantations after a series of strikes by employees of the sector. Production a year earlier exceeded current production by 42.7 percent, the bank noted.
The CBL also reported that cocoa production declined during the quarter from 1,361 metric tons in the previous quarter to 1,284 metric tons during the review quarter, and that a 5.7 percent decline is partly attributed to cross-border trade in which farmers at the borders are engaged due to high prices of agriculture produce in the neighboring countries, especially the Ivory Coast and Guinea. During the quarter, the bank said it did not cord any production of coffee.
"Fishing activities during the quarter was limited to the buying and selling of fish as actual fish catch was suspended due to high operational cost. Fishing enterprises could not engage in fishing activity given the high cost of petroleum products and fishing gear. Fish available on the market is obtained through buying of fish on the high seas and selling it on the Liberian market," the CBL further disclosed.
The bank observed that the industrial sector is plagued with a number of constraints that hamper its rapid growth and development, including the high cost of electricity generation, shortage of skilled manpower, damaged infrastructure and growing cost of imported raw materials.
The CBL also indicated that the production of gold registered an increase of 46.3 percent during the quarter, from 3,624 ounces in the previous quarter to 5,593 ounces. It attributed this favorable trend to increase in international gold price and improved supervision of gold mining activities in the country.
The bank also divulged that the quantity of diamond mined during the quarter totaled 12,315 carats compared to 18,814 carats mined in the fourth quarter of 2007, and noted a decline of 34.5 percent, adding the UN sanction on diamond export from Liberia was lifted in May, 2007 and there is still much to be done to resuscitate the diamond sub-sector.
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"The growing demand for cement, driven by the rising reconstruction activities in the country, stimulated increased production of the commodity. Output for the period rose by 66.1 percent, from 21,876 metric tons during the previous quarter to 36,338 metric tons. Comparatively, production of the review quarter was 15.4 percent more than that of the corresponding quarter of 2007," the CBL added.
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