By Ansu O. Dualu,
An alignment of public policy with private-sector innovation is the point at which a poor country can leapfrog its development agenda. There is a prevailing argument that for the private sector to take hold in a country like Liberia, a proactive, sequenced strategy must be balanced against a highly evolved legal system, critical infrastructure, and a well-developed regulatory framework. This position holds water on many fronts; however, such restrictions could also hold back innovation and advancement in the private sector if the system must wait for total alignment before private-sector investments are made.
Here’s an alternative argument: the public sector cannot quickly establish the “bedrock” environment because it locks in innovation and ingenuity, which the private sector is known for! It is important to note that the argument is not against a proactive strategy for a regulatory foundation that ensures property rights and contracts or a governing platform that supports strong public institutions; rather, it presupposes that one does not necessarily have to wait for the other to be fully developed – both public governance and private sector expansion can begin the journey together and strengthen over time.
This position is practical. Countries with weak institutions will struggle to develop if they must wait to have the same regulatory institutions as those that are developed. Not a single developed country waited to have all its ducks in a row before taking the plunge. The government can build critical institutions while simultaneously funding private sector growth – funding is temporary; as the sector grows and becomes more independent, it will finance itself.
Capital dynamism is the way to go – invest our national income not only to build general infrastructure and to pay civil servants’ salaries, but also to see private-sector expansion as government responsibility, at least in the initial stages! Our push for development must employ a robust approach that forces growth and modernization, with a strategic position that enhances the economic environment, promotes commerce, and expands our tax base. What has stopped the Liberian Government from allocating a dedicated fund in every budget for private-sector operational improvements and advancements?
Liberia must merge its state-led model with a market-oriented approach, adopting financial expansion reforms that have accelerated growth in places like China, Vietnam, and much of Southeast Asia. Relying almost exclusively on the government for structural reforms is a failed model. Liberia must get out of this self-destructive comfort zone and meet the world where it works: technological advancements driven by private-sector innovation, a competitive environment heavily subsidized by national capital infusions, and targeted trade that is designed to increase productivity and access to capital!
Building a private sector in a poor country requires more than just creating an enabling environment that relies on the typical institutional framework experts often speak of, such as well-developed infrastructure, regulatory reforms, legal protections, property rights, and contracts, etc. This new global dispensation calls for governments to think differently. How can a poor country fully develop these platforms without a growing tax base supported by private enterprise?
The connection between institutional and social governance is often minimized when structural reforms are spoken about. To solidify government austerity measures and fully align the public agenda with business productivity, the psychology of locals should be a variable in any calculus that determines a growth strategy. Secondly, what are the incentives for investors to align their interests with the government’s growth strategy? Can a society develop if the people are not adequately prepared for change? Better yet, how does one reorient people’s minds toward a future that requires a new way of thinking? The private sector is the incubator for all of this.
Continuous communication between sectors must be maintained to identify bottlenecks and smooth out the rough edges that impede growth – a fusion of the public and private sectors must always exist, where one relies on the other to produce at its optimum point. Like the government, “the private sector is an indispensable force for sustainable development.” In essence, for one sector to thrive, it must be heavily supported by the other; a sector cannot work alone and be efficient or last in a meaningful way. The argument here is simple: the system must be built jointly from the start with interlocking redundancies that guarantee success over the long haul.
Economic transformation is a long-term game; a well-planned strategy will be short-lived if the fuel that keeps this engine honing is entirely dependent on a finite natural resource revenue that is limited in scope. The structures of our economy cannot be heavily reliant on a dwindling tax base of natural resources; they must also combine market-based, sustainable industries by promoting private sector ingenuity, agriculture, services, manufacturing, etc. In the short term, the government must serve as the primary financier because it will be the biggest beneficiary in the long term. Additionally, the private sector, when adequately nurtured, will become a permanent lifeline with unlimited capital for public programs.
The private sector typically drives transformation that expands government operations. For the government to achieve structural growth and avoid cyclical fluctuations associated with reliance on natural-resource income, it must fundamentally shift the economy into high gear by being innovative and taking calculated risks. Technological innovation, a cornerstone of private enterprise, can drive the changes the government needs to fast-track its development agenda. Furthermore, public policy designed to harness the private sector’s powers yields higher productivity, faster industrialization, greater employment opportunities, and a competitive, efficient system that benefits all involved.
If Liberia is to achieve higher production and economic efficiency, a structural shift centered on private enterprise must be the go-to move. This shift cannot be engineered from the periphery; it must be the centerpiece from which the government draws public policies. Yes, you heard that right: the government must draw from the private sector to design public policy. The system must grow around the engine that drives it.
A competitive business environment that will be attractive to potential investors must have strong government backing but also be viewed as a sector that operates independently and without public interference – the free market must be totally free! Growth must happen unhindered.
For the government to function more efficiently, there must be external factors that support the critical infrastructure that drives the economy. Weak institutions will remain weak if the lack of finance persists, and if the powerful mechanisms of government do not move to shift the economy into high gear with a growth strategy that is championed by private sector innovation.
On the other hand, Liberia must see the diaspora as an extension of its reach; the system must be designed to strategically take advantage of the economic position of its citizens abroad – treat the diaspora as a potential multiplier with vast financial capabilities that the government could utilize.
The government should quickly align with entities such as the Liberian Diaspora Equity Fund (L-DEF), a diaspora-based venture capital fund, to rapidly expand private industry. This fund aims to raise $25M and invest in manufacturing, start-ups, fintech, etc., to give Liberians access to capital and control over their economy. These kinds of collaborations will help simplify business rules, rapidly grow entrepreneurship across the country, and create high-growth areas that could drive transformation.
A growing private sector can help fight against institutional lapses, create jobs and lessen the burden of unemployment on the state, make the environment more attractive, and give the government the capital needed to build infrastructure and institutions to strengthen its regulatory oversight. Our focus should now shift from natural resource extraction and exportation to the cultivation of the mind to “mine” true wealth.
Nearly every country that has developed did not start with structured institutions in every area it administered; adequate government regulations were developed over time. Secondly, Liberia does have a fairly developed legal system and a market-standard regulatory framework – Liberia’s current legal system, in terms of design, is on par with most organized countries – our problem is a total refusal to follow established structural designs and legal processes due to corruption, patronage, “brotherhood”, etc. This has always been our Achilles heel; change this and see a drastic transformation in the Liberian economy!
Our focus now should be on simplifying business rules to drive transformation, investing in specialization/education that positions the private sector to win, and adopting a grounded strategy that constantly improves efficiency. If we are going to become a middle-income country over the next twenty years, our leaders must invest heavily in startups and small businesses, promote ingenuity in entrepreneurship, and make government-financed fintech the new model.
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References:
Martin, L. & Fu, H. (2025). Harnessing the Private Sector for Better Development Data [Article]. https://blogs.worldbank.org/en/voices/harnessing-the-private-sector-for-better-development-data.
Implementing Private Sector Development (2026). https://www.enterprise-development.org/implementing-psd/.
