Africa-Press – Liberia. As Liberia strives to rebuild its economy in the aftermath of years of conflict and external shocks, experts warn that the nation’s heavy reliance on foreign direct investment (FDI) is undermining long-term sustainable growth.
Bonokai G. B. Gould, a lecturer at the University of Liberia, has issued a strong call for a decisive policy shift towards promoting Domestic Direct Investment (DDI), emphasizing its critical role in creating jobs, retaining wealth, and strengthening Liberia’s economic sovereignty.
In a comprehensive study titled “Promoting Domestic Direct Investment (DDI) for Sustainable Economic Growth in Liberia,” Gould presents a compelling case for why boosting local investment should become a top national priority.
His analysis reveals that although FDI contributes to gross domestic product (GDP) growth, DDI generates far more substantial benefits for the Liberian economy—especially in tax revenue collection, wealth retention within the country, economic resilience, and government policy autonomy.
“Liberia’s economy today is overly dependent on foreign capital and imports,” Gould said in an interview. “While FDI can provide an important capital injection, it often results in profits being sent abroad and offers limited employment opportunities for Liberians. To build a resilient and equitable economy, we must empower our own people to invest, produce, and grow.”
Gould’s research traces Liberia’s economic history, highlighting a once-thriving domestic industrial sector before the 1970s. “Before the civil wars, Liberia had a vibrant agro-processing, fisheries, and manufacturing base—particularly in poultry, palm oil, and garments,” he explained. “But decades of conflict decimated infrastructure and disempowered local entrepreneurs. Since then, our economy has shifted heavily towards foreign investors and imports, stifling domestic capital formation and sustainable employment.”
The study employs a simulated impact analysis comparing the effects of a hypothetical $100 million investment injected as either FDI or DDI. The findings reveal that domestic investment outperforms foreign investment in key economic indicators such as tax revenue generation, national spending, national debt reduction, wealth retention, and policy control.
“These results make a clear argument for policy reform,” Gould stated. “If Liberia wants to recover economically and reclaim its economic sovereignty, it must create an enabling environment for domestic investors.”
To that end, Gould offers several actionable recommendations for government policymakers. He advocates improving access to affordable finance by establishing concessional loan schemes, credit guarantees, and partial risk guarantees through government-backed banks or partnerships with development agencies. Strengthening local financial institutions is essential, with public capital channeled into credit unions and local banks to expand lending to micro, small, and medium enterprises (MSMEs).
Gould also calls for regulatory incentives, including tax holidays, reduced tariffs on capital inputs, and streamlined business registration processes specifically for domestic investors.
Furthermore, he stresses the importance of investing in infrastructure by upgrading roads, electricity supply, and digital connectivity in economic corridors to lower the cost of doing business for Liberian entrepreneurs.
Finally, he urges the adoption of industrial protection policies, such as enforcing local content requirements, import substitution incentives, and procurement preferences that favor Liberian-owned enterprises.
“Creating a robust domestic investment ecosystem will not only generate jobs and wealth locally but also enhance fiscal policy autonomy,” Gould said. “Foreign investment often limits government control because profits are repatriated, and capital flows can be volatile. Domestic investment strengthens resilience against external shocks.”
He emphasized that the shift towards DDI is also a social imperative. “When Liberians own and manage productive enterprises, it builds national pride and confidence. It ensures that the benefits of growth reach ordinary citizens, not just foreign shareholders.”
Economic analysts agree that Liberia stands at a crucial crossroads. While foreign investment remains important for capital inflows and technological transfer, the government must urgently rebalance its economic development strategy to prioritize domestic investors if sustainable and inclusive growth is to be realized.
As Liberia moves forward, Gould’s research offers a hopeful yet urgent blueprint. “With the right policies, access to finance, and infrastructure support, Liberians can reclaim their economy,” he said. “It’s time to invest in ourselves.”
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