The Ministry of Finance and Development Planning (MFDP) of Liberia has unveiled the approved national budget of US$851.8 million for Fiscal Year 2025, representing a significant increase from previous years but still falling short of the country's ambitious funding requests5. This budget, covering the period from January 1 to December 31, 2025, prioritizes key sectors such as infrastructure development, education, healthcare, and agriculture. Despite the increase, the MFDP has issued a stern directive to all government spending entities, urging them to exercise fiscal discipline and adhere strictly to their approved budgets8. This call for prudence comes in the face of fiscal constraints and highlights the government's commitment to responsible financial management.
The FY2025 budget marks a shift towards more community-driven development planning. Deputy Finance Minister Bill McGill Jones emphasized that the budget will be shaped by insights gathered from ongoing consultations regarding the National Development Plans (NDPs)2. This approach aims to ensure that the budget reflects the needs and priorities of all 73 electoral districts, over 100 administrative districts, and 15 counties2.
A key focus of the 2025 budget is the re-introduction of the Medium-Term Expenditure Framework (MTEF). The MFDP plans to work with budget and planning technicians from various spending entities to review and update the MTEF Planning and Budgeting manual, develop capacities, and establish expenditure baselines1. This initiative aims to improve long-term fiscal planning and accountability.
The budget also introduces several policy measures aimed at increasing revenue and improving fiscal management. These include amendments to the Liberia Revenue Code, such as an increase in the GST rate to 11 percent and the imposition of an airport departure tax of US$25 per departing passenger1.
However, the government faces significant challenges in meeting its funding needs. While the budget has increased, it remains far below the upwards of US$2 billion in funding requests for 2025 that the MFDP received7. This underscores the scarcity of resources and the need for careful prioritization of expenditures.
The MFDP has emphasized that the budget is a projection reliant on revenue generation efforts, particularly by institutions like the Liberia Revenue Authority. Spending entities have been cautioned against exhausting their budgets prematurely, as the US$3.26 million contingency reserve is insufficient to address unforeseen demands8.
To address emerging needs, entities have been advised to reprioritize within their existing budgets. This reflects a shift toward internal financial accountability and efficient resource allocation8. The government is clearly striving to instill a culture of financial prudence while managing competing development priorities.
The 2025 budget also incorporates elements of gender-responsive budgeting, climate change adaptation, and performance management systems1. These initiatives demonstrate Liberia's commitment to addressing cross-cutting issues and improving overall governance.
As Liberia moves forward with its 2025 budget, the country faces the challenge of balancing ambitious development goals with fiscal realities. The government's emphasis on community input, fiscal discipline, and strategic prioritization reflects a concerted effort to navigate these challenges and drive sustainable economic growth.
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References
https://senatoramarakonneh.gov.lr/wp-content/uploads/2024/03/BudgetBook2024-DRAFT.pdf
https://verityonlinenews.com/mfdp-unveils-us851-8-million-draft-national-budget-for-fy2025/Liberia's 2025 Budget: Balancing Ambition with Fiscal Restraint
https://www.sipri.org/sites/default/files/2023-06/20220000_mof-lib_national_budget_2022_a.pdfLiberia's 2025 Budget: Balancing Ambition with Fiscal RestraintLiberia's 2025 Budget: Balancing Ambition with Fiscal Restraint
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