In Summary:
• In President Joseph N. Boakai’s second State of the Nations Address (SONA), he reported on the state of the economy and made many claims about economic growth, inflation, current account deficit, Gross International Reserves on months on imports and Public Debts.
• We have verified the numbers in the President report by reviewing all relevant data
On January 27, President Joseph Boakai delivered his second State of the Nation Address (SONA) to the joint session of the legislature in fulfillment of Article 58 of the Liberian Constitution. During his presentation, the President made several claims about the economy some of which we verified in this report.
Claim #1
“Before our administration, growth had slowed to just 4.6 percent, while inflation surged to double digits at 10.1 percent, driven largely by rising food and fuel prices.”
Rating Justification
To verify this claim, we reviewed the Central Bank of Liberia 2023 Annual Report which is published on the Bank’s website.
The report shows that growth in the economy moderated slightly to 4.6% in 2023 from 4.8% in 2022. Also, the report shows that inflation in 2023 increased to 10.1% from 7.6% in 2022.
Also, the Annual Fiscal Outturn Report for 2023 published by the Ministry of Finance and Development Planning shows that the Liberian economy grew by 4.6% in 2023 – a slight decline compared to 4.8% in 2022. The report also mentioned that inflation in 2023 rose to 10.6% from 7.6% in 2022.
Conclusion
Based on these facts, we conclude that President Boakai is correct that before his administration took over, growth in the Liberian economy slowed to 4.6% while inflation increased to 10.1%.
Reports from the CBL and MFDP show that growth declined in 2023 to 4.6% and inflation in the same year increased to 10%.
Claim #2
Said Pres. Boakai: “The current account deficit (at the time), had worsened to 26.4 percent of GDP”
According to the World Bank Glossary Current account balance is the sum of net exports of goods and services, net primary income, and net secondary income.
According to the IMF Finance and Development Magazine “A current account can be expressed as the difference between national savings and investment, and a current account deficit may therefore reflect a low level of national savings relative to investment or a high rate of investment—or both.
Rating Justification
To fact-check this claim we again reviewed the CBL 2023 report. Data on page 30 show that Liberia’s current account deficit at the end of 2023 widened by 38.9%.
However, the report did show the percentage of the current account deficit to GDP.
Meanwhile, the 2023 Annual Fiscal Outturn Report by the Ministry of Finance reveals that the current account deficit as a percentage of the GDP was 26.5% in 2023.
Also, the World Bank, in its Economic Update on Liberia, shows that the current account deficit in 2023 was 26.4%, something the bank states was caused by the “widening gap” between savings and investment in Liberia during year 2023.
Conclusion
Based on this, we conclude that President Boakai is correct that the current account deficit in 2023 was at 26.4%. Data from the World Bank and the Ministry of Finance shows that this statement is correct.
Claim #3
President Boakai also claimed that international reserves were low at just 2.1 months of import.
He said: “International reserves were dangerously low at just 2.1 months of import cover”.
International reserves in months of imports cover refers to the number of months of import of goods and services a country reserve could pay for. ECOWAS member countries has a threshold that is set at 3 months of imports of international reserve.
Rating Justification
The International Monetary Fund and the World Bank Joint Debt Sustainability Analysis published in 2024 states that the reserve coverage declined to 2.1 months of imports at the end of 2021.
However, the CBL 2023 Annual Report states that Gross International Reserves in months of import cover decreased to 2.3 months in 2023 from the 3.5 months reported in 2022.
Conclusion
Based on the evidence, we conclude that President Boakai is mostly correct that the Gross International Reserves in months of import cover declined in 2023. However, the CBL 2023 reports put it at 2.3 months while the joint IMF and World Bank report put it at 2.1 months of import.
Claim #4
On the Country’s debt portfolio, President Boakai claimed that the country’s “debt burden ballooned to $2.5 billion” in 2023.
Rating Justification
To fact-check this claim we reviewed the Annual Fiscal Outturn Report published by the Ministry of Finance and Development Planning in April 2024.
The report shows that the total public debt as of December 31, 2023, amounted to US$ 2.337 billion.
Also, the CBL 2023 Annual Report states that total public debt increased by 9.5% to reach US$ 2.209 billion in 2023.
Data from the joint IMF and World Bank debt sustainability analysis published in September 2024 states that total public debt reached US$ 2.582 billion or 58.8% of GDP in 2023 up from US$1.86 billion or 53.3% of GDP in 2022.
Conclusion
Based on this we conclude that President Boakai is mostly correct based on the data from the IMF and the World Bank. However, data from the Central Bank of Liberia shows different numbers FOR Liberia’s total public debt stock for 2023.
