Governing Liberia’s Electricity Sector Reforms: Challenges and Recommendations

Access to electricity remains a major challenge for Liberia’s economic recovery despite recent efforts by the government to reform the sector. This paper assesses the post-war reforms of the electricity sector relative to their outcomes – accessibility, affordability and the quality of electric power. The paper also evaluates Liberia’s electricity sector reform by comparing it to reform in Cote d’Ivoire. The paper argues that existing reforms do not adequately address the underlying challenges facing the electricity sector. Both productive and allocative efficiencies remain low amidst excessive government influence, and investment in infrastructure is grossly inadequate compared to regional benchmarks. Presently, electricity is one of the major, if not the single largest, cost for businesses in Liberia, and less than one per cent of households are connected to the public grid. This paper offers some policy recommendations to improve efficiencies in the sector. First, that the electricity sector be restructured; the Liberia Electricity Corporation (LEC) should be reorganised as an independent economic regulator, while the Ministry of Lands, Mines and Energy (MLME) should perform the legal and social regulatory function. Second, the sector should be unbundled into power generation, transmission and distribution, and each component privatised through competition for the market. Third, that as an independent economic regulator, the LEC should adopt cost-of-service regulation to encourage long-term and sustained investment in power generation and transmission, thereby improving access to electricity.